To file or not to file

For some individuals, the same question arises each year: "Do I need to file a tax return?"

If you or someone you know is wondering if they need to file, you can find out quickly by completing an interactive online questionnaire at: http://www.irs.gov/individuals/article/0,,id=96623,00.html

California provides its own online questionnaire at: http://www.ftb.ca.gov/individuals/FileRtn/index.shtml

Patience Is Key For The 2008 Tax Year

We've gotten used to last minute tax law changes over the past several years. Most bills pass and are signed by the president in November and December each year. Tax year 2008 definitely takes the cake though! As of February 6, 2009, many individual and business federal forms for tax year 2008 have still not been released as FINAL by the IRS. Currently, many common forms are projected to be released by the IRS on February 17, 2009. We're keeping our fingers crossed here at TY that they'll be finalized sooner than later! As Congress and the president iron out details of this week's stimulus bill, some tax law changes may be retroactive and impact the 2008 tax year, causing the related tax forms to change again. For taxpayers who may benefit from the upcoming stimulus bill, it makes sense for Taxpayers to wait to file 2008 tax returns in order to take advantage of new tax breaks. Stay tuned for updates as we receive them!

Accounting and Bookkeeping Firms Working Together

As most of you know, ThomasYork has acquired Martins Accounting and Management Services. Below is a link to an article that highlights how accounting firms and bookkeeping firms are working together to provide accurate client data. Click here to read the article: http://www.latimes.com/business/la-fi-smalltax2-2009feb02,0,7743558.story

Top 400 Individual Returns

The IRS released statistics from the "Top 400 Individual Tax Returns" for 15 years (1992-2006). The Top 400 is a changing group of taxpayers, as most taxpayers are not in the Top 400 more than once or twice. Averages of the Top 400 returns for 2006 were:

• Adjusted Gross Income = $263 million
• Total Itemized Deductions = $41 million
• Taxable Income = $222 million
• Income Tax = $45 million

In 2006, individuals in the Top 400:

• Represented 0.0003% of all individual returns filed
• Reported 1.59% of all taxable income
• Paid 1.77% of all income tax

The complete report is available at http://www.irs.gov/taxstats/article/0,,id=203102,00.html.

Tax Trouble for Obama Nominees

From today's New York Times: "In just a couple of hours on Tuesday, two high-level nominees for jobs in the Obama administration took themselves out of the running because of tax problems that they could have avoided... Now that President Obama has lost a couple of nominees to tax errors, maybe he’ll consider the possibility of finally simplifying the tax code. " ("How to Avoid a Tom Daschle Tax Problem," Ron Lieber) For the complete article, see http://www.nytimes.com/2009/02/04/your-money/04money.html?_r=1

What If ?

The economic downturn has many of us asking: "What if...?" Changes in your financial situation -- such as job loss, debt forgiveness, or tapping a retirement fund -- can have significant tax consequences. The IRS published a list of answers to some of the tax questions people are asking. One such question: "What if I can't pay my taxes?" Answer: You should still file your return by the deadline to avoid late filing penalties and interest. Contact the IRS to discuss your payment options, and the agency may be able to provide some relief such as a short-term extension to pay, an installment agreement or an offer in compromise. To view all the "What ifs," please visit http://www.irs.gov/newsroom/article/0,,id=201853,00.html