Which begs the question, why is it so easy to be dismissive of this “movement”?  The quick answer is the lack of leadership, the lack of credibility, and the lack of a coherent message and strategy.  A perfect example of these facts is the raw video I shot of the Occupy SF participants last Friday.

Certainly we can appreciate the passion, but is yelling, “F*** the Ferraris” going to resonate and add to your ranks?  Is posting 20 different signs with completely different messages going to connect with the target audience that can actually help make a difference?  Is standing shirtless on the side of the street going to get you a seat at the table?  Clearly rhetorical questions, but the barriers are easily highlighted.

So, should we just dismiss all of the “Occupy” protests?  Of course not.  Not until we’ve taken the time to understand what they’re truly after.  I’ll defer to outlets that do a far better job of outlining the Occupy mission (LA Times, Business Insider) and proponent web sites that articulate a more succinct message (We Are the 99 Percent, Occupy Together) to help with that.

And while I understand how easy it is to dismiss Occupy Wall Street and each of the other Occupy protests around the world, the movement is worth a little research, since they might actually be fighting for something we support.

So if this deal passes through Congress, the Democrats need to call the EGTRRA extension what it really is, the Obama tax cuts.

- Matt

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Also, here is New York representative Anthony Weiner questioning the President’s “fight“ on this deal with Republicans.

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UPDATE, 12/9: Well, that didn’t go as planned.

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• IRS – Free File — The free file program is a fast, easy way to prepare and file your federal tax return online.  This program is available to you if your adjusted gross income is less than $56k.
• IRS – Last-minute reminders — These are reminders to those who have not yet filed a tax return, paid what they owe or requested an extension of time to file as the tax filing and payment deadline approaches.
• eSmart Tax – Tax preparation and filing – There are several online tax preparation options out there, but I have had a positive experience with eSmart.  Without any tax experience, certain functionalities can appear complex, but eSmart walks you through preparing your own return (for free) and the most cost-effective version allows you to file individual federal returns free of charge (filing state returns costs roughly $17).  They also have accumulated links to the tax collection agencies of each state.  Very cool.
• Jackson Hewitt - Last-minute filing tips — Jackson Hewitt recently put out a press release offering a few good tips, including a little top of the list brow-beating with “Stop procrastinating.”  Easier said than done, I’m sure.
• FoxBusiness – Last-minute payment options — For those of you who may owe taxes, this article explains a few good options for getting those returns filed and taxes paid.
• SmartBiz – Tax tips for small business — Although it doesn’t offer a lot of meat, this brief article on tax tips for small businesses is worth a quick readthrough.

Hopefully these resources help this weekend (and next week) go a little smoother!  Good luck and feel free to share any tips of your own!

- Matt

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1. 2008 stimulus payments are not taxable.  We mentioned this previously, but this is a common mistake, so remember that you do not need to include your stimulus payments as taxable income on either your federal or state tax returns.
2. Give your return one final review.  Review your tax ID number(s), recalculate your figures, and make sure all questions have been resolved.  An error on your tax return could be an unwanted headache and cause a delay in your tax refund.  Taking an extra 15 minutes to double-check your work now could end up saving you hours later.
3. E-file your tax returns rather than mail them.  Choosing to file electronically rather than filing a paper return results in faster processing and fewer human errors.  Most e-file services are safe and secure, but visit the IRS web site to see their list of authorized e-file providers.
4. Get your refund through Direct Deposit.  By adding the requested bank account information on page 2 of your Form 1040, you should receive your refund weeks faster than requesting a check.  Isn’t getting your refund faster always a good thing?
5. File an extension, but remember to pay what you owe.  If you won’t be able to file by April 15th, make sure you request an extension with Form 2350.  However, remember that if you think you will owe any tax, make sure you send in a check (or electronic payment) with the form, since an extension to file is not an extension to pay and any late payment may result in interest and late fees.  If you know you owe and are not able to pay the IRS by the filing deadline, contact the Taxpayer Advocate Service to determine the appropriate next steps.

If you have any other tax questions, feel free to ask them in the comments section and I’ll get back to you ASAP.

- Matt

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Super Saturday takes place tomorrow, March 21st.  If you’re interested, the IRS has offered a listing of VITA locations in your community.

Good luck and let us know how it goes!

- Matt

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During my time spent in public accounting I had the opportunity to work daily on something most people don’t even like to see once a year: income tax returns.  While my day job no longer requires that I fill out clients’ 1040′s, 1120′s, and 990′s, I have managed to retain a few nuggets of tax knowledge.  And fortunately, I never had to worry about these types of tax issues.

With the individual filing deadline less than one month away, I’d like to share four of the most common income tax return misunderstandings that you’ve likely come across or will in the near future.

