U.S. income tax rate from 1913 to present:
http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=543
Social Security wage ceiling and rate from 1937 to present:
http://www.socialsecurity.gov/OACT/COLA/cbb.html
Tuesday, January 25, 2011
Monday, January 24, 2011
IRS Launches the IRS2Go App for iPhone, Android; Taxpayers Can Check Refunds, Get Tax Information
http://www.irs.gov/newsroom/article/0,,id=234882,00.html
Video: IRS2Go: English
IR-2011-8, Jan. 24, 2011
WASHINGTON — The Internal Revenue Service today unveiled IRS2Go, its first smartphone application that lets taxpayers check on their status of their tax refund and obtain helpful tax information.
"This new smart phone app reflects our commitment to modernizing the agency and engaging taxpayers where they want when they want it," said IRS Commissioner Doug Shulman. "As technology evolves and younger taxpayers get their information in new ways, we will keep innovating to make it easy for all taxpayers to access helpful information."
The IRS2Go phone app gives people a convenient way of checking on their federal refund. It also gives people a quick way of obtaining easy-to-understand tax tips.
Apple users can download the free IRS2Go application by visiting the Apple App Store. Android users can visit the Android Marketplace to download the free IRS2Go app.
"This phone app is a first step for us," Shulman said. "We will look for additional ways to expand and refine our use of smartphones and other new technologies to help meet the needs of taxpayers."
The mobile app, among a handful in the federal government, offers a number of safe and secure ways to help taxpayers. Features of the first release of the IRS2Go app include:
Get Your Refund Status
Taxpayers can check the status of their federal refund through the new phone app with a few basic pieces of information. First, taxpayers enter a Social Security number, which is masked and encrypted for security purposes. Next, taxpayers pick the filing status they used on their tax return. Finally, taxpayers enter the amount of the refund they expect from their 2010 tax return.
For people who e-file, the refund function of the phone app will work within about 72 hours after taxpayers receive an e-mail acknowledgement saying the IRS received their tax return.
For people filing paper tax returns, longer processing times mean they will need to wait three to four weeks before they can check their refund status.
About 70 percent of the 142 million individual tax returns were filed electronically last year.
Get Tax Updates
Phone app users enter their e-mail address to automatically get daily tax tips. Tax Tips are simple, straightforward tips and reminders to help with tax planning and preparation. Tax Tips are issued daily during the tax filing season and periodically during the rest of the year. The plain English updates cover topics such as free tax help, child tax credits, the Earned Income Tax Credit, education credits and other topics.
Follow the IRS
Taxpayers can sign up to follow the IRS Twitter news feed, @IRSnews. IRSnews provides the latest federal tax news and information for taxpayers. The IRSnews tweets provide easy-to-use information, including tax law changes and important IRS programs.
IRS2Go is the latest IRS effort to provide information to taxpayers beyond traditional channels. The IRS also uses tools such as YouTube and Twitter to share the latest information on tax changes, initiatives, products and services through social media channels. For more information on IRS2Go and other new media products, visit www.IRS.gov.
Related Item: IRS Goes Mobile With IRS2Go
Video: IRS2Go: English
IR-2011-8, Jan. 24, 2011
WASHINGTON — The Internal Revenue Service today unveiled IRS2Go, its first smartphone application that lets taxpayers check on their status of their tax refund and obtain helpful tax information.
"This new smart phone app reflects our commitment to modernizing the agency and engaging taxpayers where they want when they want it," said IRS Commissioner Doug Shulman. "As technology evolves and younger taxpayers get their information in new ways, we will keep innovating to make it easy for all taxpayers to access helpful information."
The IRS2Go phone app gives people a convenient way of checking on their federal refund. It also gives people a quick way of obtaining easy-to-understand tax tips.
Apple users can download the free IRS2Go application by visiting the Apple App Store. Android users can visit the Android Marketplace to download the free IRS2Go app.
"This phone app is a first step for us," Shulman said. "We will look for additional ways to expand and refine our use of smartphones and other new technologies to help meet the needs of taxpayers."
