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Entries in Tax Day (25)

Tuesday
Apr172012

IRS Tax Day 2012: A Lonelier Post Office

Where did all the people go? This post office in NYC used to be packed with last minute filers on tax day. Not so much any more. ABC News(NEW YORK) -- For the United States Postal Service, tax deadline day is hardly as fun as it used to be.

“In the old days it was tax night parties and people standing outside grabbing the mail as you drive by,” said Connie Chirichello, a spokeswoman for USPS in New York.  “Things have totally changed.”

They’ve changed because most taxpayers are filing online.  For the week of April 6, the most recent for which data is available, 87 percent of taxes filed were done so electronically.

It means fewer of the financially strapped post offices around the country have the customers or the resources to stay open until midnight to accommodate procrastinators.

In California, for example, the Postal Service says there are 22 post offices with extended hours, about a quarter of the number open late in the past.

“[Taxpayers] were going to the post office to mail their return at 11:30 at night and over the last 15 years it has changed,” said Chirichello.

Copyright 2012 ABC News Radio

Tuesday
Apr172012

Tax Day: Still Haven't Filed Your Returns? Opt for an Extension

iStockphoto/Thinkstock(NEW YORK) -- Are you freaking out because you haven’t filed your taxes yet?

Relax, says New York tax accountant Janice Hayman.  “Do yourself a favor and file the extension and then you can file your return once you have a moment to breathe,” she says.

While April 15 is typically the tax-filing deadline, taxpayers received a two-day reprieve this year, pushing Tax Day to the 17th of the month.  But many people wait until the last day before mailing their annual returns.

Filers who rush through their forms are making a costly error.

“Frequently the mistakes are not in their favor,” says Hayman.  “They underestimate expenses or even worse they could underestimate income and that could certainly cause them more pain.”

Simple math mistakes are among the most frequent problems with taxpayers’ returns.  And these goofs can lead to questions from the IRS.

“Once you do your taxes you want to put them to bed,” says personal finance writer Farnoosh Torabi.  “You don’t want to hear from the IRS again unless it’s a refund check.  You don’t want to hear from the IRS saying you have to fill out the form again or we’re going to audit you.”

That’s why Hayman and nearly every other tax preparer says don’t do your paperwork in a rush.

“They should absolutely take their time and file that extension,” she says.  “You can do it electronically.  You can download a form and mail it in to the IRS or to your state.”

The IRS extension form is 4868, which you can get from the IRS' website.  While this gives you an additional six months to file, anything you owe on your 2011 taxes is due now.  You can send in a check with the extension form.

Another argument for filing an extension is that Tax Day is probably the worst day of the year to get your tax questions answered by a professional.

“It’s very hard right now to get somebody who’s coherent,” says Hayman.  “Taxpayers should take a step back, relax a moment and understand there’s no penalty for filing an extension.”

Copyright 2012 ABC News Radio

Monday
Apr162012

Seven Tax Deductions That Set Off Alarms

Comstock/Thinkstock(NEW YORK) -- With only one day before the Internal Revenue Service's April 17 deadline, here's a look at a range of common and uncommon tax loopholes that, depending on your career, border on gray to you, but to auditors can come across as flashing red lights:

Guard Dogs

If you have certified guard dogs for your business, they may be deductible.  Philadelphia tax attorney Kelly Phillips Erb said they can't be "junkyard dogs" to be deductible.

Similarly, private jets that are purchased for security reasons could be deductible for corporations, and not just if they offer convenience or comfort, Erb said.

Gambling

Casual gamblers may not realize they can deduct their gambling losses as professional gamblers do.  There are some things to note, however, said Erb. 

First, you may deduct gambling losses only if you itemize deductions, which Erb said is only a third of tax filers.

Gambling income includes, but is not limited to, winnings from lotteries, raffles, horse races, and casinos, cash winnings and the fair market value of prizes like cars and trips.

Second, the amount of losses you deduct can't exceed the amount of gambling income reported on your return.  That rule doesn't apply to professional gamblers.

"If it's your real job and you lose money, then you can deduct those losses," she said.  "But if you're just a casual gambler, you're out of luck if you always lose."

Home Office Costs

"You could find a million things for home offices that people can wrongly think they can deduct," Erb said.  But unless your home office is your primary place of business, auditors will take note if you deduct for related costs.

Many people treat their kitchen table or living room as their home office or home office storage area, but it's often not a primary place of work.

