Federal taxes on airline tickets too high?
If you were to place airline tickets on a political scale, it would probably land near the bottom, simply because when you think about airline tickets you don’t think about controversy.
There are many supposedly controversial claims that have been made about plane tickets. For example, PolitiFact has stated that the federal government runs a background check on you whenever you buy an airline ticket. That’s more than likely false.
Gary Kelly, the chief executive officer of Dallas-based Southwest Airlines, has come up with a new claim for airplane tickets. Southwest airlines carry the most domestic passengers in the United States and a majority of the passengers at Milwaukee’s Mitchell International Airport.
Kelly made a bold statement in a column that he wrote on February 2013 in the in-flight magazine of Southwest and AirTran Airways. He said that federal taxes and fees turn out to be about 20% of a normal $300 round-trip domestic ticket. Kelly continues by saying that that’s higher than federal taxes on products like tobacco, alcohol and firearms.
Spring break is right around the corner, and alcohol, firearms and tobacco are always a factor, we shall see if Kelly’s claim is true or not.
Kelly’s claim is focused on federal taxes on airline tickets and other products. The source he used for the taxes on airline tickets is coming from Airlines for America, a trade group that advocates for the airline industry. Airlines for America announced in December of 2012 that they would put into effect a campaign to persuade lawmakers to reduce federal taxes on airlines.
Categories: Federal Tax, Income Tax Tags: airline tax, federal tax, income tax, sales tax
FAFSA Tax Return Delays
The IRS seems to be causing more trouble than simply slowing down federal tax refunds, as there is a delay in processing forms 8863, Education Credits. The Department of Education formally addressed the delay this week, and it was referred to as a technical error due to a limited number of federal tax filing software. This delay affected hundreds of thousands of taxpayers that included many who have filed with H&R Block.
This glitch has added weeks onto the processing times for tax returns that are usually submitted and processed by mid-to-late February, making it rather difficult for some students to submit their FAFSA on time, which is Free Application for Free Student Aid.
Every year, millions of students submit a FAFSA, hoping to secure financing for college; this includes available grants and in many cases, loans. For the 2011-2012 FAFSA year, there were over 20,000,000 applications that were submitted, in which one third of them were submitted within the first quarter.
Students are not required to wait for their federal tax return to be processed by the IRS in order to complete and submit the FAFSA application. All of the information can be entered manually onto FAFSA, instead of using the FAFASA/ IRS Data Retrieval Tool that automatically populates the form with data from the IRS. The Department of Education is recommending that students file complete application as soon as possible. In addition, they can collect paper copies of those tax returns and make any FAFSA corrections.
Categories: Federal Tax, Income Tax, State Tax Tags: corporate tax, federal income tax, federal tax, income tax
Cyprus Rejects Controversial Tax on Deposits
The parliament of Cyprus rejected a controversial bank deposit levy earlier this week, a precondition for receiving a very pricey bailout. This quickly tore up the four day old loan deal the country already negotiated with European and international creditors that is need badly to break off default and a meltdown in its financial sector.
Many people believe that the stock market’s reaction to the Cyprus banking crisis was a case of willful denial, according to Mark Hulbert’s discussion on Markets Hub.
Coming in after days of political talks in the Cypriot capital, the vote means that a new deal, if it’s possible to even make one, will have to be done in days or Cyprus might face a total collapse of its banks. Many analysts believe that if that is to happen, it will send the tiny nation flailing out of the Eurozone.
After a long two hour debate on the divisive federal tax, there were 19 lawmakers from Cyprus’ Democratic Rally party, led by President Nicos Anastasiades that were abstained from the vote; this decision made sure that the plan would be rejected. The rest of the lawmakers in Cyrpus’ 56 seats of parliament had voted against the plan.
The rejection of this particular bill will only leave Cyprus with a few options. They could renegotiate the deal on the tax deposits with the European creditors, but they are also forming a Plan B that involves support for its banks from Russia.
Categories: Federal Tax, Income Tax, State Tax Tags: avoiding taxes, federal income tax, federal tax, income tax, tax law