Taxes

U.S. Has Highest Corporate Tax Rate in G20

March 10, 2017 Leave a Comment

Terence P. Jeffrey reported for CNSNEWS: “The United States has the highest top statutory corporate tax rate—39.1%–of any nation in the G20, according to a study released Wednesday by the Congressional Budget Office. That rate is nearly twice as high as the 20-percent rate in Russia, which, along with Saudi Arabia and Turkey, has the lowest statutory corporate tax rate in the G20. The U.S. won the top spot on the statutory-corporate-tax-rate list after Japan and Germany, which formerly ranked first and second, cut their rates. According to CBO, the United States made no change in federal corporate tax rates between 2003 and 2012, and by 2012 it had the highest top statutory rate in the G20.”

Donald Trump’s Five Points for Replacing Obamacare

February 28, 2017 Leave a Comment

President Donald Trump just delivered a nationally-televised speech to a joint session of Congress. Trump said the Affordable Care Act passed under President Obama “is collapsing –- and we must act decisively to protect all Americans.” He has presented five points for replacing Obamacare:

“First, we should ensure that Americans with pre-existing conditions have access to coverage, and that we have a stable transition for Americans currently enrolled in the healthcare exchanges.”
“Secondly, we should help Americans purchase their own coverage, through the use of tax credits and expanded Health Savings Accounts –- but it must be the plan they want, not the plan forced on them by the Government.”
“Thirdly, we should give our great State Governors the resources and flexibility they need with Medicaid to make sure no one is left out.”
“Fourth, we should implement legal reforms that protect patients and doctors from unnecessary costs that drive up the price of insurance – and work to bring down the artificially high price of drugs and bring them down immediately.”
“Finally, the time has come to give Americans the freedom to purchase health insurance across State lines –- creating a truly competitive national marketplace that will bring cost way down and provide far better care.”

The Best Retirement Account You Don’t Know About

February 21, 2017 Leave a Comment

A health savings account (HSA) is a triple-tax-advantaged account that allows individuals to save for current and future healthcare costs. The triple-tax advantages of HSA includes: (1) The contributions are tax-free, (2) the interest and dividends grow tax-free, (3) and the withdrawals are tax-free if spent on qualified medical expenses.

Your health savings account is a powerful tool to help you save and pay for qualified medical expenses today, tomorrow and in the future — even in retirement. Alicia Hudnett explained at CNN Money on why HSA is the best retirement account you don’t know about and why you should use it: “An HSA combines the best features of all the various tax-advantaged retirement accounts available. If used correctly, money goes in tax-free, grows tax-free, and comes out tax-free… An HSA account is similar to other retirement accounts in that the account is portable and moves with you, the funds roll over from year to year, and you can invest the money in the account for the long term. Even if you use some of the funds during the year and are able to save only a portion of your yearly contribution, you can invest the balance, making this another opportunity to save for your retirement years.”

Fight Tax-Refund Fraud and Identity Theft by Using This IRS Form

February 14, 2017 Leave a Comment

According to the Internal Revenue Service, tax-refund fraud jumped to $21 billion by 2016, from just $6.5 billion two years ago. Criminals can use your personal information such as your name, date of birth and Social Security number without your permission to commit fraud. With so many online filings available, it takes so little time to file a false return. Use Tax Form 8821, Tax Information Authorization, to fight identity theft. Form 8821 authorize any individual, corporation, firm, organization, or partnership you designate to inspect and/or receive your confidential information verbally or in writing for the type of tax and the years or periods listed on the form, and it also delete or revoke prior tax information authorizations. So by using Form 8821 and appoint yourself to receive communications and then if someone files a false tax return using your identity you would receive the information and take action to stop the tax-refund fraud and identity theft. You can avoid the fraud or recoup the money by letting IRS know that your tax refund has been issued improperly.

The Debts That You Can’t Discharge in Bankruptcy

February 13, 2017 Leave a Comment

Many people think that once discharge is granted by the Bankruptcy Court, the debtors are released from the liability of paying all debts. Think again! Not all your debts can be discharged in bankruptcy. Super Saving Tips lists several types of debts you can’t kick out in bankruptcy.

