The IRS commissioner has a vision. No space aliens or fluffy unicorns involved.

Doug Schulman opens the aperture wide on the future of the tax system.

IRS commissioner Doug Schulman’s annual speech at the National Press Club a week ago was substantively bolder than last year’s somewhat defensive plea on behalf of the IRS’s commitment to service as opposed to mere enforcement. This time around, he proposed no less than to, in his words, “open the aperture wide” and offer a view of our quickly evolving tax system that “takes us to its very horizon”.

The commissioner was quick to point out that he did not intend to peddle in the kind of science fiction that would befit a Worlds of Tomorrow anthology but instead to present a vision of the future grounded in the recent developments in tax processing that modern technology has made possible. It was an engaging performance, bolstered by a challenging proposal that, we suspect, will not escape controversy.

The goal of the IRS in Schulman’s take is to move beyond what he calls the “looking back” business model which, according to the commissioner, has governed the agency’s operations since its creation during the Civil War, above all when it deals with matters of tax compliance. Continue reading “The IRS commissioner has a vision. No space aliens or fluffy unicorns involved.”

Double-check Checklist

Before you guffaw and navigate away, listen to this: the list below is created from the IRS’s list of most common (and sometimes, expensive) yearly filing mistakes. Our list is meant to be a simple catalog of things to double-check before you lick the stamp or mouse-over the “send” button on your tax filing.

If your eyes are straining from rolling too much, we suggest you simply bookmark this page for the final seconds prior to your sending off for your return. Why?

The IRS charges 6% interest and up to a 20% penalty for incorrect filings. A double-check can save you tons of time, and possibly, tons of money.

  • Did you include your W-2?

Obviously this won’t be a problem for e-filings, but for our snailmail brothers and sisters, it’s one of the most-repeated mistakes.

  • Did you write the correct social security number?

Go over your return and see if you didn’t forget a digit, or mix your wife’s with your own. It’s a silly mistake that can cost you time or money (or both), and the IRS says it’s the number-one “whoops” mistake.

  • Did you file under the correct status?

Easy to slip up on this one if you’re recently married or separated. Same level of “whoops” in the IRS mistake list.

  • Did you claim new home credits too early?

You must have closed escrow by January 1, 2010. Anything after that has to wait for next year. Sorry.

  • Did you report all your income?

No problem for anyone who’s worked at the same job for umpteen years, but if you’ve been floating about doing work for multiple employers (or, gulp, a now-defunct business), it can be tough to keep track of all the W-2s you’re owed.

  • Did you report all your charitable giving?

If you’re just starting now, it’s a little late, but make sure you keep receipts for anything and everything you give away to charitable organizations. Anything valued over $200 has to have a corresponding receipt. If the IRS comes-a-auditing, be prepared to whip out your receipt logs, or you’ll have an uncomfortable amount of ‘splainin’ to do.

  • Did you report all your mileage?

Same as your charitable giving, above. Make sure you keep an immaculate log. Again, the IRS expects you to keep your records for at least five years, and they’ll expect you to have those records ready for display whenever they’d like a closer look.

  • Are you sure your “dependent” is actually a dependent?

Visit the IRS’s website and make darn sure your hanger-on qualifies as a dependent.

If this list saves just one person a week’s worth of waiting for a much-needed return, then our post will have been worth the effort!

Considering a tax preparer this year?

Before you pay someone to do your taxes for you here’s some federal income tax advice to remember before you pull the trigger.

  • Complaints about tax preparers were up 80% in five years. This includes complaints for things like late filing, missing W-2s, base inaccuracies, or completely missing or lost filings. The solution is to get help with your filing from a service like RapidTax. You get 24-hour help if you’ve any questions, and you know for a fact that it was sent in on time.

Continue reading “Considering a tax preparer this year?”