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.
Is the U.S. Corporate Tax Rate the Highest in the World?
There is a popular belief that the current corporate tax rate in the country is very high, and a reduction of the prevailing rate will stimulate investments which will have a wide range of positive effects on the economy. Those who support this theory are referring to the current rate which stands at 39.1% (the highest in the industrialized world). According to proponents, this income tax rate is putting U.S. corporations at a competitive disadvantage. But is there more to the story?
The truth is that US companies pay the highest corporate tax rate, but the vast majority of them have perfected the art of not paying it. According to official government records, the amount of corporate tax collected by the government has reduced significantly over the years. The ratio of the corporate tax paid to the total pre-tax profit earned by US corporations is the lowest in history.
A recent report by the CTJ (Citizens for Tax Justice) had some shocking revelations. The organization analyzed the federal income taxes and pre-tax profits of 288 Fortune 500 corporations that recorded huge profits for the five years leading up to the year 2012. The following are some of the findings:
While the federal U.S. corporate tax rate stands at 35%, the 288 most profitable companies only paid a tax rate of 19.4% over the 5-year period. What is more shocking is that General Electric, Boeing, Verizon and Priceline.com did not pay any federal income tax over this period. 93 corporations (33.3% of those analyzed) paid a tax rate of less than 10% over this 5-year period. Of the 288 Fortune 500 firms, 111 paid at most zero percent taxes for at least one year during this five year period. What’s interesting is that these corporations had a pre-tax profit of $227 billion, but paid no taxes. Whatever, the corporate tax rate in the country, the big companies usually find ways of paying less than they are required to.
If you’ve used TurboTax before, then you should expect some changes this time around. Recently, Intuit’s tax software has become a little confusing. The user interface didn’t exactly welcome simplicity and efficiency. Sometimes, users would get frustrated by looping links and other problems. Such issues could easily hurt a person while preparing their taxes using the software. Intuit finally listened to customers’ concerns and made changes to the popular tax preparation software in a TurboTax Redesign.
For TurboTax 2014, filing taxes now looks a lot smoother and easier to navigate. A TurboTax Redesign of the user interface has been undertaken and completed. Intuit stated a desire to lessen the time required to complete a return. With that in mind, the software now takes better advantage of prior year returns. TurboTax now analyzes that information and focuses upon each person’s typical tax situation. Returns are partially filled out before a person even starts their return.
While using the software, your tax liability indicator changes with each tax question. In the past, there were no real explanations for the changes. TurboTax 2014 now explains why these calculations affect your tax liability. New guides help explain various tax law changes, including Obamacare. Of course, each modification is designed to make things more simple and efficient for filing taxes and filing back taxes. Intuit has returned power to taxpayers by allowing them to complete their taxes with ease.
In the end, the company focused upon the right things for TurboTax 2014. Filing taxes is now much easier because prior returns are utilized to create a custom experience for each taxpayer. Plus, the competition hasn’t made similar bounds forward. Therefore, Intuit still offers the best tax preparation software around. Nobody needs to spend a fortune on tax preparation because Turbo Tax offers every tool a person needs to succeed each year.
2013 and 2014 taxes may be different for the wealthy due to several new tax implementations. The top tax rate may be steeper, and the actual percentage may depend upon what is included. People may be surprised by the changes, and this may be the ideal time to let TurboTax 2013guide you through efficient tax preparation.
Income inequality continues to be a major political issue, and things like extending jobless benefits, raising the minimum wage, and imposing changes that affect the top tax rate are central to addressing this issue. Some of the newer 2014 taxes include changes to capital gains taxes, and 2013 is the first year that taxpayers will feel the impact. New payroll and Medicare taxes may effect wealthy taxpayers starting in 2013, and the increases may net $87 billion over the next decade.
The 2013 tax filing season will begin on January 31st, but wealthier individuals may already see differences in their withholding going forward. The law is applied unevenly, and this may result in withholding for some people, exemptions in some cases, and larger tax refunds for others.
Changes involving capital gains, interest, dividends, and other types of investments may increase tax bills, but income after taxes may decrease by a small percentage. The percentage may not seem like much, but losing this share of income may seem substantial. You may not know where your income will place you in terms of the current tax rate changes, but TurboTax 2013 may give you the important answers you need.
Even if one is certain there are no mistakes in the forms when following federal tax procedures, a little shiver goes down a taxpayers spine at the very thought of a letter arriving from the IRS. The Internal Revenue Service blundered recently when the office sent penalty notices to business owners who had requested an extension in filing tax return Form 5500 to file back taxes. An error in programming caused the mistake regarding the required Form 5558, the Application for an Extension of Time to File Certain Employee Plan Returns, before filing Form 5500. Normally, taxpayers are penalized if the Form 5500 is late or unfinished. However, the notice to those taxpayers who filed the proper forms in the right order received the penalty notice, CP 283, Penalty Charged on Your 5500 Return.
A letter of explanation concerning the inaccuracy was instituted November 8th to IRS employees. Citizens received a penalty notice before the Form 5558 had an opportunity to post to the accounts. Therefore, letters of explanation were prepared while telephone assistors and tax examiners were instructed to apologize to callers. Penalties were removed in all cases, up to five if the caller was a person with multiple plans or clients. If the person was responsible for more than 5 accounts, they were requested to solicit their abatement in writing. The Internal Revenue Service accepted responsibility for the penalty notice to the taxpayers and the charges were removed. It seems filing back taxes can be simple most of the time, but one small computer error can create a fiasco of work.
A report released Wednesday has revealed that nearly seven hundred IRS employees (about five percent of the ninety-thousand Internal Revenue Service contracted workers) owe a combined $5.4 million in back taxes.
The report says that it is the responsibility of the IRS to make sure contractors are current and do not need to file back taxes. Incidentally, most of these workers are not enrolled in payment plans, despite the fact that this should make them ineligible for employment by the IRS.
The IRS is the only federal agency that requires its employees, including contractors, to comply with federal tax statutes, which means they must file on time and enroll in a payment plan if they are not completely paid up.
The report did say that the IRS is thorough in checking for compliance with new hires, but needs to improve on its monitoring of its workers’ adherence to federal tax laws throughout their employment.
As of June 2012, six-hundred and ninety-one IRS contract workers owed taxes that were not paid when due; three-hundred and fifty-two of them were not enrolled in a payment plan. This brings the delinquency rate to two point six percent. In 2011, by contrast, the average delinquency rate for all federal workers, including retirees, was at three point two percent. At the time, the Treasury Department reported the lowest rate, at one point one percent.
The IRS has stated that it will begin reviewing cases of delinquent taxes, as well as to take additional action “as necessary,” although what this means is still up in the air.