"If you choose to work from home because you want to, that doesn't create a home office," Erb said.

Clothing

Ted Schwartz, president and chief investment officer of Capstone Investment Financial Group and ABC News personal finance columnist, said he once had a client who was a professional wrestler who tried to deduct formal clothing he wore for interviews or other public appearances.  His reasoning was that he would never wear suits unless for work.

"I told him, 'if you have a wrestling uniform, that's an expense,' but clothing is not," Schwartz said.

Erb has a friend who works at a high-end retail store and is required to wear acceptable, nice clothing.  She wanted to deduct for the costs, which were significant on her budget, because said she said she would not wear that clothing of her own volition.

"She would never wear that clothing outside of work, but the IRS doesn't care," she said.

Legal Expenses

Certain personal legal expenses could be deductible to a degree, said Erb.

"Sometimes you can write off legal expenses if they are related to producing income," she said.

Writing off tax services from a divorce attorney could be deductible.  Writing off legal services related to a custody battle would probably not be.

Travel and Entertainment

Writing off travel and entertainment expenses is considered "low-hanging fruit" for auditors.

Mixing business with pleasure usually means a meal or trip is not deductible, said Erb.

"I've had a lot of folks who try to claim related expenses, which is where the fraud tends to be," she said.

Diet and Fitness Costs

While health and diet expenses that are prescribed by a physician can be deductible, advice from a doctor will not support an expense you try to write off.

"Dieters will say their doctor instructed them to lose weight," Erb said.  "Or they try to deduct a club membership because the doctor said to exercise more.  Those are only deductible if they are prescribed.  Not if a doctor just told them to do something."

Copyright 2012 ABC News Radio

Monday
Feb062012

Tax Tip: Things to Do Before You File

Comstock Images/Thinkstock(NEW YORK) -- The countdown to Tax Day is underway, and while many may dread filing their taxes, the process can be made easier with some organization.

"The first thing everyone should do before they even put pen to paper or go online to file their taxes is to get everything in order," advises Farnoosh Torabi of Yahoo Finance.

That includes "All your W2s, your 1099s if you are freelancing, if you work on the side; all of your receipts, [and] if you have any deductions that you want to qualify for," Torabi explains.

He adds, "It's really important to get a paper trail going."

And once you have all that paperwork together, tax accountant Janice Hayman says, "It's really important to make certain that you report all of your earned income, all of your investment income -- basically income from all sources, and you don't want to forget to claim every possible deduction you're entitled to."

Those deductions may include charitable donations and business expenses you paid for, plus state and local income taxes.

Copyright 2012 ABC News Radio

Thursday
Jan052012

IRS Gives Taxpayers Two-Day Extension to File Returns

iStockphoto/Thinkstock(WASHINGTON) -- The Internal Revenue Service officially kicked off the 2012 tax filing season on Wednesday, and this year, taxpayers are in store for a federal tax holiday of sorts -- a two-day extension to file their 2011 tax returns.

Tax Day will be moved up to April 17, given that the usual April 15 deadline falls on a Sunday this year and the following day is Emancipation Day, a holiday observed in the District of Columbia.

As the IRS explains, "According to federal law, District of Columbia holidays impact tax deadlines in the same way that federal holidays do; therefore, all taxpayers will have two extra days to file this year."

The agency expects to receive more than 144 million individual tax returns in 2012.  Taxpayers can begin submitting their e-file and Free File returns on Jan. 17.

Copyright 2012 ABC News Radio

Tuesday
Jul122011

Will Baseball Fan Have to Pay Up for Returning Jeter's 3,000th Hit Ball?

Jeffrey Hamilton/Photodisc/Thinkstock(NEW YORK) -- When Christian Lopez returned the home run ball that represented Derek Jeter's 3,000th hit last Saturday, the New York Yankees showered Lopez with tickets and autographed memorabilia as a sign of the team's appreciation.

But come Tax Day 2012, the 23-year-old baseball fan may see those gifts as a burden if he gets stuck with a bill from the Internal Revenue Service.

Tax experts told The New York Times that Lopez would have to declare as income everything the Yankees gave him for the historic ball.  This includes free tickets for the remainder of the 2011 regular season, as well as for any postseason games; and three bats, three baseballs and two jerseys all autographed by Jeter.

The tickets alone are estimated to be worth between $44,800 and $73,600, according to the Yankees' website.