Debts you owe the government: “Have you been penalized or fined by the government? If so, I’m afraid bankruptcy can’t give you any relief. No one can give you any relief. You have to pay the fines and penalties or they will stay with you till your last breath. If you have more questions regarding government debt and how it will be treated in bankruptcy, then consult an attorney.”
Child support and alimony: “Child support payments and alimony aren’t dischargeable in bankruptcy. These two basically comprise the amount your child or ex-spouse needs for covering basic living expenses. Debts you owe due to marital property division don’t come under this kind of support. In a few states, these debts are dischargeable in bankruptcy.”
Student loans: “Millions of students and parents would have given a sigh of relief if student loan debts could be eliminated through bankruptcy. Unfortunately, in most cases, they can’t be discharged in bankruptcy proceedings. Private student loans, federal student loans, loans taken out from a school or university all can’t be kicked out by filing bankruptcy.”
Income tax: “Most people think about bankruptcy to discharge unpaid income tax. It isn’t impossible to discharge income tax in bankruptcy.”

(supersavingtips.com)

Finland’s Universal Basic Income Is Useless and Unworkable

February 12, 2017 Leave a Comment

According to Finnish Trade Union Economist as reported on Bloomberg, “Finland’s basic income experiment is unworkable, uneconomical and ultimately useless. Plus, it will only encourage some people to work less.” The trade union argues this Universal Basic Income program would cost 5% of Finland’s entire gross domestic product, making it impossibly expensive. “The labor group says the results of the two-year pilot program will fail to sway its opposition to a welfare-policy idea that’s gaining traction among those looking for an alternative in the post-industrial age. ‘We think it takes social policy in the wrong direction,’ said Ilkka Kaukoranta, chief economist of the Central Organization of Finnish Trade Unions, which has nearly one million members. Since January, a group of unemployed Finns aged between 25 and 58 have been receiving a stipend of 560 euros ($600) per month. The amount isn’t means-tested and is paid regardless of whether the recipient finds a job, starts a business or returns to school… Advocates say it eliminates poverty traps and redistributes income while empowering the individual and reducing paperwork… While limited in scope (it’s conditional on the beneficiary having received some form of unemployment support in November 2016) and size (it’s based on a randomly-selected sample of 2,000 jobless people), the Finnish trial may help answer questions like: Does it work? Is it worth it? And the most fundamental of all: Does it incite laboriousness or laziness?” (bloomberg.com)

Here Are More Ways to File Your Tax for Free. Yes, Absolutely Free!

February 10, 2017 Leave a Comment

Ann Carrns writes on The New York Times: “This year, there are numerous ways to prepare and file income tax returns free of charge — but the variety of features and qualifying criteria is dizzying. So it is important for filers to slow down and make sure the programs they choose are really the ones they want. The Internal Revenue Service continues to offer the Free File program — online, do-it-yourself tax preparation software from a dozen commercial vendors — to low- and moderate-income filers. (Generally, this refers to people who earn less than $64,000, although some companies set lower limits.) The online software is made available free to eligible tax filers under an agreement between the I.R.S. and the Free File Alliance, a group of major tax preparation providers that includes Intuit, the maker of TurboTax; H&R Block; and TaxAct. About 100 million people are eligible to use Free File, but only about three million do each year, said Tim Hugo, the alliance’s executive director. The disparity, he said, may be a result of the I.R.S.’s lack of an advertising budget.” (nytimes.com)

Stop Wasting Money! Here’s How to Do Your Taxes for Free

February 2, 2017 Leave a Comment

Every year complying with tax regulations cost Americans at least $107 billion, according an estimate by the General Accountability Office. As many as 57% of all people used a brick-and-mortar tax business to file their taxes with an average of $176 for a federal return with just the standard deduction plus a state return. Unless your tax situations are complex, The Finance Buff elaborates 6 ways to do your taxes for free:

(thefinancebuff.com)

Trump Pledges to Work with Big Pharma to Lower Drug Prices

January 31, 2017 Leave a Comment

Good news for consumers as President Trump pledges to work with Big Pharma to lower drug prices. His message to pharmaceutical company executives: bring your production back to the United States and the Trump administration will lower regulations for you. “So you have to get your companies back here. We have to make products … We have to get rid of a tremendous number of regulations,” Trump said. “I know you have some problems where you cannot even think about opening up new plants. You can’t get approval for the plant and then you can’t get approval to make the drugs.” Sanders and Rep. Elijah Cummings, D-Maryland, issued a joint statement shortly after the meeting saying they hope Trump “really” takes on the pharmaceutical industry. (cnn.com)