The mobile app, among a handful in the federal government, offers a number of safe and secure ways to help taxpayers. Features of the first release of the IRS2Go app include:
Get Your Refund Status
Taxpayers can check the status of their federal refund through the new phone app with a few basic pieces of information. First, taxpayers enter a Social Security number, which is masked and encrypted for security purposes. Next, taxpayers pick the filing status they used on their tax return. Finally, taxpayers enter the amount of the refund they expect from their 2010 tax return.
For people who e-file, the refund function of the phone app will work within about 72 hours after taxpayers receive an e-mail acknowledgement saying the IRS received their tax return.
For people filing paper tax returns, longer processing times mean they will need to wait three to four weeks before they can check their refund status.
About 70 percent of the 142 million individual tax returns were filed electronically last year.
Get Tax Updates
Phone app users enter their e-mail address to automatically get daily tax tips. Tax Tips are simple, straightforward tips and reminders to help with tax planning and preparation. Tax Tips are issued daily during the tax filing season and periodically during the rest of the year. The plain English updates cover topics such as free tax help, child tax credits, the Earned Income Tax Credit, education credits and other topics.
Follow the IRS
Taxpayers can sign up to follow the IRS Twitter news feed, @IRSnews. IRSnews provides the latest federal tax news and information for taxpayers. The IRSnews tweets provide easy-to-use information, including tax law changes and important IRS programs.
IRS2Go is the latest IRS effort to provide information to taxpayers beyond traditional channels. The IRS also uses tools such as YouTube and Twitter to share the latest information on tax changes, initiatives, products and services through social media channels. For more information on IRS2Go and other new media products, visit www.IRS.gov.
Related Item: IRS Goes Mobile With IRS2Go
What's New on the 2010 Form 1040
http://finance.yahoo.com/taxes/article/111872/whats-new-on-1040-in-2010
by Bill Bischoff
Monday, January 24, 2011
By now, some of you may already have your 2010 W-2 and 1099s in hand. If not, it won't be long. So it's not too soon to think about starting your 2010 Form 1040. Before you begin, there are some key changes to note. Here's what you need to know.
Due Date is April 18
Even though April 15 falls on a Friday this year, the deadline for your 2010 Form 1040 is Monday April 18. Reason: Emancipation Day is a District of Columbia holiday, and it falls on April 15. So the tax filing deadline for the whole nation is deferred to April 18 . If your return won't be ready by then, you can extend the deadline all the way out to October 17 by filing Form 4868 on or before April 18.
No More Phase-Outs for Itemized Deductions and Exemptions
For years, high-income folks have seen their write-offs for the most popular itemized deduction items (including mortgage interest, state and local income and property taxes, and charitable donations) reduced by a nasty phase-out rule. Another nasty phase-out rule reduced or eliminated personal and dependent exemption deductions. Thankfully, both phase-outs were completely repealed for 2010 as part of the Bush-era tax cuts. So you can write off the full amount of your itemized deductions and exemptions on your 2010 Form 1040 without any worries and without having to fill out phase-out worksheets to penalize yourself. More good news: the recent tax cut extension legislation repealed the phase-outs for 2011 and 2012 as well.
Liberalized Adoption Credit
For 2010, the maximum adoption credit was increased to $13,170 (up from $12,150 in 2009). In addition, the credit was made 100% refundable for the 2010 tax year (previously, it was nonrefundable). That means you'll receive a check for any leftover adoption credit after your federal income tax bill has been reduced to zero. To claim the credit, fill out Form 8839 (Qualified Adoption Expenses), and enter the credit on line 71 of Form 1040.
One-Time Break for Self-Employed Individuals
Self-employed folks can generally deduct their health insurance premiums on page 1 of Form 1040 (use line 29 for 2010). The deduction reduces their federal income tax bills, which is nice. However, the self-employed have never been allowed to deduct those premiums when calculating their self-employment tax bills on Schedule SE. Good news: for 2010 only, you can deduct health insurance premiums on line 3 of Schedule SE. So those premiums will reduce both your income tax bill and your SE tax bill. Unfortunately, this break will not be available for 2011 and beyond unless Congress extends it.
