No, the headline isn't a joke. It's part of a question considered today by Chuck Klosterman, who writes The Ethicist column for the New York Times Sunday magazine.
Here's the situation:
I am a tax lawyer. Is advising wealthy companies of ways to reduce their tax bills through sophisticated legal structures ethically permissible? The structures take advantage of legal loopholes in the tax
legislation. NAME WITHHELD, NEW YORK
Klosterman replies:
The ethics of specific professions create unique realms of responsibility. In the same way that a defense attorney is ethically obligated to give his client the best possible defense — even if he's convinced of the individual's guilt — your principal responsibilities lie with the company hiring you. You need to do your job to the best of your abilities, within the existing rules. You should, however, voice your moral apprehension about the use of such loopholes to the company you represent.
The key here is, as Klosterman notes, "within the existing rules."
The anonymous tax lawyer says the moves are legal within the current tax laws, so I'm not sure why he (or she, but I'm going to use he for ease of reference) is writing.
But
it often seems that while the people, or companies in this case,
benefiting from loopholes are following the letter of the tax law, they
aren't adhering to the
spirit of the tax law. So tax loopholes, especially if they don't apply to us, have a bad connotation and worse reputation.
The lawyer can, and should, let his U.S. Representative and Senators know of his concerns with tax law loopholes that he finds discomforting.
It sounds like to me, though, that the attorney just doesn't like his job or his clients.
And if that's the case, he should be talking with a career counselor instead of writing an advice columnist.
We may hate our tax code and paying taxes, and we definitely are not very happy with the lawmakers who devise and constantly change our tax system, but U.S. taxpayers are committed to following it.
In fact, the 2012 Taxpayer Attitude Survey notes that we're more adamant than we've been in recent years about following the tax laws.
"The public attitude that it is not at all acceptable to cheat on your income taxes increased between 2011 and 2012 to 87 percent, while tolerance for tax cheating (i.e., a little here and there, or as much as possible) dropped to 11 percent, one of its lowest levels ever recorded in the Board's survey," according to the report.
"Personal integrity is at the core of our
self-assessment tax system," said Board Chairman Paul Cherecwich, Jr. in a statement accompanying the report's release this week. "The overwhelming majority of American taxpayers plays by the rules and
expect everyone else to do the same. They don't tolerate cheating by
taxpayers regardless of income, and 96 percent of those surveyed agreed
that it was every American's civic duty to pay his or her fair share of
taxes."
Thoughts on the IRS: While the IRS is no doubt pleased that most taxpayers take their voluntary compliance with tax laws seriously, the numbers aren't quite as good for the tax agency itself.
Overall, the general public's satisfaction with
interactions with the IRS in 2012 was positive.
Seventy-six percent reported being "very" and "somewhat" satisfied with IRS contacts. That's unchanged from the prior year.
The good news for the IRS is that the percentage of taxpayers who said they were "very satisfied" increased in 2012 to 41 percent, tying the highest level ever recorded in an Oversight
Board survey.
"In
spite of budget cuts that have diminished their ranks, IRS employees
continue to strive to provide quality service to taxpayers, whether
it's answering a taxpayer’s account question or helping taxpayers
navigate a complex tax code," said Cherecwich.
And most of us recognize that money does affect service.
The survey also found that 67 percent of polled taxpayers supported extra funding for the IRS so that it could better assist
taxpayers over the phone and in person. This is the highest level ever
measured since the Board began asking the question in 2004.
Appreciation for all types of help: Taxpayers also expressed recognition of IRS representatives, the IRS website and
paid tax professionals as valuable sources of tax information and
advice.
At least 87 percent of those surveyed said they found those sources of tax help somewhat or very valuable.
But the rating for less official sources wasn't so good. Family and friends who offer tax advice only received a 60 percent or so approval rating.
Sorry Uncle Billy. It looks like you might not be doing as many returns for the clan this year.
Do your views match up with those of the 1,500 adults interviewed last fall by the IRS Oversight Board?
Gérard Depardieu was so great that I made it a point to see every movie he made. Heck, I even dragged the hubby to Green Card.
