The wish of one and many is that this New Year will bring happiness and changes for a better future. Changes will definitely take place and these will set apart 2012 from the last year. Everyone wants to see substantial changes in their financial on-goings and hopes for a prosperous year. Talking in the context of financial origins, tax plays an important role. In one way it is the source of revenue for the government and in the other, it is a reason for panic and stress for taxpayers who have to let go of a substantial amount of their income when they submit their tax returns. One must take proper notice of the changes that the IRS has promised to bring into effect this year. Being aware of tax payment conditions will save you from paying penalty or a heavy fine and also you can avoid being audited.
Know About the Changes:
1. The first change that needs everybody’s attention is that the final date for tax submission has been postponed to April 17 rather than on the earlier date of April 16 due to the Emancipation Day holiday in DC. The deadline is applicable to all including tax submissions, tax payments, and IRA contributions.
2. The second change is set to relieve tax-pressure on the “not-so affluent”; which in a way is good. From this year onwards the wealthy and affluent have to pay more taxes. For people who earn $200000 to I million dollars annually, the IRS has increased the audit rate. The limit for persons earning $200000 has been kept at 4% and for the 1 million dollar earners the limit has been fixed up to 12.5%. Considering the past records, this rise is tax-paying terms is a notable one.
3. The biggest change that has been noted in areas of tax return is the power and jurisdiction of Schedule B, well from this year it has been expanded. Now, it can question about foreign investments. This has bestowed full power to the IRS to crosscheck taxpayers against FBAR filers. In case someone possesses foreign money something more than $10000 reserved in the form of bank accounts, brokerage, mutual funds, and trusts he must submit a form called TD F 90-22.1 Report of Foreign Bank and Financial Accounts or FBAR. This form should be properly submitted by June 30 failing which will attract a fine of $10000.
4. Regarding those who have invested in stocks and shares need to be fully aware of the following notifications: the existing Schedule D is no longer in use as it has been replaced with Form 8949. The new system requires detailed information on capital gains and losses to be produced by the tax filer. For the detail information, Schedule D can be consulted.
5. The last vital change is the mileage rate for 2012, which will fall into place from Ist July and the task of detailed checking, verification, and scrutiny will be undertaken by IRS personnel. Their scrutiny will take into consideration returns that claimed half of their mileage pre-July and half part post-July.