Homebuyer Credit Repayment Rules Kick In
As I explained in an earlier column, you may have to repay part or all of the credit claimed for a 2008 or 2009 home purchase with your 2010 Form 1040.
In most cases, however, only those who purchased homes in 2008 will be affected. They will generally have to repay 1/15 of the credit with the 2010 Form 1040. If this rule impacts you, fill out Form 5405 (First-Time Homebuyer Credit and Repayment of the Credit), and enter the repayment amount as an addition to your tax bill on line 59 of Form 1040.
Real Estate Tax Deduction for Non-Itemizers is Gone
For 2008 and 2009, unmarried individuals who did not itemize could write off up to $500 of state and local real property taxes by claiming an increased standard deduction. Married joint-filing couples could write off up to $1,000. This add-on standard deduction deal for real estate taxes expired at the end of 2009, and it was not reinstated for 2010.
Deductions for Sales Taxes on New Vehicle Purchases Are Gone
The 2009 Stimulus Act created a temporary write-off for non-itemizers who paid state and local sales taxes on new vehicles purchased between 2/17/09 and 12/31/09. The write-off came in the form of an additional standard deduction allowance. Similarly, itemizers were allowed to claim an extra itemized deduction for such taxes. Both breaks lapsed at the end of 2009, and they were not reinstated for 2010.
Break for Unemployment Benefits Is Gone
In 2009, the first $2,400 of unemployment benefits was federal-income-tax-free. This break was not continued for 2010. Therefore, 100% of 2010 unemployment benefits generally must be reported as income on Form 1040 (use line 19).
Your Tax Preparer Might E-File Your Return This Time
Over the last few years, Congress has made tax-law changes that place increasing pressure on professional return preparers to electronically file more and more returns. As a result, your preparer might be forced to e-file your 2010 Form 1040 even if your returns for earlier years have always been done on paper. Get used to it.
by Bill Bischoff
Monday, January 24, 2011
By now, some of you may already have your 2010 W-2 and 1099s in hand. If not, it won't be long. So it's not too soon to think about starting your 2010 Form 1040. Before you begin, there are some key changes to note. Here's what you need to know.
Due Date is April 18
Even though April 15 falls on a Friday this year, the deadline for your 2010 Form 1040 is Monday April 18. Reason: Emancipation Day is a District of Columbia holiday, and it falls on April 15. So the tax filing deadline for the whole nation is deferred to April 18 . If your return won't be ready by then, you can extend the deadline all the way out to October 17 by filing Form 4868 on or before April 18.
No More Phase-Outs for Itemized Deductions and Exemptions
For years, high-income folks have seen their write-offs for the most popular itemized deduction items (including mortgage interest, state and local income and property taxes, and charitable donations) reduced by a nasty phase-out rule. Another nasty phase-out rule reduced or eliminated personal and dependent exemption deductions. Thankfully, both phase-outs were completely repealed for 2010 as part of the Bush-era tax cuts. So you can write off the full amount of your itemized deductions and exemptions on your 2010 Form 1040 without any worries and without having to fill out phase-out worksheets to penalize yourself. More good news: the recent tax cut extension legislation repealed the phase-outs for 2011 and 2012 as well.
Liberalized Adoption Credit
For 2010, the maximum adoption credit was increased to $13,170 (up from $12,150 in 2009). In addition, the credit was made 100% refundable for the 2010 tax year (previously, it was nonrefundable). That means you'll receive a check for any leftover adoption credit after your federal income tax bill has been reduced to zero. To claim the credit, fill out Form 8839 (Qualified Adoption Expenses), and enter the credit on line 71 of Form 1040.
One-Time Break for Self-Employed Individuals
Self-employed folks can generally deduct their health insurance premiums on page 1 of Form 1040 (use line 29 for 2010). The deduction reduces their federal income tax bills, which is nice. However, the self-employed have never been allowed to deduct those premiums when calculating their self-employment tax bills on Schedule SE. Good news: for 2010 only, you can deduct health insurance premiums on line 3 of Schedule SE. So those premiums will reduce both your income tax bill and your SE tax bill. Unfortunately, this break will not be available for 2011 and beyond unless Congress extends it.
