This just in...The IRS is officially accepting e files beginning on the very late date of January 22nd. This is about a working week later than last year. They are also advising that it will take 21 days to get refunds. Last year, the IRS refund cycle chart ran in about a 14 day window. With W2, investment, banking and mortgage statements arriving earlier and earlier, this is going against the trend trend of tax payers wanting to get their taxes preparered earlier and earlier. Tax Accountants beware. Warn your early filers to delay those kitchen remodel projects they want to start on when their refund is received. I susspect the IRS opening later due to last years big software bug that delayed initial refunds by up to 3 weeks. Additionally, I suspect they are doing this because they intend to pull aside for additional inspection a great percentage of returns this year than last.
Every year we teach a 60-hour tax certifcation course required to become a certified tax preparer in the state of California. I was just re-reviewing all the Bush tax law changes that would revert back if our illustrious leaders can't come to a compromise soon. The Bush tax law changes basically rolled back rates by 2% for each tax bracket for you and me. It also eliminated the so called marriage-tax-penalty for married filers that don't itemize. It reduced capital gains rates and taxes on dividends. So if these expire, we are all pretty much going to feel at least a 2% hit on our take-home pay.
I use to think it was right that taxes on dividends should be minimized due to earnings already being taxed at the corporate level. Then I did some reading on just how many major US corporations don't pay any taxes at all. So I've changed my mind in the spirit of compromise. Somewhere these earnings need to be taxed, if not at the corporate level than to those investors that benefit from dividends being passed through to them.
And how 'bout Costco deciding to deliver its dividend n December?! If more corporations dedide to do that, we might end up receiving the benefit of a different sort of economic stimulus.
An associate mentioned to me that he went to 5 different CPAs (Certified Public Accountant) before he found one he liked! Really? 5? Your tax accountant is part of your "life" team. You need to feel comfortable calling them up and asking them questions about anything....not just tax stuff. At Liberty Tax, we believe when you have finished your consultation with a new client, they need to feel like you all could watch the Super Bowl together and have a few beers and maybe some chips and dip. Do you feel like that? If not, you might need to change the tax accountant you have on your "life" team!--Tax Trish