Published November 29, 2012
The IRS recently released income tax statistics for the 2010 tax year and these statistics offer good insight on the shape of the economy. And this time we have good news! Mind you the news is two years old, but it is indicative of an upward trend.
In 2009, 140.5 million individual income tax returns were filed. A year later, 142.9 million tax returns were filed for an increase of 1.7%. Adjusted gross income (AGI) totaled $8.1 trillion in 2010, a 6.1% increase from 2009 and the first increase after two years of lower reported AGI. If we go back farther, in 2008 a little more than 138 million tax returns were filed, a decrease of two million from 2007. These numbers could be good news because it hints at a strengthening work force--it could be from an increase in jobs, a rise in self-employment or both. Then again, part of this could be an increase in compliance. After all, in 2009 President Barack Obama allocated an additional $600 million in funds to the IRS for the purpose of enforcement.
According to the IRS, more than three million partnership income tax returns were filed representing more than 22 million partners across the country, a rise from prior years. Nearly 50% of all partnership returns are in the real estate and rental and leasing sector. Total assets, total receipts and total net income all increased from 2008 and 2009 standards. This indicates a surge in new tenants entering the rental market. As we all know, many homeowners were forced into short sales and foreclosure and now the real estate market is prime for investment, so it does not surprise me that many folks are partnering up to take advantage of the buyer’s market.
Nonprofit organizations enjoyed an increase in income and in the value of net assets. The total of assets held within these organizations topped $2.70 trillion, a 6% increase from the prior year. They also reported $1.48 trillion in total revenue, also a 6% increase from the prior year. You know things are getting better when Americans choose to donate more to qualified nonprofit organizations.
Here are some other IRS announcements and changes taxpayers should note:
The new mileage rates for 2013 were announced this week and are as follows: 56.5 cents per mile for business miles driven, 24 cents per mile driven for medical or moving purposes and 14 cents per mile driven in service of charitable organizations. Business, medical, and moving rates are up one penny from the prior year.
The IBA Tax Group announced a new phone app: The OIC calculator. In May 2012 the IRS announced a more lenient set of standards agents will use when considering offers in compromise. The new app helps taxpayers calculate the set formula the IRS uses to determine how much to accept in these offers.
Hurricane Sandy: The IRS announced this week that nonprofit organizations affected by Hurricane Sandy who have had their 501(c) (3) status revoked are entitled to reinstatement and transitional relief if they apply by February 1, 2013. The organization must be located in the designated disaster area.
Tis the Season for giving: Non profits exercise a year end push to raise badly-needed funds. We feel generous at this time of year, but make sure you have your ducks in a row when it comes to filing a write off. A cancelled check is not sufficient proof to substantiate a charitable tax deduction, make sure you receive and store in your tax file every acknowledgment letter. The IRS has been auditing charitable contributions and will disallow those that do not have this backup document.
Bonnie Lee is an Enrolled Agent admitted to practice and representing taxpayers in all fifty states at all levels within the Internal Revenue Service. She is the owner of Taxpertise in Sonoma, CA and the author of Entrepreneur Press book, “Taxpertise, The Complete Book of Dirty Little Secrets and Hidden Deductions for Small Business that the IRS Doesn't Want You to Know.” Follow Bonnie Lee on Twitter at BLTaxpertise and at Facebook.