Homebuyer Credit Repayment Rules Kick In
As I explained in an earlier column, you may have to repay part or all of the credit claimed for a 2008 or 2009 home purchase with your 2010 Form 1040.
In most cases, however, only those who purchased homes in 2008 will be affected. They will generally have to repay 1/15 of the credit with the 2010 Form 1040. If this rule impacts you, fill out Form 5405 (First-Time Homebuyer Credit and Repayment of the Credit), and enter the repayment amount as an addition to your tax bill on line 59 of Form 1040.
Real Estate Tax Deduction for Non-Itemizers is Gone
For 2008 and 2009, unmarried individuals who did not itemize could write off up to $500 of state and local real property taxes by claiming an increased standard deduction. Married joint-filing couples could write off up to $1,000. This add-on standard deduction deal for real estate taxes expired at the end of 2009, and it was not reinstated for 2010.
Deductions for Sales Taxes on New Vehicle Purchases Are Gone
The 2009 Stimulus Act created a temporary write-off for non-itemizers who paid state and local sales taxes on new vehicles purchased between 2/17/09 and 12/31/09. The write-off came in the form of an additional standard deduction allowance. Similarly, itemizers were allowed to claim an extra itemized deduction for such taxes. Both breaks lapsed at the end of 2009, and they were not reinstated for 2010.
Break for Unemployment Benefits Is Gone
In 2009, the first $2,400 of unemployment benefits was federal-income-tax-free. This break was not continued for 2010. Therefore, 100% of 2010 unemployment benefits generally must be reported as income on Form 1040 (use line 19).
Your Tax Preparer Might E-File Your Return This Time
Over the last few years, Congress has made tax-law changes that place increasing pressure on professional return preparers to electronically file more and more returns. As a result, your preparer might be forced to e-file your 2010 Form 1040 even if your returns for earlier years have always been done on paper. Get used to it.
Thursday, January 20, 2011
IRS will start processing tax returns under the GOP-Obama tax deal on Feb 14
The IRS has announced that February 14 will be the start date for taxpayers who file returns claiming itemized deductions on Schedule A, the higher education tuition and fees deduction on Form 8917, or the educator expenses deduction. (IR-2011-7) The IRS had earlier announced that due to changes made by the 2010 Tax Relief Act, those taxpayers would not be able to file until “mid- to late February.” (IR-2010-126)
The late start date affects both e-filed and paper returns. For returns not containing any of those items, e-file was open for business on January 14. (IR-2011-4)
Taxpayers may file their California returns now, provided the federal return has been completed. The state has not delayed filing for the above-mentioned taxpayers. But from a practical point of view, affected taxpayers should probably wait to file their tax returns.
Monday, January 3, 2011
Franchise Tax Board Opens Filing Season for State Taxes
01.03.2011
Sacramento - The Franchise Tax Board (FTB) today announced it is now accepting 2010 state tax returns. Also, FTB provides the following updates on law changes and filing services.
"FTB's website offers free tax filing services, help with account matters, and information about the federal Earned Income Tax Credit that can put thousands of dollars in families' wallets," said State Controller and FTB Chair John Chiang.
Final filing date is Monday, April 18 -- Since Friday, April 15, is a legal holiday in Washington DC (Emancipation Day), the IRS has announced that taxpayers nationwide have until the following business day, Monday, April 18, to timely file returns and pay taxes. California will accept as timely, tax returns and payments received on April 18.
Tax booklets no longer mass mailed - FTB no longer mass mails tax booklets to taxpayers. Tax booklets, which contain tax forms and instructions, are available online at ftb.ca.gov. FTB's website offers many e-file options, including FTB's free CalFile and ReadyReturn services, as well as free and fee-based services offered by private companies. Many post offices and libraries also stock tax booklets. Taxpayers who are unable to obtain a tax booklet can call FTB at 800.338.0505 to request one.
Form 540 2EZ now available in Spanish-FTB's "short form" is now avaible in both English and Spanish. The 2EZ is designed for taxpayers whose income is mostly from wages, take the standard deduction, have up to three dependents, and have no adjustments to income.
Standard deduction - The standard deduction for single or filing separately tax statuses increased from $3,637 to $3,670. For joint, surviving spouse, or head of household filers, it increased from $7,274 to $7,340.