What Financial Documents to Keep and to Throw Away

April 16, 2016 Leave a Comment

Certain financial documents you can hold on to, “but you can let go of a lot of documents. And doing so will free you of all that paper and, perhaps, worry,” said Michelle Singletary at The Washington Post. Once you get your W-2 you can throw away the paycheck stubs, except the final stub that has a year’s worth of information. For prescriptions you can keep “for at least a year in case there is a dispute about payment.” You can shred the monthly bank statements as banks provide end-of-year information annually. You can also toss out utility bills unless you need them for tax deductions. For tax returns, keep the past seven years in case there’s an audit from IRS. “Finally, if you are unsure of what to keep, scan it.” (washingtonpost.com)

Don’t freak if you haven’t filed your taxes yet

April 13, 2016 Leave a Comment

About 1 in 5 taxpayers wait until the last week before the deadline to file their return, according to data from the IRS and tax-preparation TurboTax. Don’t freak if you haven’t filed your taxes yet. “All taxpayers can get an extra six months to file their taxes simply by asking for an extension using Form 4868. You can even file your extension request online using free software tools provided through IRS Free File,” said Jeff Reeves at USA Today. Just keep in mind that you need to pay the estimated tax bill even if you file an extension, or you will be charged a failure-to-pay penalty. (usatoday.com)

Americans Spend 6.1 Billion Hours to Do Their Taxes Each Year or 16 Hours Per Person

April 12, 2016 1 Comment

According to personal finance website WalletHub, Americans spend 6.1 billion hours to do their taxes each year at a cost of $233.8 billion. It averages out to be 16 hours per person at $270. Due to a lot of waste hours and loss of productivity, the IRS also offer $10,000 prize by launching a crowdsourcing challenge to help improving the tax filing process. You can find other interest highlights below:

30.5 Minutes: Wait time for calls to the IRS in 2015
62%: Of calls went unanswered in 2015
6.1 Billion Hours: Time it takes Americans to do their taxes each year (16 hours per person)
35%: Of taxpayers would rather discuss sex with their kids than do their taxes
27%: Of Americans would get an IRS tattoo to avoid taxes for life
700%+: Increase in tax-related identity theft cases since 2010
23%: Decrease in IRS enforcement staff since 2010

(wallethub.com)

5 Biggest Revelations From the Panama Papers

April 11, 2016 Leave a Comment

The Panama Papers are a leaked set of 11.5 million confidential documents that provide detailed information about more than 214,000 offshore companies. According to the International Consortium of Investigative Journalists, the historic data leak tied “140 politicians from more than 50 countries, connected to offshore companies in 21 different tax havens.” The leak is so big that China’s government is suppressing mentions of the Panama Papers on social media and in search engines results. It also told news organizations to delete all content related to the Panama Papers leak. Here are 5 biggest revelations from the Panama Papers as detailed on Vox:

The Panama Papers caught Iceland’s prime minister in an incredible conflict of interest
The $2 billion trail in the Panama Papers that leads to Vladimir Putin
Brazil is on the brink of political collapse, and the Panama Papers added fuel to the fire
China wishes the Panama Papers never happened
Argentina’s president ran on a campaign of transparency. Now he has been named in the Panama Papers.

Win $10,000 From the IRS by Submitting Idea to Improve Tax Filing Process

April 11, 2016 Leave a Comment

As reported on Wall Street Journal, the Internal Revenue Service is launching a crowdsourcing challenge to “design the taxpayer experience of the future.” The contest, which comes with a $10,000 grand prize, begins April 17 with judging scheduled for May and June. The $10,000 grand prize will go to the best overall submission, but the IRS will issue smaller cash prizes in categories such as “Best Taxpayer Usefulness” and “Best Financial Capability.” (wsj.com)

Americans Spend More on Taxes Than Food, Clothing, Housing Combined

April 9, 2016 1 Comment

According to the Tax Foundation’s annual report, Americans spend more on taxes than their whole budget for food, clothing and housing. “Tax Freedom Day gives us a vivid representation of how much federal, state, and local tax revenue is collected each year to pay for government goods and services,” said Tax Foundation Analyst Scott Greenberg. “Arguments can be made that the tax bill is too high or too low, but in order to have an honest discussion, it’s important for taxpayers to understand the cost of government. Tax Freedom Day helps people relate to that cost.” (washingtonexaminer.com)