But wait, you ask—what do taxes have to do with signing up for health insurance? Quite a bit, it turns out. The IRS just released some health care tax tips—from those, here are a couple of really important highlights to keep in mind between now and next tax season. And yes, I did say next tax season—what you know now will definitely help you later. Read more »
"The federal statute is invalid, for no legitimate purpose overcomes the purpose and effect to disparage and to injure those whom the State, by its marriage laws, sought to protect in personhood and dignity. By seeking to displace this protection and treating those persons as living in marriages less respected than others, the federal statute is in violation of the Fifth Amendment."
U.S. v. Windsor
“In light of the Windsor decision, the [Internal Revenue] Service . . .concludes that the terms “husband and wife,” “husband,” and “wife” should be interpreted to include same-sex spouses.”
IRS Rev. Rul. 2013-17
I know this might sound strange, but filing my taxes the year after my wedding made me feel more married. I remember it distinctly—around this time of year, the W-2s arrived. My husband and I worked on the tax return together, and filed using the Married Filing Jointly status. There was something about that tax form recognition that felt weighty and real. Official.
This week, the Chairman of the Senate Finance Committee released several initial proposals to overhaul the tax code. One of these proposals deals with changes to the administration of the tax laws. So what do administrative tax law changes have to do with family economic security, you ask? A lot. They can help ensure that eligible families receive the tax credits they’re entitled to—and don’t fall victim to expensive and dangerous scams.
Americans for Tax Fairness has released the results of a new poll on taxes and spending that should define the issues in current negotiations over the federal budget.
Last month, Congress passed, and the President signed, a deal to end the shutdown, suspend the debt ceiling, and fund the federal government through January 15, 2014. What the bill left undone is a plan to fund the government after January 15. To that end, House and Senate leaders have agreed to meet in a conference committee on the FY 2014 budget, with the goal of reaching agreement on a budget plan for the remainder of the year by December 13.
The Senate-passed budget protects core safety net programs, proposes new investments to expand early childhood programs and grow the economy, and calls for a balanced package of revenue increases and spending cuts to replace the across-the-board federal budget cuts of the sequester; in contrast, the House-passed budget would end the sequester only for defense programs, while making even deeper cuts to programs that support low-income Americans and giving trillions in tax cuts to millionaires and corporations.
There’s no guarantee that the conference committee will be able to reach agreement, and no penalty if they don’t — at least for Congress. Read more »
On Halloween, the IRS issued a warning about a definite TRICK — a sophisticated phone scam targeting taxpayers, including recent immigrants, across the country.
The scam involves a call from someone claiming to be from the IRS, who tells the victim that they owe the agency money—and asks for payment through a pre-loaded debit card or wire transfer. Victims are threatened with arrest, deportation, or the suspension of a business or driver’s license if they don’t comply.
Unfortunately, the scam is pervasive—according to the IRS, it is impacting people in almost every state in the country. It is also highly sophisticated—scammers are able to provide victims with the last four digits of their Social Security number, and also imitate the IRS’s toll-free phone number on caller ID.
If you get a phone call from someone claiming to be from the IRS, here’s what to do:
If you know you owe taxes or you think you might owe taxes, call the IRS at 1.800.829.1040. The IRS employees at that line can help you with a payment issue – if there really is such an issue.
Last week, my daughter celebrated her first birthday. Marking that important milestone for my family allowed me to reflect on the difference that just a year can make. Today I’m celebrating another important milestone for my family and for yours—the one hundredth birthday of our federal personal income tax—and reflecting on its benefits for all of us.
One hundred years ago today, President Wilson signed the Revenue Act of 1913 into law, giving birth to the personal income tax. Although that first personal income tax looked a lot different than it does today, its adoption signified an important shift in our country’s approach to raising revenue. In honor of this important birthday, here are two things to celebrate about the federal personal income tax—and one suggestion to make the next hundred years even better. Read more »
You might ask why Apple is the subject of this congressional scrutiny; after all, Apple did pay about $6 billion in taxes in the U.S. last year on its American operations, which is more than some major corporations that managed to avoid paying any federal income tax at all. But as Senator John McCain observed, while "Apple claims to be the largest U.S. corporate taxpayer... by sheer size and scale, it is also among America's largest tax avoiders."
Specifically, a new report from congressional investigators concludes that Apple used a web of offshore tax shelters to avoid paying billions in taxes to the United States and other countries. The investigators found that Apple's tax avoidance strategies shielded at least $74 billion from the Internal Revenue Service between 2009 and 2012. By officially locating subsidiaries in places like Ireland while managing them from company headquarters in California, Apple was able to, in effect, make the subsidiaries "stateless" — so they were exempt from taxes anywhere in the world. In its own analysis of Apple's financial reports, Citizens for Tax Justice found that "Apple has paid almost no income taxes to any country on its $102 billion in offshore cash holdings."
Pretty sneaky, right? But that doesn't mean it's illegal. The U.S. tax code makes it awfully easy for Apple and other giant corporations to avoid paying taxes. Read more »
In my first Tax Day blog post, I focused on one really unfair aspect of our tax code: the wealthiest Americans often benefit more from all sorts of deductions and exclusions than middle-income taxpayers do.
But the super-rich aren’t the only ones who might be getting a better deal from the tax code than you. If you paid even a dollar of federal income tax last year, you paid more than Facebook did. And more than FedEx. And more than Southwest Airlines. Every year, these and many other large, profitable corporations manage to take advantage of loopholes and special preferences in the tax code to avoid paying their fair share of taxes; in fact, these companies often end up with a big tax rebate. Today, Citizens for Tax Justice is calling out these tax dodgers, making the rounds in D.C. with a giant mobile billboard:
Happy Tax Day, everyone! When it’s time to pay my taxes, I try hard to focus on all of the important programs and services those dollars support. (You can see exactly how your own federal income taxes are spent using this nifty Tax Receipt from the National Priorities Project.)
But I have to admit – I’m also thinking about the people who make a whole lot more money than I do and get a better deal from the tax code. The fact is, super-rich taxpayers currently benefit much more than ordinary taxpayers like me from many federal income tax deductions and exclusions. For example, for a wealthy taxpayer in the top tax bracket (39.6 percent) who pays $10,000 in mortgage interest, the mortgage interest deduction is worth $3,960. For a middle-income taxpayer in the 15 percent tax bracket who pays the same $10,000 in mortgage interest, the deduction is worth only $1,500.
This post is the ninth in a series of weekly posts containing tax information and filing tips. Check back next week for our next post, or click here to read past posts.
So today is the deadline for filing your federal tax return (and most state returns). Although many people associate filing their taxes with feelings of confusion, stress, and general misery, tax time can also help give low- and moderate-income families a financial boost through federal tax credits like:
Earned Income Tax Credit, designed to supplement the wages of low- and moderate-income families (those who earned less than $50,270 in 2012). This credit is worth up to $5,891 and is available as a refund for families who owe little or no income tax.
Child Tax Credit, designed to help families offset some of the costs of raising children. This credit is worth up to $1,000 per child. Families who owe little or no income tax can receive some or all of this credit as a refund if they earned at least $3,000 in 2012.
Child and Dependent Care Tax Credit, designed to offset some of the child and dependent care costs that families incur in order to work. This credit is worth up to $2,100, though the amount that can be claimed is limited by the amount a family pays in federal income taxes.
And many states offer their own versions of these credits. Read more »