Personal exemption credit - The personal exemption amount for single, filing separately, and head of household filers increased from $98 to $99. For joint or surviving spouses, it increased from $196 to $198. The dependent exemption credit is also $99 per dependent.
New Jobs tax credit still available - Starting in 2009, this incentive provides a tax credit of up to $3,000 for each added qualified full-time employee hired by a qualified small business employer. Funding is limited to $400 million. As of January 1, $360 million remains available. The credit must be claimed on a timely-filed original (not amended) 2010 return received before the $400 million limit is exhausted.
Generally speaking, employers qualify for the credit if they employed 20 or fewer employees in the prior year. They have a net increase in qualified full-time employees in 2010 compared to the number of full-time employees employed in the prior year.
Net operating losses suspended - For 2010 and 2011, net operating losses from prior years cannot be deducted by certain taxpayers. The net operating loss suspension rules do not apply to taxpayers with net income of less than $300,000 or with disaster loss carryovers.
Voluntary Contribution Funds - Taxpayers can contribute to one or more charitable causes directly from the state tax form. New on the 2010 tax return are the:
Free Do-it-Yourself Services -- FTB encourages taxpayers and practitioners to explore its many self-service applications available through FTB's website:
Sacramento - The Franchise Tax Board (FTB) today announced it is now accepting 2010 state tax returns. Also, FTB provides the following updates on law changes and filing services.
"FTB's website offers free tax filing services, help with account matters, and information about the federal Earned Income Tax Credit that can put thousands of dollars in families' wallets," said State Controller and FTB Chair John Chiang.
Final filing date is Monday, April 18 -- Since Friday, April 15, is a legal holiday in Washington DC (Emancipation Day), the IRS has announced that taxpayers nationwide have until the following business day, Monday, April 18, to timely file returns and pay taxes. California will accept as timely, tax returns and payments received on April 18.
Tax booklets no longer mass mailed - FTB no longer mass mails tax booklets to taxpayers. Tax booklets, which contain tax forms and instructions, are available online at ftb.ca.gov. FTB's website offers many e-file options, including FTB's free CalFile and ReadyReturn services, as well as free and fee-based services offered by private companies. Many post offices and libraries also stock tax booklets. Taxpayers who are unable to obtain a tax booklet can call FTB at 800.338.0505 to request one.
Form 540 2EZ now available in Spanish-FTB's "short form" is now avaible in both English and Spanish. The 2EZ is designed for taxpayers whose income is mostly from wages, take the standard deduction, have up to three dependents, and have no adjustments to income.
Standard deduction - The standard deduction for single or filing separately tax statuses increased from $3,637 to $3,670. For joint, surviving spouse, or head of household filers, it increased from $7,274 to $7,340.
Personal exemption credit - The personal exemption amount for single, filing separately, and head of household filers increased from $98 to $99. For joint or surviving spouses, it increased from $196 to $198. The dependent exemption credit is also $99 per dependent.
New Jobs tax credit still available - Starting in 2009, this incentive provides a tax credit of up to $3,000 for each added qualified full-time employee hired by a qualified small business employer. Funding is limited to $400 million. As of January 1, $360 million remains available. The credit must be claimed on a timely-filed original (not amended) 2010 return received before the $400 million limit is exhausted.
Generally speaking, employers qualify for the credit if they employed 20 or fewer employees in the prior year. They have a net increase in qualified full-time employees in 2010 compared to the number of full-time employees employed in the prior year.
Net operating losses suspended - For 2010 and 2011, net operating losses from prior years cannot be deducted by certain taxpayers. The net operating loss suspension rules do not apply to taxpayers with net income of less than $300,000 or with disaster loss carryovers.
Voluntary Contribution Funds - Taxpayers can contribute to one or more charitable causes directly from the state tax form. New on the 2010 tax return are the:
- Arts Council Fund.
- California Police Activities League (CALPAL) Fund.
- California Veterans Homes Fund.
- Safely Surrendered Baby Fund.