Crazy fans like me have made the actor a very rich man. So rich, in fact, that he recently decided it was time to leave his native France for a nearby tax haven.
And by nearby, I mean nearby.
Depardieu has settled in Nechin, Belgium, a village just 800 yards from the French border.
The newspaper reports that Depardieu now lives on a street known as Millionaire's Row where many of his neighbors are other wealthy French expatriates. They all left before the country starts collecting in 2013 a 75 percent tax on all earnings of more than one million euros (about £850,000 or $1.3 million).
Depardieu isn't discussing his move but Nechin's mayor is.
"He has moved in already and he is very welcome here," Daniel Senesael, the village's top executive, told The Daily Mail. "He enjoys our countryside and our easygoing, rural way of life. And of course he also enjoys our lower taxes."
Escaping U.S. taxes: Tax expatriation was a hot topic in the United States earlier this year when it was revealed that Facebook co-founder Eduardo Saverin renounced his naturalized U.S. citizenship
and moved to Singapore.
The relocation was estimated to save Saverin $67 million in U.S. taxes on the $4 billion he made off the social media site's initial public offering.
With higher taxes possible if lawmakers can't reach a fiscal cliff solution, there's been speculation that more rich Americans soon could become ex-Americans for tax purposes.
Americans are, as they should be, focusing on the presidential election that's just over two weeks away.
The winner of the White House could determine what income tax rates we'll pay.
But some wealthy Americans who might consider moving based on the Nov. 6 election results also should keep an eye on the electorate in Switzerland.
That Alpine nation, long known as a tax haven for the wealthy from the United States and Europe, might be making tax changes that could lessen its appeal to foreign expatriates.
Passport stamps by hjl via Flickr Creative Commons
Swiss residents who say they've had "enough with tax privileges for millionaires," reportedly have collected the 100,000 signatures required to put a proposal to end some tax breaks to a national vote.
Domestic efforts to limit tax breaks: Last year, the Internal Revenue Service was successful in putting a stop to the hiding of taxable income by thousands of U.S. residents in offshore accounts.
Some members of Congress also have introduced bills, prompted by a Facebook co-founder's move to Singapore, that could cost U.S. citizens if they choose to move to another country in order to pay lower taxes.
None of those measures has so far advanced in the current Congress, which will wrap up its business at the end of the year.
Swiss tax break targets, too: But tax disincentives are now being threatened from Switzerland, a popular destination for many seeking to escape high taxes in their home countries.
At issue in the possible Swiss referendum is a system in which rich expatriates get tax
deals based on the rental value of their property rather than their
actual income or wealth as long as they don't work in the country.
More than 5,000 wealthy foreigners have taken advantage of the system, say the tax break opponents, including Formula One driver Michael Schumacher, pop music star Phil Collins, American songstress Tina Turner and IKEA founder Ingvar
Kamprad.
Despite growing opposition from the Swiss citizenry to tax breaks for foreigners, the Swiss parliament last month rejected a proposal by some of its members to eliminate the favorable tax treatment of its wealthy newer residents.
But the national referendum might just take care of that.
Federal agencies, unlike private companies, are exempt from paying federal income taxes.
But like the private sector, U.S. government agencies still must make employment tax deposits and meet related
tax reporting requirements.
That's not happening in all cases. In fact, it's not happening to the tune of $14 million in unpaid federal agency taxes.
Those millions in tax money that Uncle Sam basically owes himself comes from 70 federal agencies that were responsible for 126 tax accounts that were delinquent at the end of 2011, according to the Treasury Inspector
General for Tax Administration (TIGTA).
It gets worse.
TIGTA, in its report released today, found that 18 federal agencies had not filed or were
delinquent in filing 39 employment tax returns.
"Federal agencies must comply with the same filing and paying standards
that apply to all American taxpayers," said TIGTA's J. Russell George.
IRS' internal collection issues: But the report also puts some of the blame on the Internal Revenue Service.
TIGTA found that the IRS has not fully developed a process to resolve older federal agency delinquent tax accounts. Cases involving 40 delinquent federal tax accounts totaling
approximately $2.6 million were still open after three years.
