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IRS Speeds up Rebate Schedule The IRS will issue payments of up to $600 ($1,200 for married couples) plus $300 for eligible children younger than 17, throughout the spring and summer. The first wave of payments will go to people who opted for direct deposit on their 2007 income tax returns. "People who chose direct deposit will receive their economic stimulus payments the quickest," IRS Commissioner Doug Shulman said. "We know there are many people who are eligible for an economic stimulus payment who have not filed a tax return. If you think you may be eligible, even if you don't normally file a tax return, please check it out. And, use direct deposit to get your payment faster." Whether a taxpayer opted for direct deposit determines how soon the payment will arrive. The first cycle of paper checks will be mailed starting May 9. Even people who normally do not have a filing requirement may be eligible for the stimulus payment. People who have no filing requirement must have at least $3,000 in qualifying income. Qualifying income includes any combination of earned income, nontaxable combat pay they elect to include in earned income and certain payments from Social Security, Veterans Affairs and Railroad Retirement. People with at least $3,000 in qualifying income may qualify for an economic stimulus payment of $300 ($600 for married couples) plus the $300 per qualifying child payment. However, they must file a 2007 income tax return by Oct. 15, 2008, to receive a stimulus payment. They can use the simple Form 1040A and provide basic information. Form 1040A is available on IRS.gov, the official IRS Web site. The payment schedule announced earlier this year is for people who filed early enough to have their tax returns processed by April 15. People who did not submit a return in time for it to be processed by April 15 may see their stimulus payments later than the scheduled dates. Below are the schedules for economic stimulus payments related to tax returns processed by April 15, 2008: Stimulus Payment Schedule for Tax Returns Direct Deposit payments
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Some taxpayers may receive smaller economic stimulus payments than they anticipated. By law, the stimulus payments are offset to satisfy past-due taxes, student loans, child support and certain other debts.
The Board adopted Rule 3526 to enhance communication between audit committees and registered firms regarding the firm's independence. Rule 3526 will require a registered public accounting firm, before accepting an initial engagement pursuant to the standards of the PCAOB, to describe in writing to the audit committee all relationships between the firm or any of its affiliates and the issuer or persons in a financial reporting oversight role at the issuer that may reasonably be thought to bear on the firm's independence. Registered firms will also be required to discuss with the audit committee the potential effects of any such relationships on the firm's independence. Rule 3526 will require firms to make a similar communication annually for continuing engagements. If approved by the Securities and Exchange Commission (SEC), Rule 3526 will supersede the Board's interim independence requirement, Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees, and two related interpretations. The Board also adopted an amendment to Rule 3523, Tax Services for Persons in Financial Reporting Oversight Roles (.PDF). The amendment excludes from the scope of the rule tax services provided during the portion of the audit period that precedes the beginning of the professional engagement period. As originally adopted by the Board, the rule provided that a registered public accounting firm is not independent of its audit client if it or any of its affiliates provides any tax service to a person in a financial reporting oversight role or an immediate family member of such a person during the audit and professional engagement period. The Board determined that providing tax services to such a person during the portion of the audit period preceding the beginning of the professional engagement period does not necessarily impair a firm's independence. Chairman Mark W. Olson stated that these two actions, "touch on the crucial area of auditor independence, which the PCAOB strongly supports as a key component to audit quality. Rule 3526, in particular, reflects the critical role of the audit committee under the Sarbanes-Oxley Act. The PCAOB understands the importance of audit committee members obtaining the information they need to assess the independence of prospective or current auditors." Additionally, Tom Ray, PCAOB Chief Auditor, stated that, "By adopting the amendment to Rule 3523, together with the strengthened responsibility for the auditor to communicate critical information about auditor independence to the audit committee, the Board reduced the likelihood that a company's choice of auditor will be unnecessarily restricted." The Board further adjusted the implementation schedule for Rule 3523 as it applies to tax services provided during the audit period to allow the SEC sufficient time to consider whether to approve the amendment to Rule 3523. Specifically, the Board will not apply Rule 3523 to tax services provided on or before December 31, 2008, when those services are provided during the audit period and are completed before the professional engagement period begins. Rule 3526, if approved by the SEC, will become effective on the later of September 30, 2008, or 30 days after SEC approval. The amendment to Rule 3523 will become effective immediately if approved by the SEC.
One of the biggest challenges faced by people starting out in business is understanding and meeting their tax filing requirements," said Kathy Petronchak, commissioner of the IRS's Small Business/Self-Employed operating division. "It's a new, different and potentially overwhelming experience for them. We want new small business owners to know that the IRS has resources to help them learn about their federal tax responsibilities and avoid common pitfalls." The campaign will provide new Schedule C, Profit or Loss from Business, filers with improved and updated educational materials through a variety of channels, including IRS.gov, small business workshops and other outreach events. Schedule C is filed by sole proprietors (one-owner businesses) as an attachment to their Form 1040 individual income tax return. Self-employed individuals with less complex situations – including business expenses of less than $5,000, no net losses and no employees – may be able to file Schedule C-EZ, Net Profit for Business. About one in seven federal income tax returns includes a Schedule C or Schedule C-EZ. Taxpayers filed over 21 million Schedules C for tax year 2006, reporting overall net profits from sole proprietorships totaling more than $269 billion. In this introductory phase of the campaign, IRS is offering some basic tips to avoid potential problems:
The first event in the campaign is a free national phone forum, "Calling All First Time Schedule C Filers, on May 21. It will focus on common pitfalls for new small businesses to avoid.
