Tax Time Cheaters
It’s over. Tax day is gone.
But what if you cheated on your taxes? Wondering when your offense will be so old that the Internal Revenue Service won’t come after you?
“As is often true with taxes, the answer is complex and full of traps,” writes Wall Street Journal columnist Laura Saunders.
For garden-variety civil tax issues, such as overstating an entertainment-expense deduction, the statute of limitations is typically three years, Saunders says. But there are many exceptions that give Uncle Sam wide latitude. For example, if the tax issue involved income greater than 25 percent of the gross income on the return, the statute of limitations rises to six years.
And when it comes to civil fraud, there is no cut-off date.
Financial Literacy Month
As we hit the middle of financial literacy month, Mint.com contributor Cyrus Sanati has been tackling personal finance topics. This week it’s mutual funds.
“The mutual fund is the quintessential collective investing scheme,” says Sanati. “It is basically a variety of securities (stocks, bonds, etc), which are owned collectively by a large number of investors. The securities make up a single fund, and shares are sold to investors based on their collective value. It is managed by a group of financial professionals who make all the investment decisions on the fund’s behalf. If the securities in the fund increase in value, then the value of your shares also rises, equating to a positive return on your initial investment.”
Sanati answers some of the most frequently asked questions about mutual funds.
Responses to “Breakaway Wealth”
In an award-winning series, Washington Post writers Steven Mufson, Jia Lynn Yang and Peter Whoriskey reported on the nation’s growing wealth gap.
For last week’s Color of Money question, I asked: “How do you feel about the growing disparity between the super wealthy and everyone else?”
“In light of the huge disparity between top executive pay and the new working ‘no longer middle class’ poor, like me, I think the poverty level income figures should be revised,” said AJ of Waldorf, Md. “I am a grossly underpaid educator who is committed to my career choice, but am usually delving into ideas to produce additional streams of income.
Michael Ripple of Somerville, Mass., wrote, “The energy is mostly going to the top 1 percent. The middle class and working poor are losing their energy.”
On Saturday, April 21, at 11 a.m., I’ll be speaking at Columbus Metropolitan Library in Columbus, Ohio. The library is sponsoring “Money Smarts for You: A Day of Free Financial Help.” The address is 96 S. Grant Ave., Columbus, Ohio 43215. There will be free parking and child care for children 3 to 9 years old. To learn more, call 614-645-2275, or click this link.
Tia Lewis contributed to this report.
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