Tax Strategies

Children with investment income may have part or all of this income taxed at their parent’s tax rate rather than at the child’s rate, according to the IRS.

A former tax return preparer who worked from an office at a local gym has been sentenced to 24 months in prison for preparing false tax returns for customers.

During his Fiscal Responsibility Summit on Monday, President Barack Obama discussed the possibility of lowering the statutory corporate tax rate while also closing tax loopholes that allow companies to reduce taxes.

This past year has produced an unprecedented amount of new tax legislation and regulations affecting preparers and taxpayers.

Congressional leaders are looking to clamp down on offshore tax havens after a Government Accountability Office report found that 83 of the 100 largest publicly traded U.S. corporations have subsidiaries in jurisdictions listed as tax havens or financial privacy jurisdictions, while 63 of the 100 largest publicly traded federal contractors reported having subsidiaries in such jurisdictions.

When every dollar counts a bit more dearly, a greater number of taxpayers are taking a closer look at ways to improve cash flow. Increasing (or at least accelerating) tax refunds for past years while lowering estimated tax and withholding payments for this year are two areas of growing interest.On the refund side of the ledger, a variety of elections and decisions still to be made on 2008 returns can affect the size of a refund, either of 2008 tax payments or of prior years' under loss-carryback rules. Accelerating refunds, whether or not they are already set in stone, also can improve a taxpayer's immediate cash flow.

The Internal Revenue Service has published new tax-withholding tables as a result of the economic stimulus bill that should give most workers a bigger paycheck this spring.

President Barack Obama is expected to release his budget proposal this week, and he reportedly plans to include tax increases to close the deficit.

Many of the Internal Revenue Service’s plans to protect its employees and provide service to taxpayers during and after a major disruption are not up to date, have not been adequately tested and do not contain sufficient detail to be effective, warned a government watchdog.

National Taxpayer Advocate Nina E. Olson urged Congress to simplify the U.S. Tax Code and recommended measures to reduce the burden on taxpayers who are struggling to pay their bills.In the first of this year's two required reports to Congress, she designated the complexity of the Tax Code as the most serious problem facing taxpayers. According to data compiled by her office, U.S. taxpayers and businesses spend about 7.6 billion hours a year complying with tax-filing requirements. "If tax compliance were an industry, it would be one of the largest in the United States," she said in her report. "To consume 7.6 billion hours, the tax industry requires the equivalent of 3.8 million full-time workers."