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Posted
Sep 08 2009, 08:28 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This post comes from J.D. Roth at partner blog Get Rich Slowly.
Note: Although I try to keep GRS a politics-free zone, today's topic is inherently political. I've stayed as neutral as possible in the article, but I know that there'll be some political discussion in the comments. Please keep conversation civil, as always.
Because I was frustrated with my own ignorance about the U.S. federal budget and our tax system, I recently spent 12 hours researching a variety of tax topics. From my research came two articles: my recent short guide to the federal budget and today's post, which answers some of my personal questions about taxes.
In the earlier post, we tried to take a few small steps toward understanding the federal budget. We looked at where the U.S. government spends its money. But where does it actually find the cash to spend?
Of the $2.333 trillion in U.S. government receipts:
- $1050 billion (45.0%) comes from individual income taxes.
- $939 billion (40.2%) comes from social insurance/retirement receipts.
- $221 billion (9.5%) comes from corporate income taxes.
- $76 billion (3.3%) comes from excise taxes.
- $20 billion (0.9%) comes from estate and gift taxes.
- $28 billion (1.2%) comes from Federal Reserve deposits.
- $16 billion (0.7%) comes from other miscellaneous sources.
As you can see, nearly half of government receipts come from individual income taxes. Naturally, taxes are a hot-button issue. They have been since this nation was founded. (To be fair, though, the driving force then was "taxation without representation." Modern complaints are against taxes in principle, I think.)
During my research, several questions about taxes occurred to me. In today's article, I'll do my best to share the answers I found.
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Posted
Apr 23 2009, 03:05 PM
by
Karen Datko
Money Blog: Smart Spending Blog - MSN Money
"Mr. ToughMoneyLove" says the IRS rewards whistleblowers who can provide the IRS with solid information about other people's tax fraud.
In other words, don't call the IRS if you just have a hunch. The IRS Web site says:
The IRS is looking for solid information, not an "educated guess" or unsupported speculation. We are also looking for a significant Federal tax issue -- this is not a program for resolving personal problems or disputes about a business relationship.
Would you feel right doing this? Mr. ToughMoneyLove seems to love the idea. (We can hear his malevolent gleeful snicker.) "Do you know of any likely suspects?" he writes. "Maybe an evil supervisor (think ‘The Green Mile' or ‘Office Space') or that jerk of a brother-in-law?"
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Posted
Feb 10 2009, 05:44 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This post comes from Jim at partner blog Bargaineering.com.
E-filing stands for electronic filing and is an option the IRS offers for those who want to skip paper tax returns and go electronic. There are many benefits to e-filing your taxes, but there are still a lot of people who don't e-file for reasons I'm not completely sure of.
I know that a lot of filers simply aren't familiar with the system and are used to filing a paper return; I completely understand their reservations. I didn't trust electronic bill pay for the longest time and I'm 28, not someone who had been mailing checks to pay bills for 20 years.
For those on the fence, wondering if you should e-file, here are 10 good reasons why you should:
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Posted
Jan 08 2009, 07:20 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
The tough economy has produced one blessing we can count. "It's helped the IRS find a heart," Kay Bell said in a post at Don't Mess With Taxes.
IRS Commissioner Doug Shulman announced that the Internal Revenue Service will work with people who can't pay what they owe because of job loss or some other financial catastrophe.
You'll still have to pay your taxes, but you may get more time to do it. "The IRS does feel your pain," Kay wrote.
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Posted
Jun 23 2008, 04:17 PM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
Irreverent, hilarious, provocative and profane -- all were qualities of the great George Carlin, who died Sunday from heart failure. But who knew that Carlin was also a good source of financial advice?
What else would you expect from the comedian who so well understood our fascination with materialism, as demonstrated by his "A Place for My Stuff"? ("Bouncing Back" at Bouncing Back from Bankruptcy, one of many Carlin fans who mourned his passing online, provides a link to the "stuff" routine. Considering it's Carlin, the language is only slightly off-color.)
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Posted
Jun 02 2008, 01:34 PM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
We're in the same boat as "PT" at Prime Time Money. Our tax-rebate check has yet to arrive. Just like PT, we thought our rebate would be direct-deposited into our checking account on May 9, based on our Social Security number and the IRS payment schedule. So, like PT, we dug a little deeper to find out where it could be.
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Posted
May 12 2008, 01:06 PM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
The government giveth, and the government taketh away, given the opportunity. You might want to keep that in mind when you're wondering why your economic-stimulus check is smaller than you thought it would be. Kay Bell, the author of our favorite tax blog, Don't Mess With Taxes, explains: "If you owe the IRS federal taxes from previous tax years or have ignored a variety of nonfederal debts you owe, Uncle Sam can take those uncollected amounts out of any federal money you might be due."
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Posted
Feb 25 2008, 11:16 AM
by
Donna Freedman
Rating:
Money Blog: Smart Spending Blog - MSN Money
This post comes from Abby Freedman, a freelance writer and daughter of Smart Spending blogger Donna Freedman.
As an aspiring accountant, I am just odd enough to find income taxes fascinating.
Still, I understand there are saner individuals out there who prefer to duck and cover until this season is over.
Generally, they cope by forking over $100 to $200 to have simple returns completed -- and not necessarily by a CPA -- at a "tax-in-the-box" establishment.
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Posted
Feb 15 2008, 10:46 AM
by
Karen Datko
Money Blog: Smart Spending Blog - MSN Money
Have a question for your tax preparer that you think will sound stupid? You're probably right, says Creative Accountant at Just Read the Blog. But, for those who insist on testing "the patience, sanity and trigger finger of tax accountants," Creative Accountant presents a list of questions you really should avoid. Your dog is not a dependent. Also, you can't claim your sister's kid as one just because she can afford not to. "Sorry," CA says. "I don't make the rules." Now, on to medical expenses: "Botox and *** implants are usually not deductions," CA writes. "Now, most women probably just zoned in on the word 'usually.' So when is it a deduction? There is a good shot if you are a stripper it will fly."
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Posted
Feb 14 2008, 10:35 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
Lots of readers have told us they're confused about how the tax rebate will work, so we'll try to shed a little light on the matter.
The rebates -- tax blogger Kay Bell dubbed them "prebates" -- are an advance on a tax credit you would have gotten when you filed your 2008 tax return. You're just getting it a year early, says Bell, of Don't Mess With Taxes. The amount will be based on your 2007 tax return and range from $300 to $600 per adult, up to $1,200 for married couples who file jointly, and $300 per child under 17 years of age.
You're eligible if you have at least $3,000 in qualifying income. To see a government document for details about how much you can expect to get, click here.
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