1. Getting “bumped up to the next tax bracket.” Years ago, a close friend of mine was complaining about his recent pay raise.  He told me, “Yeah, I got a ‘raise’, but I’m taking home less money now because I got bumped up to the next tax bracket!”  His thought process was not unusual, but I went on to explain how the federal graduated tax brackets work. Essentially, rather than his entire taxable income being taxed at a higher bracket, only the portion of income that exceeds the previous bracket ceiling is taxed at the new rate. More simply, if he was single and his taxable income (line 43 on 2009 Form 1040) was $60k in 2008, his tax would be calculated as follows:
   

   (a) First $8,025 of taxable income is taxed at 10%,
   (b) Next $25,425 is taxed at 15%,
   (c) Final $26,550 is taxed at 25%.

   The graduated brackets result in a tax of roughly $11k, not the $15k he was expecting.  His real “problem” had more to do with the next misunderstanding.

2. Income tax withholdings. Initially, I was confused by my friend’s issue discussed above, but eventually I figured out what likely happened was a simple increase in the income tax withholdings from his paycheck.  These are initially determined when you start a new job and fill out the mysterious Form W-4 from the Admin department.  This form determines your “personal allowances” for the year, which plays a huge role in determining how much income tax is withheld from your paycheck each pay period.  Having “2” allowances is typical for a married individual, “3” is standard for a single person, and if you’re married with two children, “5” or “6” are the most common selections.

Basically, the higher the number of personal allowances you select, the lower the amount is withheld for income taxes from your paycheck.  So, if you find yourself owing the IRS too much at year-end or are getting too big of a refund (yes, getting an unexpected refund is nice, but you could have had that money in your pocket earlier), consider meeting with Human Resources and adjusting your personal allowances to find a better balance.

3. Tax-deductible donations. Even in these tough economic times, people find it in their hearts to make donations to their church, their alma mater, The Leukemia & Lymphoma Society, and millions of other worthwhile causes.  Many individuals work this giving into their year-end tax planning, thereby benefitting both the donee’s projects and the donor’s income tax return.  However, these donations are not always tax-deductible.  These are the first two hurdles to taking a deduction for your gift:
   • You must file a Schedule A with your Form 1040.  If your standard deduction exceeds your potential itemized deduction from Schedule A, you won’t receive a tax benefit from your donation.  By no means am I suggesting that you should stop gifting just because you won’t receive a deduction to your income taxes, but it’s something to be aware of; and
   • The charity you are donating to must have an approved “charitable status.”  According to Schedule A instructions, “You can deduct contributions or gifts you gave to organizations that are religious, charitable, educational, scientific, or literary in purpose…also…organizations that prevent cruelty to children or animals.”  However, to verify the organization’s charitable status, obtain verification directly from the entity or review IRS Publication 78 for a full list of most qualified organizations.
4. Taxability of stimulus checks. In the early part of 2008, most Americans received a stimulus check/payment/refund (whatever you would like to call it) from the federal government and many individuals are confused about the taxability of this mini-windfall.  As confirmed by FactCheck.org, the stimulus payments are not taxable on a federal or state level.

The Internal Revenue Code can be over-technical and bloated, but hopefully we have explained some of the most common issues you will come across. If you’re looking for more information, check out our tax resources or send us an email.

- Matt

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UPDATE (3/31):  If you’re looking for more specific information on how to adjust your tax withholdings, take a look at IRS Publication 919.

I will be posting on common income tax misunderstandings later this week, but in the meantime, take a look at our resource links for tax preparation.  They include cost-effective options for “simple” tax returns (no additional schedules), self-preparation, and even a regional CPA firm I have a bit of history with.

If you need more guidance or have any tax-related questions, leave them in the comments and I’ll do my best to help you out.

- Matt

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Don’t get me wrong, I don’t believe massive government spending and increasing our national debt even further is the answer to our economic ills, but until I come up with a better plan, I will always reject what I see as crazy: Doing the exact same thing over and over again, while still expecting a different result.

Obama called the stimulus package a “balanced plan with a mix of tax cuts and investments.”  Here is his post-signing speech at the Denver Museum of Nature & Science:

- Matt

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However, it does bring to light a glaring fact: People hate taxes and they hate preparing their tax return even more.  Even if a refund is at the end of the IRS rainbow, the average person will wait until the last minute to file or they will have a geek like me take care of everything. 

So what causes this pervasive tax-prepa-phobia?  Easy answer: The legalese-laden Internal Revenue Code, tax forms, and tax publications.  Even some of the form instructions need their own set of instructions!  Don’t get me wrong, I recognize the IRC has helped maintain a demand for CPAs and tax preparers, but what about those individuals who don’t have the financial means or inclination to pay someone $150+ per hour to help plan or prepare their taxes?

Since most people fit into this group and choose to prepare their own taxes, we have brought together some Guides & Tips on our Resources page that should help in this annual endeavor, including links to IRS Forms and Instructions, MSN Tax Center, and IRS Taxpayer Advocate Services.  We hope to offer periodic help through our posts, but we will also regularly update our tax guides & tips resources as we find them.

If you have any suggestions or questions, please pass them along below or shoot me an email!

- Matt

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