H&R Block Backs Voluntary Tax Certification Program

H&R Block Inc. has taken the forefront to elevate industry standards in tax preparation by supporting a new voluntary certification program initiated by the Internal Revenue Service.

Tax preparers who voluntarily enroll in continuing education courses covering basic tax filings, tax updates, ethic of tax preparation and other related issues will now receive a record of completion noting their efforts. The purpose of the IRS program is to help taxpayers find qualified individuals to prepare tax returns and to help them avoid unethical practices. A study indicating that 42 million Americans have used a tax preparer with no credentials and who operates under no state regulations or minimum standards is the impetus for this program. That figure represents about 54 percent of all returns prepared by someone other than the tax filer.

In a letter supporting the program, H&R Block CEO Bill Cobb encourage the United States government to continue promoting voluntary certification actions, indicating that his company believes the U.S Congress should set standards for professional tax preparers. Until Congress passes such legislation, however, Cobb believes a voluntary certification program is essential to protect the concerns of consumers. Such a program should also include components of the Registered Tax Return Preparer Program that the IRS previously implemented, including registration, competency measures, screenings and continuing education.

Cobb has previously commented that on an appeals court ruling that the IRS cannot regulate tax preparer, indicting that the ruling hurt honest taxpayers who are entitled to basic protections.

Kansas City-based H&R Block is one of few companies that requires minimum standards from its staff. All company tax preparers must have at least 75 hours of tax law and tax return courses in the first year of employment with 15 hours of continuing education for each subsequent year. Also required is 35 hours of system, policies and procedural training.

Tax Carnival Ecstasy – April 10, 2013

English: Rep. Greenwood receives the "Her...
English: Rep. Greenwood receives the “Hero of the Taxpayer” Award from Americans for Tax Reform. (Photo credit: Wikipedia)

Welcome to the April 10, 2013 edition of Tax Carnival Ecstasy. We start this edition with a post from Dominic Mondal on Securing your Pension Plan by Investing in Self Managed Super Funds. Bill Smith takes a look at the U.S. tax reform and the effect of a decrease in the tax code’s bias for debt. John Schmoll has 4 Ways to Make Filing Taxes Easier from the Frugal Rules blog. And finally Edward Webber presents The New Tax Code for 2013-2014. Hope you enjoy the articles, bookmark, share, tweet, like on Facebook and come back for our next edition.

dominic mondal presents Securing your Pension Plan by Investing in Self Managed Super Funds and Property posted at Recent Articles.

deductions

Bill Smith presents U.S. tax reform – Effect of decrease in the tax code’s bias for debt posted at 2012 Tax – Free Tax Filing Options, saying, “The much awaited tax reform has at last arrived to reduce the tax code’s bias for debt.”

filing

John Schmoll presents 4 Simple Ways to Make Filing Taxes Easier Every Year – Frugal Rules posted at Frugal Rules, saying, “Very few people enjoy doing and filing their taxes. However, with a few simple steps you can make the process easier every year.”

retirement

John Schmoll presents Financial Advisor Compensation – Why it Matters posted at Frugal Rules, saying, “A financial advisor can be a great way to help you grow your portfolio when you have long term goals in mind. Make sure you do your homework and hire one that you feel right about and best fits your needs and goals.”

tax law

Bill Smith presents The Discretion of the President to Plan Cuts Under Debate posted at 2012 Tax – Free Tax Filing Options, saying, “President Barack Obama has been pretty vocal about the effect that automatic budget cuts are going to have.”

taxes

Alan Webster presents A Day in the Life of a Trader posted at TradingAcademy.com, saying, “Have you ever wondered what the average day is like for a trader? In this blog post we interview Steve Moses, an options trader, to sneak a peek into his average day.”

Edward Webber presents The New Tax Code for 2013-2014 posted at TaxFix Feed Update, saying, “In the UK the tax allowance is about to increase. This means that anyone working in the country can earn 9,449 pounds before they need to pay any tax. This post explains all about it.”

