Tax Freedom Day for Iowans will arrive April 9, according to the Tax Foundation. That’s nine days sooner than for the whole country. From the Tax Policy Blog:
Tax Freedom Day is the day when the nation as a whole has earned enough money to pay its total tax bill for the year. A vivid, calendar-based illustration of the cost of government, Tax Freedom Day divides all federal, state, and local taxes by the nation’s income.
In 2013, Americans will pay $2.76 trillion in federal taxes and $1.45 trillion in state taxes, for a total tax bill of $4.22 trillion, or 29.4 percent of income. April 18 is 108 days, or 29.4 percent, into the year. Americans will spend more in taxes in 2013 than they will on food, housing, and clothing combined.
You can find Tax Freedom Day for your state from this Tax Foundation Map:
The national Tax Freedom Day is five days later than last year:
Tax Freedom Day is five days later than last year, due mainly to the fiscal cliff deal that raised federal taxes on individual income and payroll. Additionally, the Affordable Care Act’s investment tax and excise tax went into effect.
But cheer up! If taxes were high enough to pay for all government spending without borrowing, it wouldn’t be until May 9.
TaxProf, ESPN: Athletes’ Charities Fall Short of IRS, Nonprofit Standards. Chis Zorich might agree. Actually, the arguments against athletes setting up their own charitable foundations are the same as those for anybody else. They take more work and expertise to run than most people realize. Compliance with federal tax laws and state laws can be costly. It’s easy to get into trouble with them, like Mr. Zorich did. It’s much wiser for athletes with a charitable interest to work with an established charity that knows what it’s doing.
So you owe the IRS on your 2012 return and cash is tight. What now?. My new post at IowaBiz.com, The Des Moines Business Record blog for entrepreneurs.
Jason Dinesen, Taxpayer Identity Theft — Part 14 . The latest adventures in trying to get the IRS to pay the refund of his client, an identity theft victim, for 2010. She may have it in “another 6-8 weeks.” We’ll see.
Kaye Thomas, Last Call for Refundable AMT Credit. Congress didn’t extend the refundability of long-term alternative minimum tax credits, making the exercise of incentive stock options once again potetially ruinous.
Peter Reilly: Lawyers Unite To Keep Dark Money Dark
Joseph Thorndike: Hate Filing Your Tax Return? Good. (Tax.com). Good for those of us who charge money to prepare returns, anyway.
For a tax blogger, people like Richard Hatch are wonderful. Hatch, for those who don’t remember, was the winner of the first Survivor and won $1 million. About 300 million individuals worldwide saw Hatch take down the $1 million.
Hatch received a Form 1099-MISC for his winnings. In the United States, winnings from contests are taxable. Hatch claims that CBS and/or the producers of Survivor promised him that they would pay his taxes. (Both CBS and the producers of Survivor deny this charge.)
Of course Mr. Hatch failed to pay the taxes on income he earned in front of millions, serving a prison sentence as a result. Sometimes watching somebody else get into real trouble can be instructive.