Their bill would require the IRS to allow all Americans to file their returns electronically at no charge. The senators say this would save taxpayers roughly $1.2 billion a year. It would also save the IRS, which says it costs 30 cents to process an electronic return, but $2.50 to process a paper return. "The bottom line is that the IRS is imposing an additional 'tax' on people paying their taxes," Schumer said, according to E-Commerce Times. "The current system forces millions of Americans to pay a fee for the 'privilege' of filing their taxes, even though e-filing is cheaper for the IRS to process." The IRS estimates 62 percent of taxpayers file electronically. Filers who make less than $52,000 a year can e-file for free. Filers who make more than that must use a third-party preparer. Intuit, which makes Quicken and Turbo Tax, could lose millions in annual revenues. Congress pushed electronic filing along 10 years ago, by forcing the IRS to allow electronic filing of federal income taxes. Congress set a goal that 80 percent of returns would be filed electronically by 2007. The fees are holding the IRS back from meeting that goal, Schumer said. The senators would like the IRS to offer direct e-filing, called I-File, rather than going through a third party. The Computer & Communications Industry Association, whose members include Intuit, oppose the idea. "As long as the private sector continues to offer outstanding online tax preparation software - at a competitive price to those who buy it - and for free for the majority of Americans through Free File, there truly doesn't seem to be any sense or benefit in implementing an I-File system," said CCIA President and CEO Ed Black.
Geezeo.com is combining social networking with free, online Web tools. Users can access their accounts through their cell phones using text messaging, and talk about money issues in discussion groups. Some even use Geezeo's online confessional. One woman said she's $30,000 in debt and her husband has no idea. Another said he overpaid his credit card bill by $500. A 28-year-old said she's got $300,000 in savings that she keeps secret. A Boston University student said his budget is telling him that, "One more night out might be one more too many." "It comes from the whole MySpace generation. Once people become comfortable being social online, it extends into other areas, such as personal finance," Ryan Williams told the Washington Post. Williams is co-founder of NetworthIQ, which allows people to publicly keep track of their assets. Peter Glyman, who co-founded Geezeo about a year ago, said people in their 20s and 30s are "detached from their money" because they are so accustomed to using debit and credit cards. "They're not balancing a checkbook, which in some ways forces people to look more closely at their finances. It creates a problem for the consumer in that they're becoming further removed, but it allowed products like ours to get them closer." The goal of Geezeo is to help users make smarter financial decisions. Wesabe.com is another personal finance site that encourages sharing among members. Buxfer.com and BillMonk.com help keep running tallies of shared expenses among college roommates, friends, or family members. Networth IQ allows users to go public with their general net-worth statistics so they can make comparisons. Jim Bruene, editor of Online Banking Report, expects 2 million households to use these sites by the end of next year, with 16 million using them in 10 years, The Wall Street Journal reported. Geezeo just got a big boost from TheStreet.com, which invested $1.2 million for a 13 percent stake in the company, which is based in Framingham, Mass. Discussion groups cover financial goals, such as paying off credit cards, buying a house, accumulating an emergency fund, buying a car, or reducing student loans. Tools make it easy to track where your money is going because Geezeo "tags" transactions and puts them into categories. Financial planners like the openness, but urge caution. "What I always tell people before you take someone else's advice: Make sure you know what qualifies them to give you the advice," said Karen Schaeffer, president of Schaeffer Financial of Rockville, MD.
SBE Council President & CEO Karen Kerrigan said, "Entrepreneurs and small businesses have to struggle every day with the costs of taxation, which affect a wide array of decisions, including hiring, investment, expansion, and location. While the federal tax burden and the complexity of that system is quite heavy, state and local taxes can add significantly to that load. The 'Business Tax Index' captures these costs, and provides businesses, investors, and political leaders with a measurement of how the states stack up against each other in this regard." You can read the full report and visit the "Business Tax Index 2008" state interactive map. Follow the above link and look for the "Business Tax Index 2008" image on the right hand side of the main page to access the full report, summary, and nationwide map of individual state rankings. SBE Council's "Business Tax Index 2008" pulls together 16 different tax measures, and combines those into one tax score that allows the 50 states and District of Columbia to be compared. Among the taxes included are income, property, death/inheritance, unemployment, and various consumption-based taxes, including state gas and diesel levies. According to the "Business Tax Index 2008," the 15 BEST state tax systems are: 1) South Dakota, 2) Nevada, 3) Wyoming, 4) Washington, 5) Florida, 6) Alaska, 7) Texas, 8) Colorado, 9) Alabama, 10) Mississippi, 11) South Carolina, 12) Tennessee, 13) Missouri, 14) Ohio, and 15) Virginia. The 15 WORST state tax systems are: 37) North Carolina, 38) Nebraska, 39) West Virginia, 40) Hawaii, 41) Idaho, 42) Vermont, 43) Massachusetts, 44) New York, 45) Rhode Island, 46) Maine, 47) Iowa, 48) California, 49) Minnesota, 50) New Jersey, and 51) District of Columbia. Raymond J. Keating, chief economist for SBE Council and author of the report, wrote: "In the end, taxes matter. They matter at the federal, state, and local levels of government. They matter to consumers, entrepreneurs, investors, and businesses. They matter in terms of a state's competitiveness. And they matter when it comes to economic growth and job creation." Copyright
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