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4 Quick Tax Tips
- The IRS has announced that the
new 2002 optional standard mileage rate for business use
of an automobile will rise from 34.5 cents per mile in 2001,
to 36.5 cents per mile. The standard mileage rate for the
medical or moving expense deduction rises to 13 cents per
mile in 2002 from 12 cents per mile. The rate for charitable
use of an automobile remains unchanged from last year at
14 cents per mile. The IRS says that the increase in the
standard mileage rate stems primarily from higher gasoline
prices that added to the cost of operating an automobile.
The standard mileage rate for business use of a car is an
alternative to deducting actual automobile expenses.
- The Alternative Minimum Tax is
affecting more taxpayers and becoming a huge revenue producer.
According to the latest IRS data, in 1999, almost 1 million
taxpayers were affected by the AMT and it produced $5.9
billion in revenues. In contrast, in 1998, only 853,000
taxpayers were affected and only $5 billion in revenue was
obtained. It's not surprising that taxpayers are upset about
having their tax liabilities raised but Congress doesn't
really want to lose this cash cow.
- It's not uncommon for tax refund
checks to be lost in the mail. Although sometimes the taxpayer
is at fault for not providing the IRS with a name or address
change, frequently the fault lies with the Postal Service.
The IRS has indicated that a delayed refund check will not
generate additional interest for the taxpayer, unless the
IRS is at fault. In this situation, interest is allowed
to the date of the replacement refund check.
- According to the Tax Foundation,
the per capita Federal income tax burden has reached $7,597
for 2001. The top 1% of taxpayers earn about 17% of total
income and will pay approximately 23% of Federal income,
payroll and excise taxes. To make the 1% group you'll need
an income of $340,306 or more. Meanwhile, the top 5% of
taxpayers will earn about 31% of total income and pay about
41% of the Federal taxes. To join this club you'll need
about $145,199 in income.
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