Small Business

New School: The IRS Launches Educational Website

by Joshua on February 29, 2012

Imagine if a Graduate Tax program used this as its tag line — “ABC LL.M. in Taxation  – The Quick and Simple Way to Understand Your Taxes.”  I know my decision of which tax program to attend would certainly have been less agonizing, if I could choose a program where learning taxes was quick and simple.  Well, for those that have yet to embark on their graduate tax journey, you may want to check out the IRS’s new educational website called “Understanding Taxes” –where learning taxes is “quick and simple” and FREE!

There are two links on the Understanding Taxes homepage: One is for teachers that provides an “interactive tax education program for middle school, high school and community college classrooms.”  The other is for students and provides “middle schools, high schools, community colleges, and the general public with a technology-based instructional tool.”  For purposes of this post, I will focus on the Student site.

The Student site provides 38 lessons to students which are divided into two categories: “The Hows of Taxes” and “The Whys of Taxes.”  The lessons under “The Hows of Taxes” section include modules on payroll taxes and federal income tax withholding, wage and tip income, interest income, exemptions, and filing status to name a few.  Each lesson has a set of materials and a skill check (quiz) at the bottom of the lesson in order to test your understanding of the lesson.  For example, Module 1, relating to payroll taxes and federal income tax withholding provides a tutorial lesson, a fact sheet, and a simulation exercise where you attempt to help a retail store manager complete a form W-4.

“The Whys of Taxes” modules relate to various themes such as the history of taxes in the United States, fairness in taxes, and the impact of taxes to name a few.  Within each theme are lessons, which contain activities to help you learn the topic of the lesson and a little quiz to test your understanding.  I assume the IRS is expecting the lowest quiz scores to come from “The Whys of Taxes” lessons.

In addition to the separate “hows” and “whys” categories, you can access the lesson activities, tax tutorials, simulations, and assessments (quizzes) individually, through separate links provided on the Understanding Taxes Student main page.

In the end, I don’t expect “Understanding Taxes” to make US News’ top tax law specialty programs list next year.  However, for tax return preparers needing to brush up on a topic or individuals interested in learning a little something about how taxes affect their lives, Understanding Taxes is a simple and easy.

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iPad is…Tax Return Preparing?

by Joshua on January 10, 2011

Taxsoftware.com announced today that an application that permits a taxpayer to file six of the most often used federal tax returns is now available for purchase for $9.99 for use on Apple’s iPad. According to the press release, the app is the first of its kind.

Further, the app includes unlimited tax preparation and printing. There is an e-filing charge of $4 for an iPad 1040 and a $15 fee for any iPad business return (1041, 1065, 1120, 1120S and 1099-MISC.)

Visit the app’s site here for more information. Finally, by no means does this post mean that I am narrowing the scope of Tax Docket to Apple Products that assist individuals in handling their tax matters (see my previous post Mac App Store Opens Today — With a Useful Estate Planning App?).

Also, if you do get frustrated with the filing of your return or the amount of your refund (or lack thereof) we do not suggest you do what the video below demonstrates.

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10 Tax Hikes Aimed at Small Businesses

by Joshua on August 17, 2010

From Forbes, Tax Hikes Loom For Businesses (slideshow)

Taxes take the top spot on the legislative agenda when Congress returns from its summer recess in September. Lawmakers have said they’ll take up legislation to provide a boost to small businesses and to extend some expiring (or expired) tax breaks. They’re also under pressure to reduce the budget deficit. It’s got to be paid for somehow.

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In IR 2010-64, the Internal Revenue Service recently issued a newly revised payroll tax form that most eligible employers can use to claim the special payroll tax exemption that applies to many new workers hired during 2010.

The Hiring Incentives to Restore Employment (HIRE) Act was designed to encourage employers to hire and retain new workers as well as create a payroll tax exemption and new hire retention credit. The bill was signed by President Obama on March 18.

Employers who hire unemployed workers this year (after Feb. 3, 2010, and before Jan. 1, 2011) may qualify for a 6.2-percent payroll tax incentive, in effect exempting them from the employer’s share of Social Security tax on wages paid to these workers after March 18. This reduction will have no effect on the employee’s future Social Security benefits. The employee’s 6.2 percent share of Social Security tax and the employer and employee’s shares of Medicare tax still apply to all wages.

In addition, for each qualified employee retained for at least a year whose wages did not significantly decrease in the second half of the year, businesses may claim a new hire retention credit of up to $1,000 per worker on their income tax return.

Other Related IRS Resources:

Form 941

Form 941 Instructions

Answers to Frequently Asked Questions

Form W-11 – Hiring Incentives to Restore Employment (HIRE) Act Employee Affidavit

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From the Wall Street Journal:

H&R Block said it will cut 400 jobs and has shut 400 underperforming tax offices as part of a restructuring which the tax preparer said will save up to $150 million a year.

The move comes after another disappointing season for the industry’s leader on the retail side of tax preparation. H&R Block said last month it prepared 4.9% fewer tax returns this tax season than a year earlier despite increases in users of its online filing services.

Improvement in March wasn’t enough to offset the steep declines seen through the end of February. That led H&R Block to say in March it would likely miss its fiscal-year profit goal as the recession and high unemployment lead more people to do their taxes themselves.

The streamlining affects about 3.6% of H&R Block’s retail offices.

President and Chief Executive Russ Smyth said in a competitive environment, it “requires that we narrow our focus and invest in a few key initiatives that will have the greatest impact on attracting and retaining clients in our retail and digital channels, while eliminating other activities and their related costs.”

H&R Block expects a $28 million pretax charge from severance related costs, which will be reported in the fiscal first quarter, which ends July 31. Fourth-quarter results are due June 24.

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In IR 2010-63, the Internal Revenue Service provides information and general guidance to help small businesses determine whether they are eligible for the new health care tax credit under the Affordable Care Act and how large a credit they will receive.

In general, the credit is available to small employers that pay at least half the cost of single coverage for their employees in 2010. The credit is specifically targeted to help small businesses and tax-exempt organizations that primarily employ moderate- and lower-income workers.

Notice 2010-44- The notice provides detailed guidelines and illustrates more than a dozen examples intended to help small employers determine whether they qualify for the credit and estimate the amount of the credit. The notice also requests public comment on issues that should be addressed in future guidance.

Other IRS Resources:

Step-by-Step Guide

Answers to Frequently Asked Questions

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