WASHINGTON: According to research conducted by the Internal Revenue Service, businesses that pay their taxes using the Electronic Federal Tax Payment System (EFTPS) have significantly fewer IRS penalties assessed. Click Here.

Compiled by FTA from various sources. Click Here.

By an overwhelming margin, most states tax their middle- and low-income families far more heavily than the wealthy, according to a new study by the Institute on Taxation & Economic Policy.

• Nationwide, middle-income families pay almost 10 percent of their earnings in state and local taxes and poor families pay more than 11 percent. But the richest people effectively pay only 5.2 percent of their income in state and local tax.

• Since 1989, state and local taxes have risen on low- and middle-income taxpayers, but have fallen on the very wealth.

At a time when cuts in federal aid and declining state tax revenues are forcing state lawmakers to seek increased revenues, it’s important to evaluate who currently pays state and local taxes, said Robert S. McIntyre, ITEP’s tax policy director and lead author of the study, Who Pays? A Distributional Analysis of the Tax Systems in All 50 States. Unfortunately, most states require their poor and middle-income taxpayers to pay the most taxes as a share of income and the ways in which states have managed their budgets during the last decade have made this problem worse. Click Here.

Thanks to a recent tax simplification law designed to clarify who can claim a child as a dependent, some upper-income families with both younger children and older “boomerang” kids living at home could benefit from an unintended loophole. Click Here.

The anticipation can be worse than the reality. Here’s how to beat the odds when the IRS targets you. Click Here.