If the gifts were valued at just $50,000, Lopez would be forced to pay about $14,000 in taxes, a tax expert told the newspaper.

The IRS declined to speculate whether Uncle Sam would come after the baseball fan.

Copyright 2011 ABC News Radio

Monday
Apr182011

Tax Day Deals: Where to Go for Freebies, Discounts

Medioimages/Photodisc(NEW YORK) -- Monday is Tax Day, and some big chains and businesses are offering deals across the country.

Bruegger's: After filing your 1040, head off to this bagel chain for a big bagel bundle that includes a baker's dozen and two tubs of cream cheese for $10.40. The deal requires a printed coupon that can be found on Facebook.

California Tortilla: The fast food restaurant is offering customers free chips and queso with the purchase of a Cal Tort on tax day. "And if you're not a cheese fan (how is that even possible?), we'll be happy to give you Chips and Salsa instead," according to the company’s Web site.

Chili's Grill & Bar: The chain restaurant has printable coupons on its Facebook page for a free appetizer or dessert at participating restaurants.

Cinnabon: Tax day offerings from the dessert spot include two free Cinnabon Bites from 6 p.m to 8 p.m. on at participating bakeries.

Hooters: The burgers and wings restaurant is offering an "instant rebate" to customers. For customers dining in, the purchase of 10 wings will net 10 wings for free. The deal is available at participating restaurants on tax day.

Hydromassage: Hundreds of business owners across the nation are uniting to eliminate stress by giving out free HydroMassages, according to the company’s Website. Get a free hydromassage at one of the many locations across the United States. It is suggested that consumers hoping to receive the free tax day massage call to make an appointment.

MaggieMoo's Ice Cream and Treatery:
The premium ice cream store is calling its tax day giveaway "Sundae Stimulus." Participating treateries will hand out free mini ice cream sundaes from 3 p.m. to 6 p.m. while supplies last.

McCormick & Schmick's: The tax procrastinators can celebrate all day with the $10.40 entrée and drink specials at the bar.

Papa John's: Pro-crust-inators, the pizza chain is offering a tax deal to customers that order online. Simply enter 1040 in the promotional code section of www.papajohns.com and get a large four topping pizza for $10.40.

P.F. Chang's: The Chinese fusion chain restaurant is offering "tax relief" to customers by trimming 15 percent off of dine-in and take out.

White Castle: White Castle, the restaurant that gained infamy from Harold and Kumar, is offering coupons on its website for 15 percent off any purchase through April 19. Yep, an extra day of savings. You must print out the White Castle Treasury coupon to take advantage of the deal.

Zazzle.com: The online store that allows customers to customize everything from t-shirts to binders will offer 10.40 percent off eligible purchases. To take advantage of the deal, customers are required to enter TAXDAYSALE11 at checkout in the Zazzle Coupons/Gift Certificate box.

Copyright 2011 ABC News Radio

Monday
Apr182011

Income Tax Returns Due Monday by Midnight

Comstock Images/Thinkstock(WASHINGTON) -- Uncle Sam gave you three extra days to file your taxes this year.  If you still haven’t filed, Monday at midnight is the deadline.

Federal and state income taxes are normally due April 15.  However, Emancipation Day, a holiday that's observed in the District of Columbia, fell on that day this year, so the IRS gave taxpayers three extra days to file.  The IRS says, by law, District of Columbia holidays affect tax deadlines in the same way that federal holidays do.

Taxpayers who request an extension, provided it's filed before midnight Monday, will have until October 17 to file their 2010 tax returns.

And for those who still mail their returns in big envelopes, be aware that some postal rates rose Sunday.  The cost of sending a one-ounce, first class letter is still 44 cents, but the cost of mailing a second ounce increased from 17 to 20 cents.

Copyright 2011 ABC News Radio

Friday
Apr152011

Tax Day Freebies, Discounts: Where to Go

Tom Pennington/Getty Images(NEW YORK) -– Big chains and business are offering deals across the United States on Tax Day. For tax filers all tuckered out after long lines at the post office to pay the IRS, ABC News created an easy to use guide of where to go from now through April 18 for discounts and free stuff.

Arby's: The fast food chain is offering free value curly fries to kick off tax weekend. Customers must "LIKE" the chain's Facebook page to gain access to the coupon that is valid on April 15 only.