Bill Smith presents Innovations For Turbo Tax 2013 posted at 2013 Taxes, saying, “Professional accounting can help business owners save time and resources, and the Turbo Tax 2013 CPA Select edition by Intuit may be the ideal solution for tax filing season.”

Bill Smith presents Easy Online Tax Filing With Free Turbo Tax 2013 Software posted at 2009 Taxes, saying, “Having expert tax assistance can be the best way to avoid financial penalties, complete your filing on time, and maximize your refund.”

Bill Smith presents The Benefits Of Using TurboTax 2013 To File Your Taxes posted at 2012 Taxes – Free Tax Filing Options, saying, “If you have never used Turbo Tax before, you need to consider filing your taxes with this computer program this year.”

Bill Smith presents Jackson Hewitts Tax Advice For Recent College Graduates posted at 2008 Taxes, saying, “Recently, Jackson Hewitt released its biggest tax tips for college graduates. Recent graduates often make some big mistakes on their returns that are more than avoidable.”

Bill Smith presents Last Minute Tax Tips When Using Turbo Tax 2013 posted at 2009 Tax, saying, “Before you head to TurboTax.com, take a moment to read through these tips. With the deadline approaching, you need to know what to do at the last minute to make the filing process successful.”

Bill Smith presents Finding The Right Online Tax Prep posted at 2009 Taxes, saying, “The nice thing about these different options is that they are all free and allow you to quickly get your information in so you can receive your refund.”

Bill Smith presents TurboTax Helps Users Get More Accurate Tax Returns posted at 2010 Tax, saying, “Each year, Americans are forced to go through last year’s financial information and prepare a tax return.”

tips

John Schmoll presents How Should You Spend Your Tax Return? posted at Frugal Rules, saying, “The average tax return is nearly $3,000. Receiving that sum of money all at once can lead to easy temptation. Make sure you make wise decisions with that money, whether it be paying off debt or investing for the future so you can make the money work for you.”

That concludes this edition. Submit your blog article to the next edition of tax carnival ecstasy using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

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Gay Marriage Increases Federal Tax Headaches

Federal Tax Headaches

Federal Tax Headaches

The advent of a new era in our nation’s history brings with it more than gay marriage acceptance; we are witnessing the dawn of a new era of federal tax headaches.  Tax law for same-sex married couples is more complicated than that of their heterosexual counterparts, creating a need for consultation that was not needed before marriage.  Couples in this situation may find taking their taxes to an institution to be beneficial, especially considering many of them offer free federal tax filing.

Due to the 1996 Defense of Marriage ACT (DOMA), same sex marriages cannot be recognized at a federal level despite the fact that at a state level the tax rules differ quite a bit.  Gay marriage is not recognized federal tax forms so gay and lesbian spouses cannot file their taxes jointly.  Ken Weissenberg, a partner at EisnerAmper in New York says, “The nightmare of compliance is difficult and the cost of compliance will be at least double, and I think you face a greater risk of audit.”

Gay marriage tax-time difficulties affect more than 130,000 couples around the country.  The process changes depending on many factors, including wealth and whether or not there are children. Couples may want to consider taking advantage of the free federal tax filing offers from various companies.  They can then be sure of professional, accurate filing, with the greatest returns.

Taxing the Sin of Luxury

Tax Act

The luxury tax and it’s close relative the sin tax are concepts that are up for debate. Depending on which economist you speak to you will get a wide range of opinions on whether this type of tax is helpful or hurtful to the economy. The luxury tax pretty much affects only the wealthy (i.e. those who can afford to buy luxury items) and consist of a tax that is applied to goods that are deemed unnecessary or nonessential. The sin tax applies to things can be seen as extreme, sinful and unnecessary to the individual and to society, like cigarettes and alcohol. Another example of the sin tax is the increased rate at which lottery and game-show winnings are taxed.

The luxury tax was originally imposed during times of war as a way to increase government revenue and to have wealthy families pay more, since theoretically they could afford it. But in reality is it helpful or harmful?