Employees in the IRS' Federal Agency Delinquency Program also suspended
collection actions for 34 of the 40 aging delinquencies. Those accounts totaled around $2.4 million.
Because the IRS suspended
pursuit of the aged delinquent tax accounts, the possibility that the
federal agencies will voluntarily pay their outstanding
tax liabilities is very low, said TIGTA.
Naming names, or not: If you're wondering which federal agencies are tax scofflaws, get in line. So am I.
The TIGTA report has plenty of lists with lots of uncollected tax dollar amounts.
But the lists are redacted so as not to disclose which agencies owe back taxes and how much each owes.
That means no taxpayer's information, including taxes owed or delinquent,
can be disclosed. And it applies to governments as well as individuals
and corporations.
IRS' response: In a letter included in the TIGTA report, Faris Fink, IRS commissioner of the agency's Small Business/Self-Employed Division, said he agrees with much of the report.
However, Fink also noted that his office, which is responsible for collecting back taxes from federal
agencies, faces "significant obstacles" because "appropriations law and IRS policies make it difficult to collect delinquent taxes form federal agencies."
Congressional interest expected: If Fink's response isn't an invitation or challenge to Congress, I don't know what is.
The House already has weighed in this year on delinquent federal taxpayers.
In August, Representatives passed a bill that makes most people who are
seriously delinquent on their federal taxes -- this typically means folks facing tax liens -- ineligible for federal employment.
The tax payment requirement would apply to both job
applicants and current employees. But it does make some exceptions, such as allowing federal employment of a taxpayer who is making installment
payments on back taxes.
And, not surprisingly, while the bill would apply to Congressional employees, members of the House and Senate are not covered under its tax payment requirements.
While that question isn't particularly elegant either, it's how Republicans wish Mitt Romney had phrased his secretly taped comments at a Florida fundraiser.
Most American are working hard, contributing to their families' support and success. If asked the maker or taker question, they would have said there is no way they are anything like the 47 percent of nontaxpayers whom Romney dismissed as eager dependents on the federal government.
But the truth is that we are all takers in some way, dependent in some fashion on Uncle Sam, especially when it comes to taxes.
And we are all costing our government major dollars.
More about the 47 percenters: American Bridge 21st Century, a left-leaning research and communications group in Washington, D.C., broke out the tax tendencies of the now well-known 47 percent of nontaxpayers.
It found this group of taxpayers used a variety of legal and long-standing tax breaks to help them greatly reduce or zero out their tax bills and, in some cases, get refunds.
Most nontaxpayers, 44 percent, are the elderly who receive Social Security. In most cases, those government checks are tax-free. But the elderly who must file a return also get special tax code consideration, including a larger standard deduction amount and a special tax credit for the elderly.
Next are the 47 percenters who make use of child-related tax provisions. Almost a third of them used these tax breaks to reduce any tax they owed.
Tax breaks for all, at a cost: Those are just a few of the many tax expenditures -- losses to the U.S. Treasury from certain tax deductions, exemptions or credits allowed specific categories of taxpayers -- that benefit not just 47 percent of Americans, but all of us.
Because of them, the U.S. Treasury misses out on big bucks every year.
The hubby and I get health care coverage via his employer as an untaxed workplace benefit. We claim our mortgage interest, although thanks to our recent refinancing the amount we will claim on our 2012 return will be substantially lower. We benefit from the lower tax rates on our investment earnings.
That makes us takers of the top three costliest tax expenditures offered by Uncle Sam. And I guarantee that we're not going to quit taking his largess until we're forced to give it up.
We are not alone.
Keep the government out, except when it helps me: Most people don't think of tax breaks as governmental help.
And most of the tax deductions and such have been in the tax code so long that most taxpayers feel entitled -- yes, that word -- to claim them.
When Romney insinuated in his off the French cuff remarks to wealthy potential campaign contributors that almost half of the country was mooching off them and the rest of us, the candidate was counting on this blurring of definitions.
Political scientists, economists and psychologists back up that point of view.
Mark Schmitt, writing at the Roosevelt Institute blog Next New Deal, notes that most people who benefit from government programs don't see their participation that way.
