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What is a tax credit? Unlike a deduction that only reduces the amount of your taxable income, a tax credit reduces the amount of tax you owe.

Chris Tucker owes $11M in back taxes

Damanick Dantes Jul 29th 2010 @ 3:15PM EST Filed Under: Tax, Celebs & Money, In the News

According to our partners at TMZ, Rush Hour actor and comedian Chris Tucker owes the IRS $11 million in back taxes. TMZ leaked documents filed on Tuesday with the Los Angeles County Recorder's Office which shows that Tucker underpaid his Federal taxes in five separate years.

Here's a simple breakdown of Chris Tucker's debt:

2001: Tucker owes more than $4 million (even though he cashed in $20 million from Rush Hour 2 alone)
2002: more than $5 million
2004: $55,544.84 (an improvement, nonetheless)
2005: $660,000
2006: $1.78 million

How almost half of all taxpayers pay nothing in federal income tax

Kelly Phillips Erb Jul 29th 2010 @ 1:30PM EST Filed Under: Tax

Congressional leaders have been battling over the soon-to-expire Bush tax cuts for more than a year. Yet, there's still no word on whether Congress will vote to extend the cuts, allow the cuts to expire or work out some compromise package that might do a little of both.

At the center of the tax cut debate, is one key problem facing the current economy: Tax revenues are decreasing. With less income available to tax thanks to record levels of unemployed workers, there are only two ways to increase tax revenues -- increase the taxpayer base or raise taxes for the existing taxpayer base.

Raising tax rates is unpopular and unlikely to happen in an important election year and expanding the tax base would be just as unwelcome. That's because an astonishing number of taxpayers currently pay no federal income tax at all. Earlier this year, the Tax Policy Center reported that nearly half -- 45% -- of all households paid no federal income tax for the 2009 tax year.

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Tax tips for military personnel

Kelly Phillips Erb Jul 28th 2010 @ 9:00AM EST Filed Under: Tax

With all the news about troops in Iraq and Afghanistan, it's easy to forget that U.S. military personnel are stationed all over the globe. According to the Department of Defense, as of last year, there were 1,421,668 service men and women on active duty, largely located in the U.S. An additional 848,000 service men and women make up the reserves.

Men and women who serve in the military face a different set of challenges than most. In any given year, military personnel may experience relocation to different stations, temporary assignments and shifts for serving in a combat zone. As the sister of two Navy boys, including a career submariner, I can attest that what does remain constant is the capacity for change -- my brothers, for example, have collectively lived or worked in at least seven states while in the service.

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Getting your tax refund after a European trip is easy money

Jason Cochran Jul 23rd 2010 @ 11:00AM EST Filed Under: Tax, Travel, Economizer, Tax - Credit

Now that European summer travel season is in full swing, it's time for a simple-but-potent savings reminder: Always remember to claim a tax refund for whatever you buy on your European vacation.

European countries have a simpler tax system than we do. First of all, the price that's marked is the price you pay. There are no surprises at the cash register when tax suddenly appears on the total, because tax is almost always included in the sticker price. That arrangement is much easier on shoppers and cashiers alike. But more significantly, European countries charge a flat VAT (Value Added Tax) of 15% to 25% to pretty much everything you buy. It sounds like a lot, but when you add up all the various taxes Americans pay on purchases, we're in that ballpark, too.

Americans are not subject to that tax and in many cases, we can get that money back at the airport before we leave. On a recent three-day trip to Germany, I had a expense of €66 (a pair of cool shorts) for which, in the waiting time before my flight home, I got my tax back. I put about €5 back in my pocket. That was €5 I didn't have to lose, and €5 that many tourists forget to reclaim. Here's how:

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George Washington's whiskey returns, with a secret about a federal tax

Jason Cochran Jul 21st 2010 @ 9:00AM EST Filed Under: Tax, Travel, Celebs & Money, Video, In the News

Two hundred and 11 years after his death, George Washington still surprises. The custodians of his old estate at Mount Vernon, Virginia have just begun distilling and bottling whiskey using Washington's own recipe. Bet you didn't know that our First President was also one of America's biggest whiskey producers. But there's more to the story that that.

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Lil' Wayne owes over $1 million in taxes, Wesley Snipes' appeal denied

Linda Doell Jul 19th 2010 @ 12:20PM EST Filed Under: Tax, Celebs & Money, In the News

Rapper Lil' Wayne is again dancing with the IRS, this time over $1.14 million in back taxes.

The U.S. Internal Revenue Service filed liens last month in Dade County Circuit Court against the Young Money rapper's Florida property totaling $1,138,759.71 for back taxes in 2004, 2005 and 2007, according to court filings. The address listed on the liens is the same address as Lil Wayne's One Family Foundation. The group couldn't be immediately reached today for comment.

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Georgia nixes back to school tax holiday

Kelly Phillips Erb Jul 19th 2010 @ 11:00AM EST Filed Under: Saving Money, Shopping, Tax

What started as an experiment in 2002 is now an annual ritual. In states across the country, parents wait anxiously, school supply list in hand, for a "sales tax holiday" to make the cost of back-to-school shopping a little more bearable. This year, however, some shoppers are finding out that a declining economy means that returning to school will be more expensive.

Georgia has become the first (and so far, only) state in the country to announce that the popular tax break won't be available in 2010. The looming $2 billion hole in the state's budget was the primary factor in the decision not to offer the holiday in 2010. The holiday, usually held over the last weekend in July, has generated a loss for the state in terms of revenue dollars each year, according to legislators.

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Conrad Black gets $71M tax bill from IRS

Damanick Dantes Jul 16th 2010 @ 2:50PM EST Filed Under: Tax, In the News

In 2007, Lord Conrad Black was convicted by an Illinois U.S. District Court for diverting funds from Hollinger International, a newspaper media company, for personal use including corporate jets and a lavish NY apartment. His application for bail was rejected, and now the IRS wants $71 million in back taxes from Lord Black, including $120 million in unreported income from 1998 to 2003. Lord Black describes the IRS allegation as "sloppy and careless" and asked for this to be dismissed because he wasn't a U.S. resident at that time, therefore not required to pay taxes.

Lord Black issued a statement to the courts stating that he was a Canadian resident until 2001. However, the U.S. government says that because the alleged funds were from a U.S. source, his income is subject to U.S. taxes.

Steinbrenner's final win -- over estate taxes

Kelly Phillips Erb Jul 14th 2010 @ 1:30PM EST Filed Under: Tax, Wealth, Celebs & Money

In 2001, Congress announced with great fanfare that the federal estate tax had been repealed. Of course, they failed to focus on the fact that the so-called "repeal" would only last for one year: 2010. At the time, most tax professionals laughed at the idea of a one-year repeal, believing that it could never happen. It did.

The controversial tax has remained on the back burner for much of 2010. Two high-profile deaths are pulling it back into the spotlight. In March, Texas billionaire Dan Duncan passed away with a fortune estimated by Forbes magazine to be worth $9 billion, the 74th wealthiest person in the world. Had he survived for just nine more months, his estate would have been subject to about $4.95 billion in federal estate tax.

Continue reading Steinbrenner's final win -- over estate taxes

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