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Strategies & Market Trends : Income Taxes and Record Keeping ( tax ) -- Ignore unavailable to you. Want to Upgrade?

To: Susan Saline who wrote (981)	4/15/1998 6:35:00 PM
From: Shawn Donahue	Read Replies (2) \| Respond to of 5810

Anyone else wish we could hurry up and vote in a Flat tax and avoid all this complicated tax filing, especially with the one that I saw with no capital gains tax PERIOD! It sure beats this double reporting of investment capital, and Bill Clintons gift of moving the long term capital gains time requirement out to 18 Months! I realize that alot of CPA's and Tax Filing services like H&R Block are against simplifying our tax filing nightmare, as their income depends on us confused taxpayers needing their help! But, they can do as my CPA does and learn to make money investing in stocks and through owning investment properties...and because of this, he definitely knows how to file taxes for a stock investor! Or better yet, CPA's can become financial planners and actually help us to make money and give us a stock tip once in while:o) Anyway, here is something that I just dug up from the IRS for avoiding the most common filing mistakes: Taxpayer ID Numbers a Common Error By ROB WELLS .c The Associated Press WASHINGTON (AP) - Common stumbling blocks on tax returns this year involve missing or incorrect taxpayer identification numbers, errors on the earned-income credit and the complex new capital-gains rules. When the April 15 filing deadline approaching, the Internal Revenue Service suggested double-checking returns to ensure taxpayer numbers - Social Security numbers in most cases - are listed for the taxpayer, spouse and dependents. A mistaken number was the most-frequent error on returns filed last year and was the second-most-counted mistake on this year's returns filed through February, according to the IRS. A taxpayer without a Social Security number can file a special IRS form W-7 to receive an IRS-issued taxpayer identification number. These identification numbers must be listed for children or spouses in order to qualify for certain tax benefits, such as the earned-income credit for low-income families or the child-care credit. A child's name and number most be listed on the child-care-credit form this year. The IRS cited 2.5 million cases last year in which the taxpayer identification number was missing or didn't match the agency's records. In such cases, the IRS removed the credit or exemption claimed on the tax form, which can lead to a lower refund. Carol Thompson, a tax specialist in Monterey, Calif., said accuracy of taxpayer numbers is particularly critical for electronically filed returns. Some are being rejected because women failed to notify the Social Security Administration of a name change after marriage. ''People have to be much more careful to be sure things are accurate,'' Thompson said. Another problem involves confusion over the new capital-gains rules, said Thompson, an enrolled agent licensed to represent taxpayers before the IRS. The 1997 tax law cut the maximum capital-gains rate from 28 percent to 20 percent, but tricky transition rules apply. The new lower rates apply for asset sales after May 7, 1997; prior sales are subject to the higher capital-gains rate. The most common error this year involves the earned-income credit, according to the IRS. This benefit is available to taxpayers whose incomes are under $25,760 and with have one child that qualifies under the rules. For two or more children, the income limit is $29,290. A common error among recipients of the credit is failing to calculate housing allowances or contributions to retirement plans, such as 401(k) plans, into their nontaxable earned income. Other errors arise in figuring the refund or balance due and obtaining the correct tax from the tax table. The IRS will have 150 offices in major cities open today from 9 a.m. to 3 p.m. local time to handle tax questions in person. In addition, taxpayers can check the following services: Toll-free telephone service: 1-800-829-1040 Internet: irs.ustreas.gov Tax forms by fax: 703-368-9694 I hope this helps, Shawn PS: PLEASE VOTE FOR A FLAT TAX SO WE CAN SOMEDAY NOT LOSE SLEEP AND DREAD THE 15th of April:-)I bet filing that postcard size Flat tax form would cut down on the dreaded IRS AUDIT!