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.

When Are Taxes Due? And Other Answers to Your Tax Questions

When Are 2011 Taxes Due? And Other Answers to Your Tax Questions

Whether you file your taxes on your own or with the help of a tax professional, the entire process can leave you with questions. From trying to figure out the tax code changes between this year and the last to trying to make sense of the various deductions you can take, filing taxes is rarely ever straightforward.

Here are the answers to some of the most common questions regarding taxes:

1. When are 2011 taxes due?

While April 15 is the classic due date, you must have your taxes filed by April 17 in 2012. Because the 15th falls on a Sunday and the 16th is a holiday in the District of Columbia, you get an extra couple of days to get those tax papers to the IRS.

2. Where should I mail my tax return in 2012?

The addresses for the IRS facilities to which you mail a paper return have changed. Be sure to look over your form instructions to find the proper mailing address. Not doing so could lead to penalties for late filing due to returned mail.

3. What amount do I claim for standard deductions and exemptions?

Good news! The amount for both of these categories has actually increased this year. If you do not itemize your deductions, then your standard deduction is higher. Also, instead of only being able to deduct $50 per exemption, you will be able to deduct $3,700 for each one on 2011 taxes.

4. Can I still claim the first-time home buyers tax credit on my return?

This credit is not available anymore. However, if you are a member of the military or if you work in the intelligence sector, you may still be able to claim it.

5. Can I still claim the alternative motor vehicle credit?

New fuel cell motor vehicles are still eligible for the credit in 2011.

6. What is the limit on age for claiming a dependent?

If you are claiming your child as a dependent, you can only claim them if they are under the age of 19, under the age of 24 and a full-time student for at least five months of the tax year, or completely disabled at any age. You can also claim certain qualifying relatives if they meet the proper criteria.

7. Can I direct deposit my IRS refund into multiple accounts?

Yes, you may split your refund however you like and deposit it into up to three different accounts.

8. How do you claim head of household status for tax purposes?

If you were unmarried and the primary caregiver of a child that lived with you for over six months of the year, you can file as Head of Household. To qualify, you don’t need to claim the child as a dependent.

Tax Act

Tax code and rules change from year to year. If you ever have any doubts about any section of your tax forms, you should contact a tax consultant or the IRS to clarify. Making mistakes on your taxes can result in audits and fines.

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RG Brenner wants to remind you that filing your taxes properly and claiming deductions you qualify for are important for minimizing your taxes. If you still have questions about the 2011 taxes or if you need assistance in filing your taxes, visit www.rgbrenner.com.

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.

 

 

Chris Christie and Taxes At 10% Realistic Or Rediculous

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A ten percent income tax for every citizen in New Jersey is Governor Chris Christie‘s plan. His belief is that to change the present economic crisis requires a radical approach to income taxes. A fiscal conservative he proposing to cut the state’s spending at the same time he is promoting income tax cuts.

Christie views himself as an economic visionary who is willing to take tough actions to pull his state out of its economic quagmire. His speaking engagements on radio, television, and at town hall meetings make him appear as a current Republican candidate for president, but his goal is the 2016 election. He is confident his plan will work for New Jersey and the Nation. In California, Illinois, and New York, Democratic governors are taking an opposite approach to his plan. They are raising taxes for all citizens and making sure the upper-class proportionally pay an equal share of their taxes. These Democratic governors want to lower the deficits in their states. Borrowing on empty bank accounts will only create more debt. States cannot be competitive if their economic standing is low and they have no money for their states infrastructure and basic needs.

Tax policies, which put on increased burden a state’s ability to be economically solvent are seen by many leaders as unrealistic. His plan which borrows from a bankrupt account may not be what New Jersey needs. His plan is radical, but similar to elective surgery the people of his state may want a second opinion.