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HOW TO TRACK YOUR TAX REFUND

After taxpayers file a return, they can track the status of the refund with the "Where's My Refund?" tool available on the IRS.gov website. New this year, instead of an estimated date, "Where's My Refund?" will give people an actual personalized refund date after the IRS processes the tax return and approves the refund.

"Where's My Refund?" will be available for use after the IRS starts processing tax returns on January 30th. Here are some tips for using "Where's My Refund?' after it is available on January 30th:

• Initial information will generally be available within 24 hours after the IRS receives the taxpayer's e-filed return or four weeks after mailing a paper return.
• The system updates every 24 hours, usually overnight. There is no need to check more than once a day.
• "Where's My Refund?" provides the most accurate and complete information that the IRS has about the refund, so there is no need to call the IRS unless the web tool says to do so.

To use the "Where's My Refund?" tool, taxpayers need to have a copy of their tax return for reference. Taxpayers will need their social security number, filing status and the exact dollar amount of the refund they are expecting.

MOVING OUT OF CALIFORNIA

I am sure you have heard about Mickelson saying publicly about moving from California to a state with no income tax, check out this article on The Wall Street Journal that discusses why California residents are doing just that…moving out

FOR THOSE OF YOU THAT ARE USING INDEPENDENT CONTRACTORS

IRS has extra relief for businesses that misclassified workers as contractors.  The IRS has announced that more businesses can voluntarily fix errors and pay a low penalty. Even if you are being audited you can qualify for this program, as long as the exam isn’t on payroll taxes.  

To be eligible you must have consistently treated the workers in question as contractors and must have given them 1099s for the past three years.  The business must agree to treat the workers as employees for future tax periods.

The penalty is only 1.028% of pay up to the FICA wage base (around $106,000) and 0.324% of pay over the cap.  Businesses use Form 8952 to sign up.

Let us know if you would like more information.

FROM THE DESK OF ERNIE GOSS

I have heard Professor Goss speak many times.  He is a conservative economist and his commentary always seems to hit home.  I thought you might find his December commentary interesting. 

Is U.S. Adopting Europe's Anti-Competitive Economic Policies? Import French Wine, Not Economic Policy

Last week, Francoise Hollande, Socialist President of France, recommended homework be eliminated in French schools. He argued that assigning homework provides an unfair advantage to students with stable home environments. This same type of anti-competitive thinking has produced a social safety net in France and most of Europe that has undermined economic incentives and encouraged workers to remain unemployed or underemployed.   

For example, the World Bank estimates the annual cost of the social safety net as a percent of GDP in France is more than twice the size of that in the U.S. (graph). Not surprisingly over the past decade, France's unemployment rate averaged 2.6 percentage points higher than the U.S. rate, and the Gaullist nation's annual GDP growth was about one-third that of the U.S.    

Unfortunately, the Obama administration's proposed tax increases currently under deliberation by Congress on higher income, higher productivity and more highly educated workers pushes the U.S. in France's direction.  

The top five percent of wage earners, or those earning over $154,000, already pay an average income tax rate 11 times that of the bottom 50 percent of U.S. workers. Not only do Obama's tax rate hikes on the most productive Americans shrink incentives, they reduce the yearly budget deficit by less than 10 percent. Instead of diminishing the income of higher wage workers via elevated taxes, U.S. economic policy should be directed at raising the income of lower income workers. The U.S. should import French wines and movies, not French economic policy.

CENSUS 2012- DO I HAVE TO DO IT?

We have been receiving calls and emails from our clients on whether they are required to participate in the Census Bureau business survey that was just sent out.

Our response: your business is required to participate in Census Bureau business surveys by law (Title 13, United States Code).

 

13 U.S.C. § 221: US Code - Section 221: Refusal or neglect to answer questions; false answers

(a)Whoever, being over eighteen years of age, refuses or willfully neglects, when requested by the Secretary, or by any other authorized officer or employee of the Department of Commerce or bureau or agency thereof acting under the instructions of the Secretary or authorized officer, to answer, to the best of his knowledge, any of the questions on any schedule submitted to him in connection with any census or survey provided for by subchapters I, II, IV, and V of chapter 5 of this title, applying to himself or to the family to which he belongs or is related, or to the farm or farms of which he or his family is the occupant, shall be fined not more than $100.

(b)Whoever, when answering questions described in subsection (a) of this section, and under the conditions or circumstances described in such subsection, willfully gives any answer that is false, shall be fined not more than $500.

(c)Notwithstanding any other provision of this title, no person shall be compelled to disclose information relative to his religious beliefs or to membership in a religious body.

ARE WE MAKING TOO MANY ATTORNEYS?

There are too many law students. The Bureau of Labor Statistics estimates that the economy will create 21,880 new jobs for lawyers annually until 2020. But law schools produce more than 44,000 graduates each year. The Wall Street Journal