"In her important recent book, The Submerged State, Suzanne Mettler of Cornell looked at data asking people whether they had ever benefited from a government social program. While most participants in the classic, older transfer programs were aware that they had benefited from programs, most of the newer programs, especially those delivered through the tax code, were invisible to a majority of their beneficiaries. (Even 45 percent of Social Security recipients said they had never used a government program, which may reflect the belief that they are receiving benefits they've paid for.)"
So most of us get some sort of invisible government assistance. We're going to have to admit that dependency before we can have a meaningful discussion on who makes, who takes and how we deal with that as a civilized society.
What tax expenditures, breaks, deductions, income exclusions and the like do you take from the federal government? Do you feel like a moocher?
More importantly, are you willing to give up your tax benefits so that you're no longer dependent on Uncle Sam?
And what benefits are you willing to help fund via your tax dollars -- yes, that other word, redistribute -- so that others who are more dependent can get their lives back on track and start making the country stronger?
Just in case you were otherwise occupied yesterday and missed it, below is the videotape of Republican presidential nominee Mitt Romney writing off 47 percent of the electorate. Those Americans, Romney told a group of potential donors, won't vote for him because they're getting a sweet, nontaxpaying deal under President Obama.
"My job is not to worry about those people," Mitt Romney said
of the 47 percent of Americans who, according to a tax think tank study, did not pay federal income taxes in 2011.
"I'll never convince them they should take personal responsibility and
care for their lives."
"I want to keep my team strong and motivated and I want to get those people in the middle and that's something that fundraising people who are parting with their money are very interested in, knowing can you win or not, and that's what this was addressing," Romney explained in a press conference Monday night.
OK, whatever it takes to get the big checks. I get it. I lived in the D.C. area for almost 20 years, working for part of that time for a guy who faced re-election. And the folks forking over the dollars are big boys and girls. They know they'll be told what they want to hear.
Not the full story: I also understand frustration with folks who don't pull their weight. Nobody likes freeloaders.
Everyone of us has had a
friend or relative who was inordinately dependent on our goodwill until we eventually got tired of it.
But this continual semi-national outrage over a perceived huge, lazy, entitlement seeking, no-tax-paying segment of America is disingenuous.
Romney and those citing the various percentages of nontaxpayers are forgetting some details.
First the key fact. There are indeed a large number of Americans who each year don't pay any federal income tax.
The latest figure is not quite the 47 percent cited by Romney, but instead 46.4 percent
That figure came from a July 2011 study, "Why Some Tax Units Pay No Income Tax," by the Tax Policy Center (TPC), a Washington, D.C.-based partnership of the Urban Institute and the Brookings Institution.
Definition digression: TPC says a tax unit is an individual, or a married couple who file a tax return jointly, along with all dependents of that individual or married couple.
But Romney and others stopped at that 46-to-47 percent amount.
Plenty of other taxes: They conveniently ignore that while these folks might not pay federal income taxes, many of them did pay other taxes, most notably payroll taxes.
More than 28 percent of those who didn't pay income taxes still handed over money to Uncle Sam via payroll taxes, the paycheck withholding amounts that fund Social Security and Medicare.
As the payroll tax's name indicates, these folks were on a payroll, working, not sitting at home with a beer in one hand and in their other the remote to the big-screen HD TVs that they bought with welfare checks.
The jobs they had, however, didn't pay enough for them to owe, after they claimed their deductions and any tax breaks for which they qualified, any federal income taxes.
No taxes at all: That then leaves just slightly more than 17 percent of Americans (or tax units in the TPC vernacular) in 2011 who escaped both federal income and payroll taxes.
Who are these people who, in Romney's words, "are dependent upon government … [and] believe they are victims?"
They primarily are elderly people living on Social Security, a system they had to pay into in order to receive benefits, and younger individuals who are making less than $20,000 a year.
And, oh yeah, less than 1 percent of no-tax-at-all group falls into
the "other" category. Some of those nonpayers are likely at the other end of the income spectrum.
You and Romney can well be dismissive of the tax code which sets up these legitimate nonpaying situations. But don't just summarily dismiss those who don't pay income taxes. Many of those in the 47 percent are taking full advantage of the tax laws to lower or zero out their federal tax bills, just like Romney does.