Bruegger's: After filing your 1040, head off to this bagel chain for a big bagel bundle that includes a baker's dozen and two tubs of cream cheese for $10.40. The deal lasts from April 15 to April 18 and requires a printed coupon that can be found on Facebook.

California Tortilla: The fast food restaurant is offering customers free chips and queso, which is cheese, with the purchase of a Cal Tort on tax day. "And if you're not a cheese fan (how is that even possible?), we'll be happy to give you Chips and Salsa instead," according to the Web site.

Chili's Grill & Bar: The chain restaurant has printable coupons on its Facebook page for a free appetizer or dessert at participating restaurants on April 18.

Cinnabon: Tax day offerings from the dessert spot include two free Cinnabon Bites from 6 p.m to 8 p.m. on Monday at participating bakeries.

Hooters: The burgers and wings restaurant is offering an "instant rebate" to customers on April 18. For customers dining in, the purchase of 10 wings will net 10 wings for free. The deal is available at participating restaurants on tax day.

Hydromassage: Hundreds of business owners across the nation are uniting to eliminate stress by giving out free HydroMassages on April 14-18, according to the company's Website. Get a free hydromassage at one of the many locations across the United States. It is suggested that consumers hoping to receive the free tax day massage call to make an appointment.

MaggieMoo's Ice Cream and Treatery: The premium ice cream store is calling its tax day giveaway "Sundae Stimulus." On Monday, participating treateries will hand out free mini ice cream sundaes from 3 p.m. to 6 p.m. while supplies last.

McCormick & Schmick's: The seafood restaurant will hand out $10.40 tax relief certificates to early filers on Friday, April 15. The procrastinators can celebrate all day on Monday, April 18 with the $10.40 entrée and drink specials at the bar.

Office Depot: Tax filers in need of copying services can drop by the office supplies store for a free copy of 2010 tax returns. The nationwide deal allows consumers to make up to 25 single-sided pages copies of 2010 tax returns through April 15, 2011.

Papa John's: Pro-crust-inators, the pizza chain is offering a tax deal to customers that order online. Simply enter 1040 in the promotional code section of www.papajohns.com and get a large four topping pizza for $10.40 from April 15 – 18.

P.F. Chang's: The Chinese fusion chain restaurant is offering "tax relief" to customers by trimming 15 percent off of dine-in and take out on April 18.

Seaboard Wine & Tasting Bar: The Raleigh wine shop will shave 15 percent off a case of wine and pay the tax. Shoppers can take advantage of the one day only tax day holiday on Friday, April 15. No rain checks.

White Castle: White Castle, the restaurant that gained infamy from Harold and Kumar, is offering coupons on its website for 15 percent off any purchase from now through April 19. Yep, an extra day of savings. You must print out the White Castle Treasury coupon to take advantage of the deal.

Zazzle.com: The online store that allows customers to customize everything from t-shirts to binders will offer 10.40 percent off eligible purchases through April 18. To take advantage of the deal, customers are required to enter TAXDAYSALE11 at checkout in the Zazzle Coupons/Gift Certificate box.

Copyright 2011 ABC News Radio

Friday
Apr152011

D.C. Celebrates Emancipation Day, Nation Gets Extension on Taxes

Ryan McVay/Photodisc/Thinkstock(WASHINGTON) -– Wondering why your taxes are due three days later - April 18 this year? It's because city workers in D.C. have the day off to celebrate Emancipation Day.

On April 16, 1862, Washington, D.C. became the first city in America to have slavery abolished by the federal government. City employees are celebrating Friday with an unpaid furlough day.

The official celebration of the holiday is Friday, so that means no school, no parking tickets and no trash pick-up for residents of the district, but for the nation it means the tax filing deadline is pushed back to midnight on Monday. The filing deadline is only changed if it falls on Emancipation Day, a Sunday or during a presidentially-declared disaster such as Hurricane Katrina.

"Emancipation Day kind of has a double meaning for D.C. It commemorates the emancipation of slaves... but also has a symbolic meaning is as far as D.C. being emancipated, eventually, from federal government control over local issues," said Rob Marus, a spokesman for the mayor's office who spoke to ABC News, despite having the day off.

Washington's unpaid furlough day is intended to help ease the district's budget problems. The city council passed an emergency budget provision in late 2010 establishing four already-celebrated public holidays, including Emancipation Day, as furlough days where city employees would not be paid. This provision will save the district $19 million in 2011.

Copyright 2011 ABC News Radio







ABC News Radio