One of the stories we've been following in this blog is role that tax law will pay in the implementation of the Affordable Care Act (ACA). As we discussed in our April 16 post, the ACA - otherwise known as Obamacare - will affect taxes in several ways.
Tax law, like any established field of knowledge, is full of acronyms and abbreviations. Some of them can seem pretty arcane to people who aren't tax professionals. But doesn't mean they aren't important.
Estimates of the average cost to raise a child are an exercise in sticker shock. U.S. government figures from the Department of Agriculture conservatively put the number in six figures for expenses such as food and clothing up to age 17. And the cost of day care and other dependent care expenses only add to parents' considerable financial responsibilities.
When filing a federal or a California income tax return, people are always on the hunt for deductions and credits that can reduce their tax liability. While deductions are useful, credits are even more valuable because they reduce a person's tax owed dollar for dollar. Some credits are even refundable, meaning the taxpayer will get money back if the credits exceed a person's tax liability. California and the federal government offer a wide variety of credits designed to create incentives for certain taxpayer behavior while others are meant to help lower-income individuals.
Many Orange County taxpayers may be anticipating a refund from the IRS this spring. Californians use their refunds for any number of things, including home improvement, paying down debts or making the big purchase they have had their eyes on for a while. Unfortunately, scam artists also look forward to tax season because they hope to defraud honest people out of their hard-earned tax refund.
The year is not over and it is not too late to make some shrewd moves to save on your yearly tax bill. In our last post we discussed the importance of proper tax planning for high income individuals and the fact that some deductions may trigger an IRS audit. We also discussed three tax saving tips that the IRS recently issued including donating to charity, installing green-energy appliances, and making changes to an investment portfolio.
In our last post we discussed a recent study of the IRS' administration of the first-time home buyer tax credit program. It appears that the IRS has sent erroneous payment demands to some taxpayers who owe nothing while failing to catch a few pretty obvious fraud schemes related to the tax credit. The most recent study into the IRS' antics highlights the importance of calling an experienced Orange County tax law attorney if you are contacted by the IRS. An attorney will properly manage and document all interactions with the IRS so a taxpayer will not fall victim to the failings of the IRS.
An experienced California tax law attorney should be called anytime that an Orange County resident is contacted by the IRS. Any contact with the IRS can indicate that a taxpayer is under investigation or being audited and that it is time to seek a tax professional. It is important not to talk directly to the IRS even if you have not committed tax fraud or tax evasion. Honest taxpayers can find themselves in trouble for misstatements and an experienced tax attorney can properly deal with the IRS to avoid a misstatement becoming a huge headache for a taxpayer.
The IRS and the Department of Health and Human Services will conduct a new round of outreach to small business owners in Orange County and throughout the country. The outreach efforts will target small business owners that may not be aware of whether they qualify for the Small Business Health Care Tax Credit. This tax credit was a part of last year's Affordable Care Act.
This afternoon, President Obama will hold a Rose Garden news conference where he will call on Congress to extend a tax break for college students that was included in last year's economic stimulus package. The President's rationale is that the tax break provides assistance to middle-class families struggling with rising college tuition costs.