Location, location, location: Finally, it's interesting to look at where all these nontaxpaying folks live.
While Romney says he can't count on the 47 percent who aren't paying federal income taxes, he might want to fact check himself.
If you (or the Romney campaign) check every pollster's presidential election map, you'll find most of those states are solidly Republican when it comes to picking a president.
We Americans aren't the only ones watching opposing political parties duke it out over the tax burdens and responsibilities of wealthier citizens.
In Great Britain, liberal and conservative politicians are having the same fight.
The latest across the pond tax volley was fired by Deputy Prime Minster Nick Clegg, leader of the Liberal-Democrat Party,
who has proposed a one-time emergency tax on the wealth, rather than the incomes, of
rich Britons.
George Osborne, Chancellor of the Exchequer (roughly the United Kingdom's Treasury Department Secretary; that's him pictured there to the right), quickly torpedoed the idea, saying such a tax would cause Britain's wealthy residents to leave the country and make economic recovery
even worse.
Or, as the chair of the House of Commons' public
administration committee so colorfully characterized it, a wealth tax even on a short-term basis could strangle the golden geese of Britain.
Sounds like the same arguments we've been hearing in the United States ever since the Bush tax cuts' original 2010 expiration date passed.
Legal, but 'morally repugnant:' But while Osborne doesn't want to add a new tax on wealthy Britons, he is not pleased that so many of them take advantage of the U.K. tax code to dramatically lower their tax bills.
In many cases, according to data from Her Majesty's Revenue and Customs (England's Internal Revenue Service), these rich individuals reduced their income tax rate to an average of 10 percent, less than half the level paid by the average Briton.
Sounds very much like tax inequity complaints made in the United States and the ensuing discussions now underway on Capitol Hill and campaign headquarters on ways to revise our tax code, doesn't it?
In his budget speech, Osborne lashed out at such tax techniques:
Most wealthy people pay their taxes, and without them we could not begin to afford the public services on which the country depends. But under the last Government, it was the boast of some high earners that, with the help of their accountants, they were paying less in tax than their cleaners. I regard tax evasion and indeed aggressive tax avoidance as morally repugnant.
In this regard, it looks like Osborne at least has the hearts of most of his countrymen and women when it comes to enforcing taxes.
A recent survey by Christian Aid, a London-based church network that focuses on anti-poverty efforts, found that 56 percent of British adults believe that tax avoidance by multinational companies, while a technically legal way of reducing what they owe the taxman, is morally wrong.
That percentage also is this week's By the Numbers figure.
And almost as many (74 percent) of those polled by Christian Aid said U.K. Prime Minister David Cameron should be
demanding international action to tackle tax evasion and avoidance.
But most poll respondents don't believe that
Osborne's strong denunciation of legal tax avoidance strategies will
lead to concrete tax changes.
Only 38 percent of the Christian Aid survey takers believe their government
is sincere in its avowed desire to combat the loss of tax money via legal loopholes.
Hmmm. So Brits join us Yanks in thinking that our politicians and elected leaders often say things they don't actually intend to do.
I also find it very interesting that the country America fought for independence from in large part because of taxes is, some 236 years later, internally waging so many of the same tax battles that we've having here on this side of the Atlantic.
Maybe George Bernard Shaw's oft-quoted phrase should be revised to say England and Americas are two countries separated by a common language, but still united in their continuing tax travails.
Great Britain is trying a new tax collection technique: Shame.
Her Majesty's Revenue and Customs (HMRC), the United Kingdom's equivalent of the Internal Revenue Service, wants to embarrass folks who are utilizing (or utilising if you use England's spelling) very aggressive tax shelters into paying more.
The idea was sparked by revelations that many of wealthy U.K. residents are using tax loopholes to legally avoid paying HMRC. One estimate is that the country has missed out on up to 14 percent -- or around £5 billion; that's more than $7.7 billion in U.S. currency -- in uncollected taxes.
