Be Prepared For Your Taxes

There are many factors that can devalue your return during tax filing.  A bit of preparation each month can saves hours of work later on. This can also net you extra money on your return, which is always a good thing.
There are several ways to prepare for your taxes a little at a time.  Here we will discuss a few methods that will save you time when taxes roll around, or save you money if you are paying an accountant by the hour to prepare your taxes for you.

Save Your Receipts

Whether you are a business owner or simply buy supplies for your job out of your own income, you need to remember to save and file your receipts for any purchases made in relation to your work.  While most think of this when purchasing a new printer, laptop, or copier, they often forget the smaller purchases.  Other possible deductible purchases include:
•             Boxes of pens, pencils, highlighters, and other minor office supplies
•             Reams of paper and ink cartridges for printers and copy machines
•             Fuel used in travelling to purchase supplies

Stay Organized

There is nothing more frustrating and time consuming than a large box of random papers being dropped on your desk at tax time.  Save your accountant time and yourself money by properly filing these papers, receipts, and pay stubs for easier access during tax form preparation.  By doing this you will make a good impression as well as learn how to systematically reduce the stress that tax filing brings.

Communication is Key

During the year, if you have any doubts as to whether an activity will be important to your taxes, do your research and communicate with your tax professional.  This simple act can also protect you from possible auditing as your tax preparer will be able to notify you if an activity is going to bring up red flags later.
It is also important to communicate with your accountantabout any changes in your life or business. Common events that can affect your tax filing include:
•             Marriage, divorce, and separation
•             Custody changes
•             Insurance rate changes
•             Vehicle maintenance related to work

Plan Ahead

In the event that an audit takes place, you will need your records for several years prior to the year of audit.  In order to avoid excess stress and hassle, keep all tax records filed in an easily accessible place for at least ten years, more if you prefer.  The space taken by one four-drawer filing cabinet can save you from a very nasty auditing experience.

Some regularly saved records include:
•             Previous tax records
•             Purchase/Sale records for livestock in farm related industries
•             Banking records for all bank accounts
•             Receipts or proof-of-purchase for all vehicles
•             Maintenance records for all vehicles
•             Year-end paystubs for at least five years

Summation

By following these simple steps you will take a large bite out of the stress, time, and expense of tax preparation, as well as keeping secure and reliable resources handy in case of audit.  This system will also allow you more broad range of possibilities where your deductions are concerned, offering you a larger return at the end of each fiscal year.

Author’s Bio: Val Anne is an in-house writer from Franklin Debt Relief, a company specializing in programs for people with high credit card debt.

What The Increase In Tax Rates Mean For The Economy

The Stock Market is threatened by Changes in the U.S. Tax Code

The stock market is expected to take a beating if tax rates on capital gains are increased by two thirds. There has been a lot of debate as to whether or not the economy will benefit or suffer because of these changes.

Apart from capital gains taxes, income taxes are also expected to increase. These changes will cause a lot of problems in the future unless the President and Congress agree on contentious issues. These two parties must agree before the year ends.

Investors in the stock market will have to protect their investments just in case taxes are increased. Many of them will have to sell before the new laws come into force. This is because an increase from 15 percent to 25 percent means that investors who will sell next year will lose 10 percent of their profits. For instance, those who plan to sell this year and get $100,000 in profits will pay $15,000 in 2012 taxes. If the same people liquidated their assets next year, they will have to pay $25,000 in 2013 taxes. The difference is quite significant, and many people will decide to liquidate their assets this year.

If a solution is not found before the election, the stock market might just experience the biggest sell-off in history as people rush to liquidate their paper assets before the next tax year.

People often consider many factors, including tax rates, when making investment decisions. This means that investors will consider what they will pay in 2012 taxes before they invest in anything.

We’re No. 1: In The Collection Of The Highest Corporate Taxes

Beginning this Sunday, the United States will gain bragging rights in the economic war with Japan and China:  It will have the largest jobs-killing corporate tax rate in all of the industrialized world.

This is no April Fool’s joke.  Once Japan officially drops its tax rate to 36.8% this Sunday, the USA’s will be at the top of the chart at 39.2%.

While the President has suggested a new 28% rate, Republicans claim that the reduction also would bring $350 billion in new taxes to offset losses.  In response, the GOP is suggesting a reduction to 25%; however, the upcoming election seems to be preventing any compromise.

Any business groups are asking that the government make a cut in the rate for corporate taxes, believing the reduction would improve the growth of jobs and encourage reinvestment in industry.  These groups cite moves in the UK to loser taxes by 6% from the former rate of 28% in a move to increase jobs and investment in Britain.

