Tag Archive for Form 1040 EZ

“Abolish The IRS” Distracts From Needed Reforms

Republican presidential candidates Senators Ted Cruz and Mike Huckabee would like to abolish the IRS. They are not saying they want to abolish taxes, just the agency that collects them. Even if either is able to simplify taxes to the point that no taxpayers have questions or need guidance, we still need a tax collector, as well as an auditor to ensure compliance.

A call to abolish the IRS is a distraction. That’s too bad because there are significant improvements needed to our federal tax system – a system that includes not only the income tax, but also employment, excise and estate and gift taxes. Tax reform must be the focal point, not termination of the entity that collects revenues to fund schools and roads, provide national defense, and much more.

The IRS is an easy scapegoat for complaints about our tax laws. But those laws come from Congress. Yes, the Read More

Written by | Posted in Tax Planning

Income Tax Aspects of Non-Business Capital Gains and Losses – Part V

Government Debt Securities

Interest on non-taxable bonds

The interest on most of these is not taxable but must be reported on the tax return. On form 1040 and 1040A, it is reported on line 8b (non taxable interest). On form 1040 EZ, on line 2, put “TEI” and then the amount, but do not include it in the amount reported for taxable interest on line 2. Exceptions (i.e., interest is taxable) are federally guaranteed obligations (there are some exceptions to these), revenue bonds used to finance home mortgages (there are some exceptions to these), and private activity bonds (there are some exceptions to Read More

Written by | Posted in Capital Gains • Income Tax