Image courtesy TaxBrackets.org
"At a time of economic difficulty, when tough decisions have to be made on public spending and when the burden of taxation remains high, there is little sympathy for those who do not make their full contribution," said Exchequer Secretary David Gauke, the U.K.'s counterpart to U.S. Treasury Secretary Timothy Geithner. "For those who work hard and pay their taxes, it is galling to see others shirk their responsibilities on either front."
Types of tax shelters: The tax-saving plans that will be targeted under the name-and-shame plan are complicated, aggressive and used by celebrities -- the admission of popular U.K. comedian Jimmie Carr that he put his money into a New Jersey (yes, the Garden State; we are offshore for the rest of the world) tax shelter known as K2 prompted this tax brouhaha -- and yes, even some government leaders.
K2 is a legal tax maneuver that allows its members to as little as 1 percent annually in income tax by channeling earnings into a company that gives the taxpayer so-called loans that are not subject to tax. Carr has since taken his money out of the shelter.
Under HMRC's proposed plan to counter K2 and other questionable tax shelters, U.K. promoters of such tax avoidance schemes will be required to hand over their customer databases to government inspectors.
That information then will be used to formally warn clients about the possible taxes they will owe if the tax plans fail.
Similar to IRS effort: So the U.K. is going to get the names of citizens who aren't breaking any tax law from their previously confidential tax advisers and alert said tax-saving citizens of the moral ambiguity of not paying more taxes.
I'm not sure that will work, but it does sound vaguely familiar.
The IRS has been going after American taxpayers' offshore holdings for years, specifically targeting the Swiss banking system and currently offering a third foreign account tax amnesty, or as the agency prefers tot call it, offshore voluntary disclosure program.
In the American case, such reporting of foreign accounts already is required. If account owners don't comply, they face heavy financial penalties and possible criminal prosecution.
So far, IRS the efforts have brought Uncle Sam an additional $5 billion in taxes and penalties on previously hidden offshore cash.
Will a somewhat similar tracking counterpart of foreign accounts work across the pond? Some think it will.
"The best way of conducting tax policy is that individuals should feel a sense of compunction about paying a fair share," said The Times of London in a recent editorial supporting the name-and-shame tax collection approach. "The beneficiaries of avoidance know that a tax bill of lower than 10 per cent of income is cheating, even though it may be perfectly legal."
The newspaper's attitude won't set so well here in America, where even the IRS tells us taxpayers that we should take every legal tax break for which we're eligible.
That's why the IRS had to offer the carrot of no criminal charges for not paying previously due taxes to get amnesty participants.
But maybe given the generally more proper national British persona, the name-and-shame's appeal to better national tax-paying interests will help HMRC boost its collections.
The Moving Ahead for Progress in the 21st Century Act, or MAP-21 and also known as the Highway Investment, Job Creation, And Economic Growth Act Of 2012 (see my earlier rant about Congressional naming conventions for bills), is now awaiting Obama's signature.
The definition of tobacco manufacturers now includes businesses operating roll-your-own cigarette machines, raising $94 million over 10 years from the now applicable federal cigarette tax, according to the revenue estimates from the Joint Committee on Taxation.
SEC. 100122. ROLL-YOUR-OWN CIGARETTE MACHINES. (a) IN GENERAL.—Subsection (d) of section 5702 of the Internal Revenue Code of 1986 is amended by adding at the end the following new flush sentence: "Such term shall include any person who for commercial purposes makes available for consumer use (including such consumer's personal consumption or use under paragraph (1)) a machine capable of making cigarettes, cigars, or other tobacco products. A person making such a machine available for consumer use shall be deemed the person making the removal as defined by subsection (j) with respect to any tobacco products manufactured by such machine. A person who sells a machine directly to a consumer at retail for a consumer's personal home use is not making a machine available for commercial purposes if such machine is not used at a retail premises and is designed to produce tobacco products only in personal use quantities."
Frugal smokers are, well, smoking mad about this tax. They see it as Uncle Sam's attempt to shut down the hand-rolled cigarette market, forcing them to buy the more expensive, and taxed, packaged tobacco products.
Their fears seem to already be realized, at least in parts of the upper Midwest. Owners of eight Discount Smokes stores in Wisconsin have stopped running their centerpiece roll-your-own machines.