Tia Freeman of the Roundtable groups claims comprehensive tax reform to be imperative for the United States if the country is to remain an economic leader in the world.

Chair of the Senate Republican Policy committee, John Barrasso, R-Wyo. is also pressing for tax rate action.  Barrasso claims that Russia and China with 20% and 25% tax rates respectively have lower rates than the US.  This higher tax rate puts American companies at a disadvantage in the world market.

Tax Adjustments Now For The Taxes Are A Changing

April 15th, this is the date that all Americans associate with the IRS. For many it is a stressful situation to try and figure out what exactly needs to go on their return. This is where a Certified Public Accountant or other tax professionals can help by pointing out useful tax adjustments now for next year’s return.

The regulations and codes for taxes are constantly changing and that is truer for this year because the Bush tax cuts are set to expire December 31. These cuts are projected to change how deductions can be made for retirement plans like the traditional IRA and Roth IRAs. Contributing more to a 401k through work can also be a good way to lower the taxable income one acquires within a fiscal year.

For the more affluent individuals it might make sense to roll over any traditional IRAs they own into Roth IRAs if they are projecting that their income after the age of 59 and half will be higher than it currently is. This would allow them to draw the payments from the Roth IRA as non-taxable income when they retire because they have already paid the taxes on the interest returns from those accounts.

Again, it is imperative to talk to tax professionals in order to gain the advice needed to plan for the changes coming in the next year. Seeking the advice of the benefits office within one’s company can help and is where the necessary adjustments need to be requested for changes in the 401k and the withholding forms. Also, the customer service representatives of the financial institutions that the retirement portfolios are being managed can also offer some guidance to tax adjustments now.

Governor Kasich Wants To Tax Oil Drillers More

Higher Taxes and Tougher Regulations for Oil Drillers – Governor Kasich

John Kasich, Ohio Governor is proposing changes in the way Ohio taxes and regulates oil and gas drilling companies. He wants a comprehensive energy strategy in the country starting with his home state.

Some of the proposed changes, which require approval from the legislature, include disclosure of chemicals used in fracking, higher tax rates for drillers, higher standards for sinking of wells, and new rules on gas gathering lines.

These proposals were released as part of a Mid Biennium Review. The governor also said that he wants a balance between policies that create new investments and jobs and those that protect the environment.

Kasich believes that Ohio can create policies that can be adopted throughout the country.

States like North Dakota, Pennsylvania and Ohio have been forced to review their policies regarding fracking, or hydraulic fracturing. While industry experts say that the method is safe, residents of these states have complained of contamination in their water sources.
Showing the Money

According to the governor’s office, drillers will be required to pay a severance tax of 4 percent, while income tax rates for small businesses and individuals will go down.  If enacted into law, the proposals will allow the local government to collect 25,000 dollars for each well. This upfront fee will be used to cover the effects of drilling.

Oil and gas companies like Chesapeake Energy Corporation (CHK), Exxon Mobil Corp and Devon Energy Corp have already started sinking wells in Ohio’s Utica Shale which is estimated to have 15.7 trillion cubic ft of natural gas and five and half billion barrels of crude oil.

Maryland Senate Votes To Tax The Rich

Maryland state senate has voted in a new tax and people are unhappy about it. Not too long ago the state senate in a majority vote decided to introduce a so called millionaire’s tax that would make people who earn more than half a million dollars pay more in taxes.
The collective thought of the senate is split at the moment, many think this is the right thing to pursue and others think that this is no fair to the people and that everyone should be taxed equally.
This tax vote came as the State Senate approved its version of the budget. This new measure moves next to the House of Delegates, which has flagged an openness to approaching the rich and asking them to pay more – but not really using the same outline favored by the Senate committee.
This proposed idea reflects a nationwide debate that has pitted the president against the congressional right leaning republicans in a tense standoff over the best way to lower the federal deficit. This also sparked an identically heated discussion in the Maryland State Senate. This idea also revives a higher tax bracket in Maryland that has in the past led to years of concern as to whether or not it would drive high earners out of the state before it expired two years ago.
The Maryland State Senate’s budget includes around half a billion dollars in spending cuts, moves the approximate quarter billion dollars in teachers’ pension costs to the counties for around five years, and then gives the state authority to seize the local income tax collections if counties don’t appropriately fund their education system.
The entire ‘Tax the rich’ vote sounds like a modern day  Robin Hood act.