Tax News
IRS Data from 2008
Who Pays Income Taxes Anyway?
The top 25% of all taxpayers paid 86.34% of all income taxes in 2008
(to be in top 25% your 2008 adjusted gross income exceeded $67,280)
The top 10% of all taxpayers paid 69.94% of all income taxes
(what put you in the oft-mentioned top 10% of US earners? $113,799)
The top 5% of all taxpayers paid 58.72% of all income taxes
(top 5% means the rich right? Well, $159,619 put you in such rarified
air)
The top 1% of all taxpayers paid 38.02% of all income taxes
(the top 1% reported $380,354+, not chump change by any means)
Taxpayers earning under $67,280 in 2008 (that's 75% of all taxpayers)
paid 13.66% of all income taxes, and those earning under $33,048 paid
just 2.59%
Okay, how about the truly rich, the top 0.1% of all taxpayers? Well, their 140,000 tax returns reported nearly 10% of all adjusted gross income earned in the country, with an average income of $6 million. They paid 18.5% of all income taxes, with an effective tax rate of 22%.
So, who pays the fairest share?
Important 2012 Dates
Monday January 16: 4th quarter estimated tax payment for 2011 due.
Wednesday February 1: W2s and 1099s due to employees/contractors.
Thursday March 15: Calendar year corporation returns due.
Monday April 17: Individual and partnership tax returns due.
Monday April 17: 2011 1st quarter estimated taxes due.
Friday June 15: 2011 2nd quarter estimated taxes due.
Monday September 17: 2011 3rd quarter estimated taxes due
Monday October 15: Individual returns on extension due.
Tuesday January 15 2013: 4th quarter estimated taxes for 2012 due.
Capitol Hill Scofflaws
According to a new report, government workers on the Hill owe $9.3 million in unpaid taxes. That's hardly a drop in the bucket of the estimated $1 billion in upaid taxes owed by Federal workers nationwide, itself a fraction of the $103 billion owed by all taxpayers ... but it does rankle. The average unpaid tax bill is $12,787 among the Senate's delinquent taxpayers and $15,498 among those working in the House. The redacted report gives no names but details such as how three employees at the Office of Government Ethics owe a combined $75,000 and 41 employees at the Executive Office of the President owe $831,000 are a beltway PR bugaboo. To address the issue, 8 House republicans, declaring Federal workers should be held to the highest standard in this regard, drafted legislation to suspend and/or fire federal employees owing back taxes and not in a repayment plan; no democrats signed on. In the interest of bipartisanship, these numbers were about the same during the Bush administration.
Who's Preparing Your Taxes?
The IRS and Congress have begun implementing their return preparer oversight program. Most people did not realize that until the new regulations were approved, 47 states had no oversight, no minimum or continuing education standards, no proof of competency for anyone charging to prepare tax returns (the "paid preparer"). Douglas, who cuts my hair, had to do more to be licensed than most tax preparers, and his mistakes grow back! This year all tax preparers were required to register with the IRS, obtain a unique preparer identification number, and will need to pass a basic competency examination. This is good news since nearly 60% of all taxpayer returns are completed by a "paid preparer". Of course, for those of you who have engaged the services of an enrolled agent, this has never been an issue. EAs have already passed an extremely comprehensive three part examination on the tax code and regulations, ethics, tax calculations and application for individuals, businesses and any other entity with a filing requirement. Furthermore, we must complete no less than 72 hours of ongoing education every three years (90 hours for NAEA/CSEA members).
Fighting An IRS Audit: You're On The Clock
There's nothing worse than seeing a letter in the mail box from the IRS. Actually there is something worse -- doing nothing. One very important thing you should be aware of: When the IRS sends out a notice to you, the clock is ticking. Failure to respond escalates matters and, eventually, it's like not showing up in court ... BAM! Guilty! You have rights to dispute IRS claims, but they must be used within very specific timeframes. Here's a LINK to a great article discussing the IRS timeline for its notices and collections processes. Remember: Anything from the IRS in the mailbox means call your enrolled agent today.