Tuesday, January 29, 2013
Your Income Tax Refund
The first day of electronic filing will be, Wednesday January 30th 2013, and the Internal Revenue is assuring the taxpayers that they are prepared, except for those few who will require the forms that aren't quite ready. I'm wondering if the Internal Revenue will be able to handle all the returns at one time. It used to start on about the 17th, and it would take 8 to 10 days to get your refund, but that two-week delay means millions will be filing on one day. The IRS computers have been logged jammed in the past with a lessor load.
This year the IRS is giving taxpayers EXPECTED REFUND dates;they are encouraging taxpayers to go to their website" Where is my Refund." The web site will take you through a three stage process: (1) acknowledge that they received your return (2) tell you where the return is in process(3) tell you the exact day your refund should be at your bank or home.
I remember a couple of my friends who wouldn't listen to the amateur financiers and always over withheld by $7000-$9000,so they would get their refund back in late January or early February. Coworkers would tell them that they were giving the IRS an interest-free loan, but those same people were envious when my friends said they were going on vacation once they got their refund. Sure they might have had a few more taxable interest dollars if they would have put that money in the bank, but they were satisfied with their tax planning.
I also had friends who would purposely under withheld and got angry every year when they had to write that check to the IRS. Each year they would write those big checks, and some had penalties because they did not withhold at least 90% of what was due.
I had one friend whose greed led to his gullibility. He bought a tax protester kit for $75, which instructed him to list nine dependants on his Form W4, although he only had one child. Human Resources mailed his signed W4 directly to the IRS as they were supposed to do. One day he was told to go to Human Resource because an IRS agent was on the line. According to his story, Human Resources handed him a new W4 and some papers for his immediate dismissal if he did not.
The Internal Revenue has some egg on their face. They decided that all those who prepared tax returns for a fee had to take a test and become registered. They told the perspective preparers that they had to get a Preparer Tax Identification Number which cost $63(annual renewal) before they could take a $116 test to become a registered tax preparer. Some candidates paid ~ $100 for on line courses to help them prepare for the tests that were held in per-determined larger cities. Starting this January the new registered preparers had to have 15 CPE credits, which would have amounted to about $400 for two courses over the year. Three libertarian tax preparers thought the IRS overstepped their bounds and sued in federal court. Federal judge Boasberg agreed with them citing that the text of the relevant statute does not support what the IRS claims as its authority to regulate tax preparers. The IRS said the preparers who passed the test can keep the title...:-)