We've got a few updates from tax land for you. Things are very busy here at the office, but the end is in sight. Don't wait until the 14th to call your tax man!
IRS Cracks Down on Businesses Using Independent Contractor Status Improperly. This from CNN:
If your business uses independent contractors, get ready for new scrutiny. Hoping to boost tax revenue, the IRS and many state governments are cracking down on how companies classify their workers.
When employers report wages for independent contractors on IRS form 1099, rather than a W-2, they aren't required to pay unemployment insurance, worker's compensation insurance or payroll taxes for them. But the rules governing which workers are genuinely "independent" are strict -- and often flouted.
The Internal Revenue Service launched a program last month that will randomly examine 6,000 companies over the next three years for employee misclassifications. The federal government estimates it will raise $7 billion over the next 10 through tighter enforcement.
Most Americans want higher taxes for the rich, but no reduction in entitlements. This from a Quinnipiac University poll, reported by Reuters:
The Quinnipiac University poll found that 60 percent of Americans among both major political parties think raising income taxes on households making more than $250,000 should be a main tenet of the government's efforts to tame the deficit. More than 70 percent, including a majority of Republicans, say those making more than $1 million should pay more.
But 80 percent say raising taxes on those making less than that should not be part of the government's approach. Moreover, most oppose touching Medicare and Social Security - two long-term drivers of the budget deficit over the coming decades.
Got the homebuyers credit? Don't sell your house too soon. The IRS will be policing the public datbases of real estate sales, seeking to recapture the home buyers credit. If a person buys a home between 1/1/09 and 4/30/10 and sells within three years, the tax credit is recaptured.