What Are the Penalties and Interest for Late Taxes?

Categories: Featured, Personal Finance
What Are the Penalties and Interest for Late Taxes?

You might not have to pay as much as you think, or anything at all

The first thing everyone wants to know when it comes to late taxes is whether they will be charged any penalties and interest. In fact, fear of penalties is enough to keep some people from filing their taxes. But some late filers don’t have to pay any penalties at all. Arming yourself with information can help you make the best decisions when it comes to dealing with your late taxes.

No penalties

If you’re due a refund, you don’t owe the IRS any penalties or interest. That’s right. None. Zippo. Zilch. That means you can file a late return without having to worry about getting… Read more…

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For 2012, Tax Day Is Also Tax Freedom Day

Categories: Featured, Politics, Tax News, Tax Policy
For 2012, Tax Day Is Also Tax Freedom Day

According to the Tax Foundation, the day you have to pay your taxes is also the day you pay off your taxes

This year, in a fitting twist of fate, Tax Day and Tax Freedom Day both arrive on April 17. What is Tax Freedom Day? Don’t worry, it doesn’t involve crazies in tricorn hats carrying posters of President Obama with a Hitler mustache (though trust me, April 17 will see its share of crazy protesters). No, Tax Freedom Day is designated annually by the Tax Foundation as the day that Americans have earned enough income to pay off their tax burden.

Americans will have to work 107 days to pay off the 29.2% of their income that… Read more…

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Can Gambling Losses Be Deducted from Your Tax Return?

Categories: Featured, Personal Finance
Can Gambling Losses Be Deducted from Your Tax Return?

A subway hero explains

The New York City subway system is a scene of many oddities: preteen break dancers spinning on the floor, beggars clanging paper cups full of change, crazies ranting about conspiracy theories, tourists huddled around the map asking directions to Times Square, and commuters whose threshold for weird is so high that they barely raise their eyes from their Kindles.

But tax advice? That’s one of the few things you generally don’t see in Gotham’s labyrinthine tunnels. Last week, however, as I rode home weary from a day of tax writing, the subway tax advice barrier was broken.

A workman – his clothes and work boots scuffed and dirtied by a day of heavy labor – sat… Read more…

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Tax Return Transparency Blues

Categories: Featured, Politics
Tax Return Transparency Blues

Mitt Romney may have released his tax returns, but there’s more than one lesson he can learn from the legacy of George Romney

Just before his South Carolina shellacking by a thrice-resurrected Newt Gingrich, Mitt Romney fielded a question during a debate about whether he would release his tax returns. Romney hemmed and hawed around an actual answer:

“At the very beginning, I indicated that I didn’t have any plans to release my tax returns and then it became clear that that was of great interest to everyone… There was such an interest in tax returns, I said, ‘Okay, I’ll do it.’ Hadn’t planned on doing it, but there’s interest, so I said I will release the tax

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Christie Brinkley Becomes a Tax Rascal

Categories: Entertainment, Featured
Christie Brinkley Becomes a Tax Rascal

The quad married, thrice Sports Illustrated, ex-Mrs. Billy Joel owes half a mill to Uncle Sam

There’s nothing we here at Tax Rascal love more than a celebrity tax scandal to distract us from the Tolstoyean tax drama of Congress. The latest celebrity to get on the IRS’s bad side is Christie Brinkley, the supermodel and former Uptown Girl.

The three-time swimsuit edition cover girl reportedly owes the IRS $531,000 in back taxes. In response, the government agency placed a tax lien against her Long Island home on November 21.

The New York Daily News reports that “the lien is on her address at the toweredRead more…

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Mitt Romney’s Tax Plan is Flat but Not in the Way You’d Think

Categories: Economy, Featured, Politics, Tax Policy
Mitt Romney’s Tax Plan is Flat but Not in the Way You’d Think

Mitt Romney is betting on a boring tax plan to keep him ahead of the pack in 2012

There was a time when tax policy actually had the starring role in the 2012 Republican Presidential race.

That was before Sharon Bialek dolled up for the hungry cameras, while her attention-grubbing attorney punned lamely about “stimulus packages”, and related the tale of citizen Cain slipping a hand up her skirt and pulling her head toward his crotch.

That was also before Rick Perry fumbled the presidential pigskin once again as he let the Department of Energy slip from his addled brain with an epically infantile “Oops”.

All anyone could talk about then were Cain’s 9-9-9Read more…

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Sales Tax / Consumption Tax / FairTax — A Good Idea?

Categories: Uncategorized
Sales Tax / Consumption Tax / FairTax — A Good Idea?

A New York Times editorial by Robert Frank suggests a higher future tax on consumption in order to pay for higher government spending now. He makes a few good points, but seems to miss the larger picture.

  • It is better to tax consumption than savings, because this encourages responsible behavior. As far as the US tax system is concerned, investing in a startup is as economically useful an activity as buying a huge amount of Fritos (the difference being that if your Fritos turn out to be more delicious than you expected, you aren’t hit with a capital gains tax).
  • It’s not a good idea to raise taxes during a recession, even if you plan for the tax

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Tax Cuts Killed the Three-Martini Lunch

Categories: Tax Policy
Tax Cuts Killed the Three-Martini Lunch

Do income tax rates really matter? The intuitive answer is that they must — a higher income tax discourages people from working as hard as they might, but also provides extra funds to the government. Oddly enough, neither of these points are quite true: according to economist Kurt Hauser, government revenue is always about 19.5% of GDP, whether top tax rates are 91% or 28%. Meanwhile, a glance through the list of countries in order of top tax rate shows that there isn’t a strong relationship there, either: economic basketcase Zimbabwe is right next to Australia.

It’s easy to take this information as evidence that tax rates are completely meaningless the long run. But that’s a little hasty.… Read more…

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