High Taxation On S.S. Benefits Slams Seniors

The tax on Social Security income has not been adjusted for inflation since it was enacted 23 years ago.

The law, aimed at taxing a portion of Social Security benefits for "high income" filers, already affects millions of middle-income seniors, who each pay thousands of dollars in additional tax as a result of it. And as baby boomers edge closer to retirement, it's certain to ensnare millions more, Mark Luscombe said, principal tax analyst with CCH, a Riverwoods, Ill.-based publisher of tax information.

The tax on Social Security benefits is triggered when a senior's wage, pension, investment and dividend income exceeds a set threshold. At that point, a senior who fills out a return by hand must complete an 18-line worksheet that ultimately determines how much of his or her otherwise tax-free Social Security benefits will become taxable. (Most tax software programs do the calculation automatically, so those who file that way may not even notice the extra tax.)

For a single senior, each dollar of income over $25,000 makes 50 cents of his or her Social Security benefits taxable. For married couples, that threshold is $32,000.

Miami Herald

The Truth About Cell Phones And The Do Not Call Registry

The Federal Trade Commission (FTC) reiterated that despite claims made in widely circulating e-mails, consumers should not be concerned that their cell phone numbers will be released to telemarketers in the near future, and that it is not necessary to register cell phone numbers on the National Do Not Call (DNC) Registry to be protected from most telemarketing calls to cell phones....-MORE-

Michigan Association of CPAs

Treasury Secretary Snow Releases Video on Identity Theft

To view the Video News Release (VNR) please click the link below

You Will Need Media Player On Your Computer
Video News Release (VNR)

U.S. Treasury Department

Medical Expenses Of Dependents

You can generally deduct medical and dental bills for yourself, your spouse, all dependents you claim on your return, your child whom you do not claim as a dependent as a result of divorce or separation, and any person you could have claimed as a dependent on your return except that the person received $3,200 or more of gross income or filed a joint return. The last one could result in a big deduction. For example, you provided over half of your father's support but can't claim him as a dependent because he received wages of $3,200 in 2005. You can claim any medical and dental expenses you paid for him in 2005.

A/N Group, Inc.

TEN SMART WAYS TO AVOID IDENTITY THEFT
Here are 10 steps you can take to help prevent you from becoming a victim of identity theft....-MORE-

Michigan Association of CPAs

Gift Taxes

If you gave one person in 2005 gifts that were valued at more than $11,000, you must report the total gifts to the IRS and you may owe tax on the gifts

Inrernal Revenue Service

2005 Michigan Individual Income Tax Instruction Booklet

Michigan Department of Treasury

It Will Pay To Prepare For Your Tax Preparer

The 'envelope system' not only gets you organized, helps you and your preparer find tax savings -- and offers peace of mind. Here's how to put it to work

MSN

Highlights - Energy Policy Act Of 2005

During 2006, individuals can make energy-conscious purchases that will provide tax credit benefits

Internal Revenue Service

Summary of Tax-Law Changes 2005 - 2010

10 Tax-Savvy Steps for After the New Year

FAQs on the Alternative Minimum Tax

TurboTax

Recordkeeping For Individuals

Why Keep Records?
Kinds of Records To Keep
Basic Records
Specific Records
How Long To Keep Records

Internal Revenue Service

2005 Michigan Individual Income Tax

Michigan Department of Treasury

Stay Away From Tax Refund Loans

Would you pay a 521-percent annual interest rate, or fees that equal that much, to borrow money that belongs to you? That's what taxpayers may do when they get a loan from their tax preparer, in anticipation of a tax refund. They start out with hopes for quick cash and end up losing more than 10 percent of their refund in fees. These fees went to preparers, such as H&R Block, who aggressively promote refund loans during the tax filing season. They offer a tax filer money based on the anticipated tax refund. A bank makes the payment through the tax preparer. The money is actually a loan, repaid by the refund.

Keeping Good Records

You can avoid headaches at tax time by keeping track of your receipts and other records throughout the year. Good record-keeping will help you remember the various transactions you made during the year, which in turn may make filing your return a less taxing experience.

Internal Revenue Service

Tightened Rules For "Head Of Household" Status

Claiming "Head of Household" Just Got Harder

When it comes to income taxes, a "dependent child" is a dependent child, yes? But Congress more or less unified the five different definitions of the term, starting in 2005. So now the one definition applies when calculating head-of-household filing status, the exemption for a dependent, the child tax credit, the child and dependent care credit and the earned-income tax credit.

Washington Post

Thrift Shop Guide - Valuing Donated Goods

The Children's Home

Taxpayers Can Claim General Sales Tax Deduction Instead Of Income Tax

Last Year To Claim This Deduction

2005 Optional State And Certain Local Sales Tax Table - Page 92 of IRS Instructions
http://www.irs.gov/pub/irs-pdf/i1040.pdf

Internal Revenue Service

Life's Financial Emergencies: What You Can Do To Prepare

Many people plan for anticipated expenses, like paying for college and saving for retirement. Yet, when unexpected financial emergencies occur, individuals often find themselves unprepared. The fact is a job loss, serious illness, divorce or natural disaster can happen to anyone. Fortunately, there are steps you can take to prepare for a financial crisis. According to the Michigan Association of CPAs, having an emergency fund and adequate insurance top the list in times of urgency....-MORE-

IRS Taxpayer Advocate Issues 2005 Report To Congress

Advocate calls on Congress to simplify taxes; outlines common taxpayer problems.

Internal Revenue Service

Highlights Of 2005 Tax Law Changes

A new uniform definition of a qualifying child, special rules for car donations, higher standard mileage rates and expanded retirement savings incentives are among the changes individual taxpayers will find when they sit down to prepare their 2005 federal income tax return.

Internal Revenue Service

Get Written Acknowledgment For Donated Cars

The IRS reminds Taxpayers that they must obtain a charity’s written acknowledgment of their vehicle donation before they claim a deduction of more than $500 for the donation.

Internal Revenue Service

MPSC: 2006 Ushers in Energy Efficiency Improvement Federal Tax Credits Up to $500

Michigan Public Service Commission

New AMT Assistant Debuts on IRS.gov

Online tool to help individuals determine whether they are subject to alternative minimum tax.

Internal Revenue Service

New Year, New Financial Records: What To Keep And For How Long

Personal financial records are a necessary part of our lives, but it’s easy to get overwhelmed by the volume of papers that can accumulate. According to the Michigan Association of CPAs, January is an excellent time to get your financial records in order. Here is some advice to help you determine what you should keep and what you should purge from your files....-MORE-

Earned Income Tax Credit (EITC) Should I Apply?

The EITC is a credit for certain people who work.
Find out if you are eligible for the Earned Income Tax Credit (EITC) by answering some questions and providing basic income information. The program will also assist you in determining your correct filing status, determining whether your child(ren) meets the tests for a qualifying child, and estimating the amount of credit that you may receive.

Internal Revenue Service

IRS - Frequently Asked Questions & Answers

Internal Revenue Service