It’s time to prepare your 2012 tax return. But have you ever considered submitting your federal income tax return online? Well, if you are ready to deal with your 2012 tax then there’s good news; you can prepare and file your taxes for free. You have to admit that it would be far simpler to do all of your federal income tax preparation from the comfort of your own chair and then file the taxes for free. You can file your taxes for free if you use an online tax software provider. If you have all of the information for your 2012 tax return to hand then you can do the job in no time at all.
US Navy 080206-N-6538W-008 Electrician’s Mate 2nd Class Nathan Hansen, left, helps Operations Specialist 1st Class Paul Lutton prepare his tax return aboard the Nimitz-class aircraft carrier USS John C. Stennis (CVN 74) (Photo credit: Wikipedia)
OK. So how do you go about doing your taxes for free online and preparing your tax return for 2012? Look online and locate a federal income tax preparationsoftware site that has been IRS approved. The majority of the sites that let you file your 2012 tax return for free are easy to understand. In fact doing your taxes has never been so easy. Anyone who is filling in their 2012 tax return needs to know that the site they use is speedy and secure. Find a site you like and fill in your 2012 tax return. When you have given all of the federal tax information needed then it’s time to let the software take over. Submitting your taxes has never been as easy and you can do all of this for free.
One of the many perks of online shopping, the lack of online sales tax, may soon be a thing of the past as the Marketplace Fairness Act, an official Senate Bill, is on its way to the House of Representatives. As of 1992, online retailers have only been required to collect sales tax from consumers that live in the state where the online store has a “physical presence”. However, tension was slowly mounting as smaller businesses tried to keep up with the many perks the online world offered.
English: Lochalsh Butchers Located in Station Road, Kyle of Lochalsh. This is a thriving local business with three other shops in the locality, offering online shopping, home delivery and mail order. (Photo credit: Wikipedia)
Retailers on the web slowly began to push that little edge, and allowed cheaper prices for the same product. Physical stores eventually caught onto the new trend, realizing that they had become showrooms for consumers who would end up leaving the store to buy the same product online.
The only thing slowing online shopping then was the shipping. Most would offer free shipping as a way to rope in new buyers; but people that really want something, have to have it right away, right? Nothing beats having your purchase in your hand right away. That was, until the start of the same day or next day shipping guarantee. That was the last push that gave small businesses all of the evidence they needed to argue the clear advantage online retailers possessed. They questioned how online retailers successfully carried out those guarantees without in-state affiliates. The bill easily passed with a vote of 69 to 27, getting support from both the Democrat and Republican parties. While large corporations and the average customer may not be affected much, this could mean a big loss for online retailers.
It is that time of year again; time to get out your tax documents, records, and W2s and do your taxes. Some people dread this time of year as they know they will owe the government money. Other people look forward to it as they know the government will be sending them a check. Still others just do not like it at all knowing that they will need to take the time to file their taxes.
If you dread this time of year because you are confused about your taxes or need help filing your taxes but cannot afford it, there is good news for you. The United Way has started a Free Tax Preparation Campaign that is helping lower-income wage earners receive all of the credits and refunds they qualify for, such as the Earned Income Tax Credit. This service is completely free and comes with no obligation or hidden fees.
If your household earns less than $51,000 annually and your tax filings will not involve business taxes, income from rentals or the sale of stocks or property, you may qualify for help with preparing your taxes. People whose first language is not English, who are not sure which deductions they may be eligible for or people who have trouble doing their taxes due to other disabilities or challenges will especially benefit from this free tax service.
There are several free tax preparation sites in various cities staffed with volunteers who are IRS certified and are multilingual. In addition to free tax preparation services, people can also find out more about other forms of public assistance, such as:
• Utility Assistance
• Children’s Health Care
• Food Stamps
• Help with applications for college financial aid
• Receive credit reports
• Many other services
There is a limited capacity at each site. For more information, including locations, translation services and required documents please visit www.uwkc.org/taxhelp. If you do not qualify for this free tax preparation service, using a tax software program, such as Turbo Tax 2013, can help you navigate the filing of your taxes in a more concise simpler manner.
Throughout its known history, corporate America has not been unfamiliar with the concept of companies seeking to enhance their profits by saving on high taxes. The three giants of American IT – Google, Yahoo and Microsoft have faced the ire of several competitors and governments in their efforts to place billions of dollars in tax havens or through complex, layered acquisitions. Today, Microsoft finds itself in troubled waters with the taxation authority of Denmark who have levied a charge of over $1 billion on the technology giant in back taxes and fines.
