Tax News

A warning about a new tax scam was sent out by the Internal Revenue Service.  The scam uses a website that mimics the IRS e-Services online registration page. The phony web page looks almost identical to the real page.

Criminals are using these sites to lure people into providing personal and financial information that could potentially be used to steal money or an identity.

The official website address of the IRS is www.irs.gov. Do not be misled by sites claiming to be the IRS but end .com, .net, .org.

If you find a suspicious website that claims to be the IRS, send the site’s URL by email to phishing@irs.gov. Use the subject line, ‘Suspicious website’.

Be aware that the IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels.

If you get an unsolicited email that appears to be from the IRS, report it by sending it to phishing@irs.gov.

The IRS has information at www.irs.gov that can help you protect yourself from tax scams of all kinds. Search the site using the term “phishing.”

Call and make an appointment with us at 401-254-0151 to find out how we can better protect you.  We look forward to hearing from you.

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Despite which party wins the presidential election in November or what tax changes Congress comes up with, there will most likely be an increase in tax bills after January 1.

This will affect about 160 million American wage earners in the New Year.

When the Payroll tax ends, there will be less income in families’ paychecks.  In 2013, this tax increase would be about $95 billion.

According to independent analysts, the termination of this tax cut could decrease the economic output as much as a percentage point and cause a loss of close to one million jobs for 2013.  Due to the lower tax, typical families’ had an additional income of $1,000.

There is little desire to make an extension for this Payroll Tax in order to avoid tax increases and spending cuts at the start of January 2013.  So far, the White House has not tried to extend the temporary tax cut.  This is because Congress needs the money and believes that economy will be able to stand without and extension of the tax holiday.  The tax holiday was originally created to encourage consumer spending and help middle-income families.

When the tax holiday was passed, Republicans were opposed to because it would take from the Social Security program.  Although Democrats supported the tax holiday when it passed, they are not enthusiastic about it any longer.  Support from the Republicans and Democrats is lacking; both parties would rather focus on the future of the Bush-era tax cuts and decrease the risk of pushing the country into recession due to tax increases and spending cuts next year.

The taxes of millions of middle-class families will increase due to the termination of the payroll tax cut.  Estimated by the Federal Reserve, next year the economy will grow 2.5 to 3 percent and the unemployment rate will increase from 7.6 to 7.9 percent.

In 2012, the payroll tax holiday decreased taxes on workers’ wages up to $110,100.  This was a tax cut of $700 for a person making $35,000 a year and a tax cut of $2,202 for a person making $110,100 and above.

With accordance to the current law, the Congressional Budget Office calculated the national debt would decrease by more than half a trillion dollars from 2012 to 2013.  Fortunately, the debt of the country would decrease by $221 billion with the termination of the Bush Tax cuts and other provisions.

To discover how we can help you with tax preparation services, please give us a call at 401.254.0151. We look forward to hearing from you.

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NOTE: This headliner is current through the publication date. Since changes may have occurred after the publication date that would affect the accuracy of this document, no guarantees are made concerning the technical accuracy after the publication date.

Individual Retirement Arrangement (IRA) Resource Guide for Small Business Owners and Individuals is Now Available

The IRS announces the release of the Individual Retirement Arrangement (IRA) Resource Guide for Small Business Owners and Individuals. This handy interactive CD contains rules for traditional and Roth IRAs as well as SEP, SIMPLE IRA and SARSEP plans.

In addition, the CD provides an abundance of other helpful information such as:

• IRS publications and forms and helpful federal websites
• Investing your IRA
• Calculator to provide a ballpark estimate of the amount needed at retirement
• Video clips, including “man on the street” interviews, on planning for retirement and maintaining an IRA and IRA-funded plan
• Frequently asked questions
• Research material

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