But as of midnight Saturday, store co-owner Lon Chester told the newspaper, "to be in compliance with the law, we will not be running the large rolling machine."
Pass on passports: The highway bill, however, does have good tax news for another specific group.
The Senate version of the highway bill had authorized the federal government to revoke passports of individuals who owed more than $50,000 in back taxes. That provision was removed from the final bill.
Allowable early IRA withdrawals -- You've done a good job saving for your retirement, but sometimes life just happens. And that could mean that you need to pull some money out of your IRA. But because of the tax advantages afforded these accounts, both traditional and Roth accounts, you need to be careful. The good news is that sometimes it's OK to tap your IRA. Two key instances when IRA withdrawals aren't penalized involve using the retirement funds to pay some schooling costs or to buy a first-home. There also are hardship situations where early IRA distributions are allowed. Remember, though, that even if you don't have to pay a 10 percent penalty for taking out your retirement money before you turn 59½, you still could face tax on withdrawal amounts where the tax was deferred. (May 15, 2013)
Check out all of the 2013 post-April 15 hints at Weekly Tax Tips.
You also can get a refresher of the Daily Tax Tips posted earlier this year on their respective monthly collection pages: January, February, March and April.
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Time for Tax Tasks
May 1: Happy May Day! This international holiday celebrating workers is a perfect time for employers of household help to review their tax responsibilities. You don't want to end up with facing nanny tax trouble!
May 10: Does your job include tips? If so and you received $20 in tips in April, use Form 4070 to report them today to your employer.
May 12: Happy Mother's Day! Make sure today is a special one for your mom. And if you're a mother, or about to be, be sure to check out the tax joys of parenthood.
May 16: With the arrival of warmer spring weather come home improvement projects, such as the planting of May flowers and bird-friendly plants.
May 22:Improving your home's energy efficiency also could get you up to $500 in dollar-for-dollar tax credit savings. Tax credits for a variety of relatively easy improvements were extended through 2013. More extensive (and expensive) upgrades employing solar, wind energy and geothermal systems could provide even more tax savings.
May 27: If you're hitting the road on the Memorial Day holiday to kick off summer, be on the lookout for bargain gasoline. State, local and federal fuel excise taxes can really ramp up pump prices.
Regardless of how you travel, if part of your trip is business related, Uncle Sam might be willing to pick up some of those costs when you file your tax return.
May 31: Was this the last filing season you want to go it alone at tax time? Then start searching for a tax professional now. You have more time to thoroughly investigate and pick the perfect tax pro.
If you filed for an extension, he or she could help you finish up this 2012 tax year task. And hiring a tax pro now will definitely help you get a head start on your 2013 return.
Forty-three states and D.C. collect personal income taxes. But even if you live in of the seven states without an income levy, you still face other state (and local) taxes.
State Tax Departments provides links to your state's Web page. The companion page, Tax Tidbits, is the compilation of blurbs about each state's tax laws. And for more state tax news, check out all our state tax bloggings.
Looking for something in particular? Start with the Table of Contents. Or check out the Archives, where you can review posts by month and category. Or enter specific keywords in the box below to search Don't Mess With Taxes.
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The Truth About Paying Fewer Taxes
Are you a tax geek? Got tax geek friends? Do you or they just want to make sure you don't overpay the IRS? Then my book, "The Truth About Paying Fewer Taxes," is for all y'all.
It's no wonder Uncle Sam is not very happy here. His vault is empty. Don't Mess With Taxes aims to keep him cranky by providing tax and personal finance tips and advice that will put more money in your bank account, not the government treasury.
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I am a professional journalist who has been covering tax issues since 1999. I am not a professional tax preparer. The content on Don't Mess With Taxes is my personal opinion based on my study and understanding of tax laws, policies and regulations. It’s provided for your private, noncommercial, educational and informational purposes only. It’s not a recommendation or endorsement of any company or product. I strongly suggest that when it comes to filing your taxes, you get additional, professional, paid-for guidance from your accountant and other financial advisers who are familiar with your individual circumstances. In other words, don't blame me!
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