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Biblical Perspective On Paying Your Taxes

 

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What is the biblical perspective on paying taxes? That is the same question that was asked of Jesus. “Is it lawful for us to pay taxes to Caesar or not?. . . [Jesus] said to them, ‘Show Me a[Roman coin]. Whose likeness and inscription does it have?’ And they said, ‘Caesar’s.’ And He said to them, ‘Then give to Caesar the things that are to Caesars’” (Luke 20:22-25). This is an example of the contrast between the practices of our society and the teaching of Scripture. Avoid paying taxes at any cost, people rationalize; after all, the government squanders much of what it collects.

I am not condoning the waste found in government. In fact, I believe a citizen should make an effort to influence government to be more efficient. But the Bible tells us of an additional responsibility: to pay your taxes! “Let every person be in subjection to the governing authorities. For there is no authority except from God, and those which exist are established by God . . . because of this you also pay taxes, for rulers are servants of God, devoting themselves to this very thing. Render to all what is due them: tax to whom tax is due”(Romans 13:1, 6-7). It is permissible to reduce your taxes by using legal tax deductions, but we should be careful not to make unwise decisions simply to avoid paying taxes.

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3 Things The IRS Won’t Tell You While Filing Your Taxes

 

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We’ve officially entered the tax filing season. The IRS offers a lot of excellent information online at www.IRS.gov to help you get your 1040 filed accurately and on time. That said, there are 3 things the IRS won’t tell you.

  • It can be risky to “go it alone.” The tax code is so complicated these days, it’s often wise to hire a tax preparer to help you. This is especially true if you have lots of stock transactions, are self employed or run a side business. There are also some good software tax preparation packages available and some are now online as well.
  • It doesn’t matter how much or how little your income, you could be audited. The number of audits has been down in recent years, but being a low income earner doesn’t mean you won’t be audited. It is especially important to keep receipts for charitable donations, because the IRS flags returns with a lot of deductions for giving.
  • The IRS benefits from our anxiety. People often fear making a mistake, so they overpay on purpose. A few years ago, the Government Accountability Office found that over 2 million people overpay each year by an average of nearly $500. That’s almost a billion dollars a year in overpayments?

So, consider getting help unless you’re very good at preparing your taxes. It’s not just about being audited. A tax professional might save you a lot of money by catching deductions and credits that you may miss.

And don’t forget, the Bible encourages us to pay all the taxes we owe. So, always be completely honest when reporting your income and tax deductions.

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Good News if You’re Struggling to Pay Your Income Tax!

April 15! With the April 15th deadline for filing income tax returns right around the corner, it can be a really stressful time—especially if you don’t have the money to pay your taxes.

If that’s your situation, we’ve got encouraging news. The IRS has created what they call the FRESH START INITIATIVE which is designed to help taxpayers who owe taxes, but can’t pay them now. Here are the highlights from this initiative that might really help you:

  • For some unemployed taxpayers, the IRS will wave failure-to-pay penalties
  • The IRS will enter into payment plans for those who can’t pay and owe up to $50,000
  • For some that the IRS believes will not be able to pay, even in installments, they will offer to compromise the amount due

The IRS has developed a series of short videos, titled “Owe Taxes?” that does a good job of explaining the Fresh Start Initiative. To learn more click on the link below:

http://www.irs.gov/uac/Newsroom/IRS-Fresh-Start-Program-Helps-Taxpayers-Who-Owe-the-IRS

 

Remember, anytime you are stressed out or anxious about your taxes,  God’s word provides a solution. Philippians 4:6 tells us what we are to do: “Be anxious for nothing, but in everything by prayer and supplication with thanksgiving let your requests be made to God.” And once we have prayed with thanksgiving telling the Lord our request, we have this amazing promise in the next verse: “And the peace of God, which surpasses all understanding, shall guard your hearts and minds in Christ Jesus.”

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Tax Refund Tips for You to Follow

People are starting to file their 2014 taxes, and Uncle Sam will soon send out millions of checks. It’s astounding that the average federal tax refund is around $3,000. Why do folks give interest free loans to the government in the form of over-withholding?

There are several reasons:  Some folks are afraid of the IRS and don’t want to owe them anything.  Others look at a big refund as “free” money, or a windfall.  While some realize that they’re not good savers, and they view this as an effective way to force themselves to save.

Using the refund as a means of forcing yourself to save is a legitimate reason to over-withhold. But if you’re afraid to owe the IRS even a penny or you’re wanting to blow a windfall, it’s actually poor stewardship. You can put that money to better use than the government by using the withholding throughout the year to pay down those high interest rate credit cards or to beef up your saving or give to the work of Christ.

Ideally, you want to get back very little from the IRS, and now’s the time to make changes to accomplish this. First, adjust your withholding so that the minimum necessary amount is taken out to cover your tax liability. The IRS has an excellent Website. Go to www.irs.gov   and download Publication 919 for help on calculating the right amount to withhold.

Then, plan ahead. Are there things that will lower your tax liability next year by providing more credits and deductions? Having a child, buying a house with a mortgage, investing in a retirement account, and giving more to your church and ministries may all reduce your tax bite.

Or are there things that will increase your tax bill, such as, withdrawing money from a tax-deferred retirement plan or one of your children leaving the nest to become self-supporting. You’ll need more withheld from your paycheck if any of those things happen.

Listen to the Compass radio programs MoneyWise and HeyHoward to learn what God says about handling money.

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Taxes the IRS won’t tell you about

We’ve officially entered the 2014 tax filing season. The IRS offers a lot of excellent information online at www.IRS.gov to help you get your 1040 filed accurately and on time. That said, there are 3 things the IRS won’t tell you.

  • It can be risky to “go it alone.” The tax code is so complicated these days, it’s often wise to hire a tax preparer to help you. This is especially true if you have lots of stock transactions, are self employed or run a side business. There are also some good software tax preparation packages available and some are now online as well.
  • It doesn’t matter how much or how little your income, you could be audited. The number of audits has been down in recent years, but being a low income earner doesn’t mean you won’t be audited. It is especially important to keep receipts for charitable donations, because the IRS flags returns with a lot of deductions for giving.
  • The IRS benefits from our anxiety. People often fear making a mistake, so they overpay on purpose. A few years ago, the Government Accountability Office found that over 2 million people overpay each year by an average of nearly $500. That’s almost a billion dollars a year in overpayments?

So, consider getting help unless you’re very good at preparing your taxes. It’s not just about being audited. A tax professional might save you a lot of money by catching deductions and credits that you may miss.

And don’t forget, the Bible encourages us to pay all the taxes we owe. So, always be completely honest when reporting your income and tax deductions.

Warmly in Christ,

Howard Dayton

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The Fiscal Cliff

Dear Friends,

After months of playing political chicken, Congress managed to avoid the “fiscal cliff” at the very last moment by passing what is inaccurately titled the American Taxpayer Relief Act of 2012. How is this going to impact you and me over the short run?

First, all workers will pay higher taxes this year because the payroll tax is now increased by 2%. This means that a person or couple earning $50,000 will pay an additional $1,000 in payroll taxes. On the flip side, the Bush-era tax cuts have been made permanent. This means that tax rates, capital gains taxes, and tax on dividends in 2013 will be the same as last year for all but those individuals earning more than $400,000. The legislation also provides some economic certainty for small businesses and entrepreneurs to count on which, thankfully, should translate into more job creation.

What Congress failed to address was our out-of-control spending. Remember, Congress intentionally created the Continue reading The Fiscal Cliff