The Internal Revenue Service of the United States(IRS) made the announcement this past week that the season for filing taxes will not begin until January 30th. They are not going to start any processing of individual tax returns until that date.
The IRS had originally announced January 22nd as the date they would be opening tax filing. The reason for the bump back in the date is the changes in the tax law that congress passed on New Year’s Day. This all had to do with the “fiscal cliff” negotiations between house Republicans and the president.
At the current time, the IRS is finishing their testing and programming of their processing systems while also updating their forms. These updates according to the IRS are going to allow the majority of the tax filers to be able to file their returns beginning January 30. Those who require any more obscure types of forms for issues such as general business credits, depreciation of property or energy credit claims to name a few will find that the updating of the processing systems and forms will probably allow them to file toward the end of February or the beginning of March.
Steven Miller who is currently serving as the acting commissioner of the Internal Revenue Service has gone out of his way to reassure the public that all efforts are being made to get the process up to full speed.
The IRS has also stated that before January 30th even paper returns will not be processed and advises the public that electronic returns do in fact speed the process and make for faster refunds to the public. They also point out that last year the percentage filing electronically surpassed 80%.
The bottom line as Mr. Miller reminds the public is that electronic filing is truly the best choice for the taxpayer to make in terms of getting things done efficiently and quickly.
The President has claimed that the Tuesday night fiscal cliff deal will reduce middle class taxes in America. However, taxes for most Americans will increase in 2013. The tax relief that has been built into the package will add nearly $4 trillion per year for the next 10 years to the existing $16 trillion debt. The fiscal cliff deal passed by the Senate and the Congress will not stop the Social Security payroll tax cut from expiring. This means that more than 75 percent of American households will face a higher federal tax liability in 2013.
Tax Policy Center’s analysis indicates that families with annual income between $40,000 and $50,000 will have to pay $579 extra middle class taxes in 2013. For those earning between $50,000 and $75,000, the liability will increase by $822. Individuals earning more will have to shell out higher taxes. The Bush era tax rates for individuals earning less than $400,000 and couples earning less than $450,000 have been extended. Those earning more will pay tax at a higher rate.
The highest tax rate will increase from 35 percent to 39.6 percent. Those who fall in the highest tax bracket will have to pay a higher rate of investment taxes at 20 percent. Obama’s health care law could also increase the tax outflow of high income families. Investments of individuals earning more than $200,000 per year and couples earning more than $230,000 per year will attract a new 3.8 percent tax.
According to Tax Policy Center, families with annual income between $500,000 and $1 million will have to pay $14,812 extra tax in 2013. Those earning more than $1 million will have to shell out an additional $170,341. Obama tried very hard to include the payroll tax cut for 2011 and wanted to extend it through 2012. However, Democrats and Republicans were not keen and both agreed to let the cut expire.
Wages as high as $113,700 pay a 12.4 percent Social Security tax. Employers pay half and workers pay the other half. The latter’s share was cut from 6.2 percent to 4.2 percent for 2011 and 2012. This will result in middle class taxes savings of about $1000 a year.
The fiscal cliff Congressional battles have just begun. Over the next few weeks, fiscal cliff agreements relating to debt ceiling and automatic spending cuts affecting the Pentagon will be hammered out. Democrats will continue to push for tax hikes while Republicans will demand spending cuts and entitlement reforms.
Lost in the politically generated issue of Mitt Romney’s taxes is the issue of Harry Reid and his own tax information. Harry Reid has jumped up and donned a fool’s mantle once again, and this time with a wild claim by an anonymous source, that Mitt Romney has not paid taxes for the last ten years. Less ridiculous would be if Reid held a press conference to say that he has spotted UFOs in the Nevada skies. Harry Reid is accustomed to playing with fire and getting burned, but the Nevada Democrat cannot seem to stop picking up matches and lighters.
Now the Republican party is attacking Reid, with Republican Party Chairman, Reince Priebus, saying that Reid was a dirty liar, and Republican Senator Lindsey Graham saying that Reid is making things up. On top of that is a rising murmur among conservatives that Harry Reid should release his own tax records before he accuses other people. Reid has said that he does not make much money as a senator, but the records are released each year. This is false on two fronts. As of 2010, Harry Reid was listed as being worth ten-million dollars. While certain financial records of his are released each year, those are the cherry-picked records. Reid has never had a full tax disclosure, and refuses to release all of his records to this day.
Any person possessing common sense would know that anybody with the kind of fortune that Mitt Romney has would be swarmed by the IRS at the first hint of impropriety. The Democrats ask a simple question which sounds logical at first blush. They want to know if Romney has nothing to hide, then why will he not release his tax records. It would be interesting if Mitt Romney were to call a press conference and declare that one of Harry Reid’s mistresses has said that she has witnessed Reid beating his wife on numerous occasions. He could add that the mistress will not identify herself, but if Reid is not a wife beater, he should come forward and prove it. Of course the reason Romney does not release his records is that if those records found their ways into the Democrats’ desperate paws, they would be able to twist the numbers in any creative way they wanted to suit their purposes. Harry Reid’s spokesman, Adam Jentleson recently said that this tax issue is the biggest issue of the campaign. Given the state of his party’s jobs record, he had better hope so.
Rich Santorum won the Iowa caucuses and has positioned himself as a front-runner. One candidate surges ahead and then dramatically drops down in the polls. The American voter appears uncertain when it comes to choosing a candidate for the GOP nomination. The Santorum 2012 taxes and overall tax plan require closer attention. The United States deficit and rising unemployment continue to be the hot topics in this race.
The Santorum tax plan it is estimated would cut taxes by one-trillion by 2015. A higher the deficit the will lower the value of the American dollar. He promises to cut taxes for individuals making forty-thousand or more a year. His plan would increase the overall spending power of the average American, by increasing their incomes by lowering their tax rates. His plan would create two tax brackets of ten percent and twenty percent. He would lower capital gains taxes to twelve percent from fifteen percent and increase the child exemption for individuals threefold. The biggest tax breaks would go to corporations that would pay around seventeen and a half percent, which is half of what they currently pay. Companies based in the United State would not be required to pay any taxes. This tax measure allegedly would encourage companies to invest in home based industries.
Santorum’s tax plan is designed to increase the nation’s economic growth, but it is based on systems that have not reduced the deficit or increased employment. Giving Companies substantial tax cuts and incentives has not reduced the deficit, or created more jobs. The nation deserves a better tax plan.