The Burden of Back Taxes
Steve-Ballmer-CBI-Annual-Lecture2009 (Photo credit: The CBI)
According to industry sources, Microsoft acquired the Danish Enterprise Resource Planning (ERP) software company Navision A/S in mid-2002. The taxation authority of Denmark claims that parts of the company were then sold to a small Microsoft subsidiary in Ireland and the company’s profits funneled through tax havens such as the Bahamas, Bermuda and Switzerland.
Navision has been renamed Dynamics NAV and operates in several countries around the world. Microsoft also competes with another American major Intuit who offers a personal and small business finance product TurboTax 2013 that is regarded as a threat to some parts of Microsoft’s ERP software developed by Dynamics NAV. Denmark’s corporate taxes are fairly high — to the tune of 25%, but the government has been proposing a 3% reduction in order to attract foreign investment. With countries such as Ireland and the Czech Republic offering significantly lower tax rates and inexpensive labor, several U.S. and European corporations have moved operations there, while making profits in high-tax nations. However, Microsoft’s use of Caribbean tax havens and subsidiaries to maximize profits has caused significant turbulence in a fragile software and financial market. Although Microsoft may come through relatively unscathed, any penalties paid may encourage other world governments to step up and challenge the American software majors.
The Discretion of the President to Plan Cuts Under Debate
President Barack Obama has been pretty vocal about the effect that automatic budget cuts are going to have. These warnings are getting increasingly ominous from the President and the Congressional Republicans are preparing to counter these warnings as far as possible. Basically the Congressional Republicans are looking to aid the administration with more flexibility and that too in instituting the 85 billion dollars worth of cuts. They believe and have said that this one proposal could actually serve the vital purpose of shielding the most important programs. This should be done while the political fallout is shifted to the White House.
English: In January 2009, President of the United States of America, George W. Bush invited then President-Elect Barack Obama and former Presidents George H.W. Bush, Bill Clinton, and Jimmy Carter for a Meeting and Lunch at The White House. Photo taken in the Oval Office at The White House. (Photo credit: Wikipedia)
This plan is undoubtedly facing extreme opposition from the administration. The administration has declared that it isn’t really planning to do much to soften the blows that have come upon the domestic and military programs. However, what’s worth the consideration is the fact that this is leading to apparent racks in the Democrats’ camp. This is essentially because it’s the lawmakers from the states who’re literally standing face to face with the deepest cuts. Now, this obviously goes on to say much as there are high chances that the Democrats might also be prepared to go along with the Republicans, simply so that they can manage to avoid arbitrary cuts to military programs as well as social services.
With the nation reeling under debt and that’s easily reflected with the increasing number of sign ups for programs like online debt consolidation, this political turmoil over the cuts seems literally unwanted. There’s hardly much time left until “sequestration” makes its way. Basically, the across the board cuts also known as sequestration have been scheduled to commence. It’s not surprising that the administration officials are not taking to this favorably and they’re still talking about the consequences to come in alarming terms. This is in spite of the fact that there was hardly any evidence of hardcore negotiations with the lawmakers such that a deal could be reached to avoid them altogether.
In spite of all this, a South Carolina Republican, Senator Lindsay Graham gave the impression of advancing the debate on Monday. He being a leading defense hawk expressed that this is actually the ideal opportunity to carry out the big deal. He said that he was willing to raise revenue of around 600 billion dollars provided the Democrats would be willing to reform entitlements. He believes that they can then fix sequestration together.
The secretary of homeland security, Janet Napolitano expressed that the automatic cuts would leave the country not so very well guarded. In fact, she also believes that this can actually leave the nation ill-equipped to meet terrorist threats. This is obviously going to turn into an inconvenience for millions of travelers too. There came further warnings from the interior secretary, Ken Salazar. He warned about campgrounds closing down and firefighting efforts being scaled back. He also spoke about lesser seasonal workers who’ll be hired.
Ms. Napolitano opines that there’s always a threat looming large. Though they plan to do everything they can to minimize the risk involved, yet it’s a fact that the sequester makes things really very tough.
It’s a known fact that efforts are being made to shift the responsibility completely to President Barack Obama and to cushion the attacks by the White House. Now, what’s important is the fact that Republicans were supposed to unveil legislation on Tuesday and they said that this would literally alleviate their biggest concerns. This measure is supposed to be effective because it’ll allow for agencies and departments to amass programs that had long since been proved to be ineffective. This is almost like a measure to prove that there were functions like say critic federal functions as well as air traffic control and meat inspection that had been spared.