Free Do-it-Yourself Services -- FTB encourages taxpayers and practitioners to explore its many self-service applications available through FTB's website:
- ReadyReturn - Taxpayers who file the simplest returns may qualify for FTB's online ReadyReturn program. FTB uses information it already has to complete a tax return for the taxpayer. The taxpayer just needs to review the return, make any needed changes, and click a button to send it directly to FTB. More than 2 milliontaxpayers will qualify who last year: (1) Earned wages from a single employer. (2) Filed either as single or head of household. (3) Took the standard deduction. (4) Claimed no more than five dependents. (5) Taxpayers who are renters and who can be claimed as a dependent are also eligible.
- CalFile -More than 6.4 million taxpayers are qualified to use CalFile, FTB's no-cost, direct-to-FTB, online filing program. Taxpayers enter their tax information on FTB's secure website and transmit their return directly to FTB. CalFileaccepts taxpayers with income of up to $324,376, itemized deductions, and some tax credits.
- Access Your Account -This online service allows taxpayers to change their address or phone number and get information such as estimated tax payments, any balances due, state W-2 information, or FTB-issued 1099 forms. Taxpayers and tax professionals complete a one-time registration process where they choose their own user name and password. This service eliminates the need for taxpayers to get a customer service number each year.
- Check Your Refund Status -After filing the 2010 tax return, taxpayers can use this service to see where their refund is. e-filed returns claiming refunds and opting for direct deposit are generally issued within seven days and mailed refund checks are generally sent within two weeks. Paper-filed returns take longer, up to six to eight weeks depending on the time of year the return is filed. This service is also available in Spanish.
- Pay Taxes Online - FTB's Web Pay allows taxpayers to authorize a payment from their bank account to pay their return balance due or extension payment. Payment must be made on or before April 18, to avoid penalties and interest. Taxpayers can also make estimated tax or any bill payments online, and sign up for email reminders of upcoming estimate payment due dates. Taxpayers can schedule payments up to one year in advance. For a fee, taxpayers can pay their taxes with their American Express, Discover/NOVUS, MasterCard, and Visa cards.
- Request a Monthly Payment Plan - FTB offers monthly installment payment plans to people who cannot pay what they owe on time. Taxpayers who owe less than $25,000 and can repay the tax within five years generally qualify. Sign up online at ftb.ca.gov and select installment agreement request.
- Get Answers to Frequently Asked Questions - Find answers to questions about various tax topics such as return filing requirements, tax credits, and the requirements to be able to use the Head of Household filing status online at ftb.ca.gov.
- Phone service - FTB provides automated toll-free phone service at 800.338.0505. To speak with a customer service representative, FTB staffs its general toll-free phone line, 800.852.5711, from 7 a.m. to 5 p.m., weekdays excluding state holidays.
- Field Offices- FTB has six regional field offices that provide walk-in service from 8 a.m. to 5 p.m., weekdays in Los Angeles, Oakland, Sacramento, San Diego, San Francisco, and Santa Ana. For directions, visit ftb.ca.gov and click on the Contact Us tab.
- Voluntary Income Tax Assistance - Starting February 1, more than 1,000 centers statewide open through the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs. These sites offer free help with tax form preparation.Some offer services in Spanish, Chinese, Vietnamese, and Korean. For information on locations throughout California, visit ftb.ca.gov and click on the free filing assistance link.
- Federal Earned Income Tax Credit- This is a federal incentive for low-income individuals and families. Taxpayers earning less than $48,362 can qualify for a "refundable" credit that can total up to $5,666. "Refundable" means that you do not have to have a tax liability to get a refund check from the government. If you think you might qualify, visit the IRS website at irs.govand search for EITC Assistant. California has no comparable state credit.
- FTB using Social Media - FTB is using Twitter, Facebook, and YouTube to share information regarding the coming state income tax filing season. Three instructional YouTube videos highlight the ease of using CalFile, ReadyReturn, and FTB's recently updated Access Your Account feature. "California Tax Tips" offer tips about taxes in videos of 60 seconds or less.
- Recordkeeping - Keep a copy of your state tax returns and all supporting records. FTB may request information from you regarding your tax return at any time within the California statute of limitations period, which is generally four years from the return's due date.
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