Filed under: Taxes, Income Tax, Tax Changes, Tax Credits, Tax Deductions, State Income Tax
Governments on the federal, state, and local levels are all scrambling to collect cash … from you, dear taxpayer.
It’s getting a lot harder to stay current with all the tax-law changes and to keep your tax bill under control. It’s all about identifying favorable provisions and steering clear of traps for the unwary. Follow these five rules and you can minimize the pain.
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Filed under: Taxes, Tax Changes, Tax Cuts, State Income Tax, Tax Laws
As you prepare your tax returns for 2012, be warned: A number of states have made or are considering big changes to their state income taxes. With some of those changes already having taken effect, you need to know whether you’re in the line of fire — or in line for a tax break.
1. California
Last November, California voters approved Proposition 30, a measure that imposes two separate tax increases. A quarter-percentage-point increase in the sales tax will affect everyone who shops within the state, but the measure also included an income-tax increase for single filers earning more than $250,000 and joint filers with $500,000 or more in income. Proposition 30 will add 1 to 3 percentage points to the existing top tax bracket through 2018, sending the maximum tax rate up to 12.3 percent. And the tax hike was retroactive, so filers will have to pay higher income taxes on the returns they’re filing now.
2. Kansas
Gov. Sam Brownback hasn’t made a secret of the fact that he doesn’t like the state’s income tax. Last year, Kansas passed a law that took effect this year, reducing the top tax bracket from 6.45 percent to 4.9 percent. It also eliminated income taxes on small business income for hundreds of thousands of businesses. Now, Gov. Brownback is looking to send rates down even further, with the eventual goal of getting rid of income taxes entirely.
3. Louisiana
Gov. Bobby Jindal recently proposed a tax swap, offering to get rid of the state’s income and corporate taxes in exchange for raising sales taxes. Critics argue that the shift could put too much burden on lower-income residents who can least afford it, but some policymakers argue that sales taxes promote savings and investment over consumption. One benefit from a higher sales tax: Louisiana’s tourism industry would have visitors to the state paying a higher share of the overall burden.
4. Maryland
Last year, the state legislature passed a law raising tax rates on high-income residents. Effective for the 2012 tax year, the new rates apply to single filers making more than $100,000 and joint filers above $150,000 in income. Rates in various brackets rose between one-quarter and three-quarters of a percentage point, with a new top rate of 5.75 percent.
5. Massachusetts
Gov. Deval Patrick has proposed a plan that’s the reverse of the Louisiana plan, offering to swap a one-percentage-point increase in the income tax rate to 6.25 percent, but lower sales taxes from their current 6.25-percent level to 4.5 percent. The move would bring Massachusetts more in line with other states within the region, with the governor saying that the net increase in tax revenue would help boost spending on education.
6. Minnesota
Along the same lines as Massachusetts, Minnesota Gov. Mark …read more
Source: FULL ARTICLE at DailyFinance
Filed under: Taxes, Income Tax, Tax Changes, Tax Deductions
Sure, your Uncle Ed might be happy to prepare your tax return for you, but think twice before accepting his help. The price might be right, but he might cost you more than you know in the long run if he misses tax credits or deductions that you should have taken advantage of.
The tax code is incredibly dense and complicated and changes frequently, so it’s often worth enlisting the help of a skilled pro. Just choose wisely.
Types of Preparers
There are several different kinds of folks who can…
Tax Filing: Tips for Picking the Right Tax Preparer (Hint: It’s Probably Not Uncle Ed) originally appeared on DailyFinance.com on 2013-02-25T05:00:00Z.
By Selena Maranjian, The Motley Fool
Filed under: Taxes, Tax Changes, Tax Laws, Tax Refunds
There are matchmaking websites galore, offering to help you meet Mr. or Ms. Right. So why not a matchmaking site to help you meet the accountant of your dreams?
For all those lonely taxpayers out there, hoping to meet someone they can trust with that shoebox full of receipts and tax forms, Prosado.com is here. It’s a new online service aiming to match taxpayers with tax preparers — because asking your neighbor for a recommendation, or enlisting the services of Uncle Ralph, may not be the…
Matchmaker, Matchmaker, Make Me a Match … With a Good Tax Preparer originally appeared on DailyFinance.com on 2013-02-13T05:00:00Z.
By John Grgurich, The Motley Fool
Filed under: Bonds, Securities, Stock Markets, Tax Changes, Tax Laws
In January, 11 European countries moved significantly closer to implementing a financial transaction tax, known informally as a “Robin Hood” tax, which would be levied on stock, bond, and derivatives trades, with the proceeds potentially used to fight poverty and climate change.
Here in the U.S., the idea of a financial transaction tax has never gotten any real traction in Congress, but that may be about to change.
Sen. Tom Harkin of Iowa and Rep. Peter DeFazio of Oregon are planning to…
Investors, Take Note: The Robin Hood Tax Might Be Coming to America originally appeared on DailyFinance.com on 2013-02-11T11:32:00Z.
By Bruce Watson
Filed under: Income Tax, Tax Changes, Tax Laws, Investing
On Sunday, President Obama took aim at what many believe to be a long overdue target: the carried interest tax rate. Suggesting that “smart spending cuts” could reduce the deficit and make it possible to increase education funding, he proposed a closing more tax loopholes, cutting more government waste, and reforming some too-costly health programs. The centerpiece of his proposal, however, was an end to certain key tax loopholes, notably carried interest — a tax break that almost exclusively…
Carried Interest: Obama Takes Aim at Wall Street’s Second Favorite Tax Loophole originally appeared on DailyFinance.com on 2013-02-05T14:36:00Z.
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Source: FULL ARTICLE at DailyFinance