One way of looking at it is to take the concept of Veblen goods. These are items that go up in popularity as their price increases. The reasoning behind this is that it increases the items ‘snob appeal’ and gives the purchaser greater status. Examples of items that could be a Veblen product are fancy cars, expensive wines, designer-handbags, decadent jewelry, furs and yachts. When the price of these items go down then certain people don’t want to buy them as much. These goods are often sought out to increase social status, as a way to show-off to peers and to give the owner a feeling of satisfaction. It all comes down to exclusivity, aka the ‘Snob Effect’.

Those against it argue that adding a luxury tax to an item may curb demand, which will then end up hurting the middle class, i.e. the workers, as their products won’t be sold. If buyers seek other items, when this happens the middle class lose there income and this leads to increased unemployment benefits, so the government actually loses money. For example when a 10% federal surcharge was enacted on luxury goods in the US in 1991, sales of the effected products decreased drastically. Since it led to such a negative effect on the economy through job loss and tax revenues from lost sales it was quickly dropped.

This also happened is Canada in the late 1980s, when a large luxury tax was added to cigarettes. Instead of seeing tax revenue increase, there was actually a decrease as people stopped buying them legally and cigarettes started appearing on an oftentimes violent black market. This led to more government resources being used to fight this crime, and so the tax was soon repealed.

On the other side, the consumers that can afford non-necessities are usually rich and lead extravagant lifestyles. In 2007, luxury goods in the US were a $157 billion dollar industry. Between 1979-2003, income grew 49% for the top 5% of earners and 111% for the top 1%, and it has been shown that even in a slow economy there will always be a luxury market. This is an enormous tax base that could bring much needed revenue to the government.

 

Sarah Parker is a writer and blogger from Greensboro, NC. She enjoys all things outdoors, especially camping, gardening, and swimming. Her favorite time of the year is summer (of course!) and she aims to leave as tiny of a carbon-footprint as possible throughout her daily life.

 

 

Tax Advice for Newly Weds

Tax Act

The Internal Revenue Service (IRS) offers useful tips for newlyweds when it comes to filing tax returns.  In many cases, filing a joint return may allow for more savings but taking time to review whether or not you should file separately, will help both parties determine the best option.  There are several factors to keep in mind that will help minimize mistakes which could delay the processing of your return.

  • Determine which filing status to file and discuss whether or not to change your filing status.  Many are comfortable in continuing to file separately after marriage.
  • Make sure names are correctly used on the return.  If the wife had her name changed, it should correspond with her Social Security number.  If the name change has not been reported the IRS may not be able to process the return.  The Social Security Administration should be notified upon marriage of any name changes so that a new Social Security card can be issued.
  • Make sure you have all paperwork needed to file your return.  This includes W2 forms, business records, receipts and 1099 forms.  Discuss documentation and review information to understand what is being reported on your return.
  • Review personal finances for the tax year in question.  Discuss any tax debt, financial hardships or anything they may have an effect on the outcome of your return.
  • Decide you filing status. You can choose married filed jointly or married filed separately.  Keep in mind, in many states, a couple is jointly responsible for any taxes owed. In some cases, in order to benefit from certain deductions, you may have to file separately.
  • Review tax breaks available.  As a married couple there are deductions and credits available that you can take advantage of.  This may include mortgage interest, moving expenses and child tax credit.  You may also deduct student loan interest.
  • Don’t be afraid to ask for assistance from a qualified tax professional.  Discussing your taxes with a tax expert can help both parties understand deductions available, which filing status is best and give clarification on any concerns.
  • Your first filed return may give an idea of how future returns are filed.  Even after tax returns are filed, discuss finances throughout the year.  You may need to take note of a few changes now that you’re married and note certain deductions for next tax season.

Andrew writes frequently about personal finance as well as issues effecting both consumers and small businesses, covering everything from savings to mortgages to medical aid quotes.