1 MILLION PEOPLE MAKE THIS MISTAKE
Remember the check you got last year from Uncle
Sam? Well, that extra tax refund last year is causing so much confusion that
it's delaying this year's refunds.
The Internal Revenue Service reports that more
than 1 million people have made an error reporting the advance payment the
government sent out in 2001 and 2002. Those who have made the mistake may have this
year's refund delayed by a week or more.
Most people got a check from Uncle Sam last
summer as part of the overall lowering of tax rates.
The maximum amounts were:
- $300 for single people or married people
- $500 for single heads of households.
- $600 for married couples filling
jointly, or qualifying widowers.
If you got the maximum, leave line 47 blank on
your Form 1040 (line 30 of Form 1040A and line 7 of Form 1040EZ).
Those who didn't, or who got less than the
maximum amount, should use the new line on the tax form -- it's there for folks
who need a second chance at the money on their 2001 return by claiming the rate
reduction credit. Follow this year's instructions for computing the amount.
New due date for Household Employee's W2
The IRS says employers will have until Feb. 15, 2003 to give
W-2 forms to their housekeepers, nannies and other household employees. Usually,
employers are required to give these forms to their employees by Jan. 31.
"The extension of time is a result of a late mailing of Package H,"
the forms and instructions booklet sent each year to those who filed tax returns
as household employers the year before.
IRS Audit Results
About 23% of IRS Audits in 1998 resulted in "no
change" in the taxpayer's liability as reported on the return, up from a
19% no-change rate in 1994.
Many High Income Taxpayers Do Not Itemize
About 9% of all individual taxpayers with adjusted gross income of
$1 million or more for 1999 did not itemize, instead choosing to use the
Reasons include low levels of charitable contributions, living
in states with no income tax, and poor tax advice.
MAXWELL SHMERLER & CO., CPAs
HELPING BUSINESSES SINCE 1913