Now, if the Congress happens to grant the White House the authority to protect the air traffic controllers and other such patrol agents, then the administration’s carefully devised plan is bound to lose impetus.
The ability to get prior year tax information from the IRS is virtually a guarantee due to the fact that the IRS is required to keep tax returns on file for seven years. As with most actions related to the IRS there is a form that is required to fill out in order to obtain prior tax information. This is Form 4506 that can be found by completing a simple form search on the IRS website. The IRS will not provide prior tax information without filling out a hard copy of Form 4506.
Seal of the United States Internal Revenue Service. The design is the same as the Treasury seal with an IRS inscription. (Photo credit: Wikipedia)
The form is self explanatory and should be filled out to include the exact information from the tax return of the prior year. At the very least, the name and social security number should match as well as the spousal information if the return was filed jointly. Additional information should include the prior year tax form such as Form 1040, 1040A, or 1040EZ. Form 4506 can be completed regardless of a recent divorce without spousal consent. One of the final requests on the form is to fill out the prior year tax information being requested such as 12/31/2012.
The required fee for Form 4506 as of 2012 is $57 in the form of check or money order payable to the US Treasury that is required when mailing the form to the appropriate IRS office. However, tax filers that used Turbo Tax 2013 have the distinct advantage of obtaining prior year tax information at no cost. This free service is included with the use of Turbo Tax 2013 Basic, Deluxe, Premier, Home & Business, or Freedom Edition. Even greater is the use of the online edition of Turbo Tax 2013 that will automatically look up prior year tax information for a user to view or print.
The much awaited tax reform has at last arrived to reduce the tax code’s bias for debt. As per the recent announcements, the U.S. corporate tax rate may reduce to 25% from 35%. The non-financial corporations will be allowed a deduction of nearly 65% of their gross interest expense, whereas the financial corporations will be allowed a deduction of up to 79%. Some special rules and regulations have also been implemented for the corporations who have stated a malfunction in the tax purposes.
Interest Rates (Photo credit: 401(K) 2013)
According to various financial experts, the general strategy is to reduce the corporate tax while restraining the interest rate deduction. This strategy may be helpful in reducing the tax code’s bias for debt. Consequently, the investments projects may get more lucrative for U.S. in the near future.
Debates are on regarding whether the situation will really improve or not. Doubts have been raised whether the tax code’s bias for debt will actually be modified or not. Well, there are justified reasons behind these doubts and debates. The reduction of tax code’s bias has both benefactors and oppositions. If the bias gets corrected, then it may be helpful for numerous debt finances. On the contrary, some organizations which were used to take advantage of this bias may face serious hike in the tax burden. They may encounter difficulties to pay off taxes.
However, the evaluation of the tax reform proposal must not be done by judging only individual interests. If the tax reform may help in overcoming the economic obstacles in U.S., then it should be received positively. It’s being assumed that the tax deductions may lead to efficient distribution of resources. Many corporations may avoid issuing debts because of interest rate deduction. This will ensure that the organizations will not make financial decisions due to tax purposes. Rather, the decisions will be influenced by economic reasons. This may be beneficial for an overall economic growth in U.S.
As per some financial analysts, the application of interest cap to the pre-existing debt is not an excellent idea. To make the reformation successful a few other steps must also be taken by the U.S. government. If the tax reformation permits grandfathering of accessible debts, then the corporations may rush for issuing long-maturity debts. The rush to pay off taxes must be reduced too. For the reduction of the rush the U.S. government must take some fortified step. Only then the corporate taxes may be controlled and the reformation may turn out to be really effective.
There are arguments regarding what should be the nature of tax reformation. Many financial experts believe that the interest cap must be applied only to the net interest expenses and not to the gross interest expenses. This opinion has faced much criticism. The application of interest cap to the net interest expenses may raise the amount of revenue. As per the reports of the Congressional Research Service, the reduction in the corporate taxes may reach the 15% notch.
The restriction of net interest rate deduction may even increase the effective marginal tax rates on the vital debt-financed investments. So it’s better to concentrate on applying the interest cap on net interest expenses rather than targeting gross interest expenses.
The U.S. tax reforms may have reduced the tax code’s bias for debt but it’s not yet clear how effective this is going to be. Unless the tax reforms turn out to be completely revenue-neutral, it can’t be effective enough.