Given that tomorrow is Tax Day, we figured you might want to know where all of those tax dollars really go. Almost 70% of all funds go to three programs:
Did you also know that the government spent about 25% more money than it collected in 2013?
Here is a great infographic from the Wall Street Journal:
1) Set up a file (or box) for your 2013 taxes. Put a label on it and drop in your Form W-2 and 1099s as they come in the mail.
2) Open the envelope with your JMF organizer. Please use the organizer as a guide to make sure you have everything that you had last year. The JMF organizer is much shorter this year and it is easy to use. Using the organizer will help us help you save taxes. Please put the organizer in your tax file to give to JMF.
3) If you think you will be getting a refund and you would like your refund direct deposited be sure to note in your organizer if the bank account is the same as last year. If your bank account has changed or we do not have it on file include a void check or check photocopy for the account you would like the refund deposited.
4) Please write down your driver’s license number and the number for your spouse if you are married. The State of Alabama wants us to include your driver’s license numbers in the electronic file to help prevent identity theft.
5) Locate those charitable donation receipts for amounts of $250 or more and put them in that tax file.
6) Take a look in your checkbook to see if you paid the estimates we set up for you last year & make a note of how much & when you paid them.
7) Put March 28, 2014 on your calendar. Please mail or bring your tax documents to your JMF accountant before that date or let us know if you prefer to get an extension.
8) Now is a good time to also start a file for 2014 taxes (you can put those charitable donation receipts in there all year long).
“Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.” Judge Learned Hand – 1934
The Alabama Department of Revenue announced that when taxpayers electronically file 2013 Alabama Forms 40, 40-A or 40 NR, they should include their driver’s license or non-driver’s license number, as well as their date of birth, on their Alabama returns.
This is the department’s latest effort to combat the growing threat of identity theft and fraudulent tax return filings.
State Revenue Commissioner Julie P. Magee said, “It is just one more level of security. Just about every business transaction that is conducted requires some form of personal identification—credit card purchases, banking transactions, etc. Before a tax refund is issued from a taxpayer’s account, it is reasonable for a taxpayer not only to expect, but also to demand that the department takes every precaution that it can to ensure that the refund is a legitimate refund, and not a fraudulent refund issued to an identity thief. This information can be used as a simple, quick validation and will not affect the normal processing of one’s tax return.”
For the complete release, see ADOR’s website: ADOR Working to Offer More Protection from ID Theft and Fraudlent Return Filings
Maximizing your allowable deductions is key to minimizing your tax burden. Check out the JMF Guide to Maximizing Deductions.
Tax breaks can come in the form of tax credits, tax deductions, and just tax-saving laws. At the end of this year (December 31), the congressional Joint Committee on Taxation say 55 of them are about to expire. For the record, there is still a chance for many to be extended. Check out Bankrate.com’s Summary of Expiring Tax Breaks here.
Our Tax Chief Janet Moore is quoted as follows:
Business taxpayers contemplating any major equipment or software additions should consider making the acquisition before year’s end if they have the income to offset it this year, says Janet Moore, CPA, co-manager of the tax department at the Tuscaloosa office of the Alabama accounting firm JamisonMoneyFarmer PC. “We know the deduction amounts for 2013, but there are no guarantees that these larger deductions will be available next year in 2014,” she says.
And on the prospect of major tax reform:
“It may be several years before any major reform can be achieved,” says Moore. “That likely means that extension of many of the temporary tax provisions that were extended for 2012 and 2013 will be delayed until very late in 2014, after tax reform efforts fail.”