by NFS | Mar 21, 2011 | Archives
Washington, D.C. – Rep. Jan Schakowsky, D-Ill., has introduced a bill that would levy taxes of 45 to 49 percent on millionaires and billionaires.
Schakowsky, who was a member of President Obama’s deficit reduction commission, introduced the Fairness in Taxation Act on Wednesday. The bill would create the following new tax brackets for millionaires and billionaires:
• $1-10 million: 45%
• $10-20 million: 46%
• $20-100 million: 47%
• $100 million to $1 billion: 48%
• $1 billion and over: 49%
The current top tax bracket begins at $373,000 in income and fails to distinguish between the “well off” and billionaires, such as the top 20 hedge fund managers whose average income last year was over $1 billion, Schakowsky pointed out.
The bill would also tax capital gains and dividend income as ordinary income for those taxpayers with income over $1 million. If enacted in 2011, the Fairness in Taxation Act would raise an estimated $78 billion or more, according to Schakowsky.
“In the United States today, the richest 1 percent owns 34 percent of our nation’s wealth,” Schakowsky said in a statement. “That’s more than the entire bottom 90 percent, who own just 29 percent of the country’s wealth. And the top one-hundredth of 1 percent now makes an average of $27 million per household per year. The average income for the bottom 90 percent of Americans? $31,244. It’s time for millionaires and billionaires to pay their fair share, which is why I introduced the Fairness in Taxation Act. This isn’t about punishment or revenge. It’s about fairness. It’s about avoiding budget cuts that harm middle-class families and those who aspire to it. We can choose to cut education, job creation and health care, or we can choose to ask those who can contribute more to do so.”
The bill has attracted support from several other Democrats, including the co-chairs of the Congressional Progressive Caucus, Raul Grijalva, D-Ariz., and Keith Ellison, D-Minn., as well as Jesse Jackson, Jr., D-Ill., Donna Edwards, D-Md., Bob Filner, D-Calif., Jerry Nadler, D-N.Y., Steve Cohen D-Tenn., John Yarmuth, D-Ken., and Peter DeFazio, D-Ore.
On Thursday, House Ways and Means Committee Chairman Dave Camp,. R-Mich., proposed cutting the top tax rate for individuals and corporations to 25 percent.
by NFS | Mar 21, 2011 | Archives
Parents need to be aware of the tax rules that affect their children’s investment income. Here are four facts from the IRS that will help parents determine whether their child’s investment income will be taxed at the parents’ rate or the child’s rate:
- Investment Income Children with investment income may have part or all of this income taxed at their parents’ tax rate rather than at the child’s rate. Investment income includes interest, dividends, capital gains and other unearned income.
- Age Requirement The child’s tax must be figured using the parents’ rates if the child has investment income of more than $1,900 and meets one of three age requirements for 2010:
- Was under age 18 at the end of the year,
- Was age 18 at the end of the year and did not have earned income that was more than half of his or her support, or
- Was a full-time student over age 18 and under age 24 at the end of the year and did not have earned income that was more than half of his or her support.
- Form 8615 To figure the child’s tax using the parents’ rate for the child’s return, fill out Form 8615, Tax for Certain Children Who Have Investment Income of More Than $1,900, and attach it to the child’s federal income tax return.
- Form 8814 When certain conditions are met, a parent may be able to avoid having to file a tax return for the child by including the child’s income on the parent’s tax return. In this situation, the parent would file Form 8814, Parents’ Election To Report Child’s Interest and Dividends.
More information can be found in IRS Publication 929, Tax Rules for Children and Dependents.
by NFS | Mar 19, 2011 | Archives
Come visit me at the LCOR Health Fair Sunday 03/20/11 from 9:30-11am and bring your questions on Life Insurance, Health Insurance, Disability & LTC. 212 Main Street, Foxboro MA 02035
by NFS | Mar 18, 2011 | Archives
Washington, D.C. – A Tennessee congressman has introduced a bill that would allow the Internal Revenue Service to prepare taxes for a taxpayer.
Rep. Jim Cooper, D-Tenn., introduced the Simple Return Act (H.R. 1069). The bill would allow the IRS to fill out a basic tax return for every American with the financial information it already receives from each taxpayer’s employer and financial institution: W-2 and 1099. Every American would have the opportunity to review and sign the government return, or simply throw it away and fill out their return on their own.
“Here’s a simple idea for reducing the hassle of paying your federal income taxes,” Cooper said in a statement. “Make the IRS do your paperwork. They already have much of your tax information like copies of your W-2 and 1099s. Today they use that information to catch you if you make a mistake. Why not get the IRS to use that information to help you instead of punish you?”
The Simple Return could be used by anyone with basic tax information. It is estimated that around 40 million Americans would be able to use this service saving $2 billion in preparation fees and 225 million hours of preparation time. Converting that time into money, it is estimated that savings could reach $44 billion over 10 years.
The idea was floated 25 years ago by President Reagan, and he asked the Treasury Department to study the concept, according to an op-ed in The Tennessean written by CPA Mike Schmerling, which Cooper ran on his Web site. California has already run a successful pilot program using a Simple Return for state income taxes.
By Accounting Today
by NFS | Mar 17, 2011 | Archives
Due to a computer processing glitch, the IRS mailed 200,000 CP-14 balance due notices to taxpayers who filed electronically. These notices told the taxpayers that their balance was due by April 15, even if they had already designated automatic withdrawal from their bank accounts.
These notices were not to be processed in the middle of tax season, and instead should have been processed after the database had been updated to account for direct debit payments.
The IRS has stated that if a taxpayer consequently pays twice using direct debit and check, the IRS will automatically issue a refund for any overpayment.
It is important to note that not all taxpayers have received a Notice CP-14 in error. If the bank account listed on the tax return was listed incorrectly, a taxpayer would receive this notice.
