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Archive for Tuesday, January 19, 2010

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January 19, 2010

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When raising taxes becomes too much of a hot potato, lawmakers often turn to additional fees to help them pay the costs of operating government.

In some cases, fees make sense; people who use certain services ought to have to pay for them. However, a fee being proposed by the Kansas Department of Revenue goes too far.

Department officials plan to ask legislators to approve a $25 fee for filing paper income tax forms and an additional $5 fee for filing a paper form for a state sales tax refund. People who file their taxes electronically would have no fee.

Not only would the fee charge people for something they are required to do — file a tax return — but it also would fall hardest on low-income and elderly Kansans who don’t have computers or aren’t comfortable using them to file their tax returns. Using a tax preparer would bypass the fee, but that also is something many people can’t afford.

Last month, the Department of Revenue issued a warning, saying that residents who filed paper returns could wait up to four months to receive their tax refunds. That’s nearly twice as long as in previous years, which seems like punishment enough for filing on paper even without the $25 fee. The department noted how much more it costs to process paper returns and said it was looking for ways to cut costs. The department also decided not to publish a paper tax instruction booklet this year and won’t be mailing paper tax forms to libraries, banks and other sites as they have in the past.

There’s nothing wrong with encouraging a switch to electronic filing, but the state may be moving too fast. Of the nearly 1.5 million Kansas tax returns filed last year, about 450,000, 31 percent, were on paper. It’s a fair bet that many of those filers were low-income. They were people who couldn’t afford a tax preparer or tax preparation software for their computer. They may be elderly people who are simply more comfortable with a paper form or young people with part-time jobs and little income to report.

In other words, they aren’t the people the state should be trying to get more money out of by charging additional fees.

Kansas legislators who are refusing to look at any tax increases this session should consider the trickle-down effects of that decision. Like taxes, fees still come out of the pockets of Kansas residents and often in more inequitable ways.

Comments

saoirseglen 4 years, 3 months ago

How many people, particularly the elderly or those of limited means, know about the free online filing process for Kansas tax returns?

How many have a computer and internet access or know how to to use it?

And do the volunteer tax preparers of VITA help people file state tax returns online through the state's free tax return website?

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anon1958 4 years, 3 months ago

SettingTheRecordStraight (Anonymous) says…

anon1958,

This is a Kansas Department of Revenue proposal.


The legislature purposely underfunded the court system with the expectation that the courts would raise fees to make up the difference.

This is the same exact thing.

The morons in the legislature are the ultimate source of this and other bad ideas. They are so ignorant that they did not even realize that the fees they wanted raised were already capped by their own legislation.

So lets really just "set the record straight" and you can stop apologizing for the fools in Topeka.

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any 4 years, 3 months ago

somedude20 says... "then the rest becomes part of your income so that those bastards, (I mean tax agents) tax the same money twice. "

Actually it isn't taxed twice. If more is withheld from the bonus than is necessary then you'll get that money back as a refund. Just as money withheld from your normal pay isn't double-taxed, bonuses aren't either. Yes, a greater percentage is withheld on a bonus, but I don't see the double-tax. All income counts once towards your income to determine your tax liability. Then they subtract out what you've withheld, including the greater percentage amount on your bonus.

And as SouthWestKS pointed out, you can file your KS return online for free. And there is also a program, Volunteer Income Tax Assistance (VITA), available for free to help people out with filing their taxes if they do need assistance; they wouldn't even need to pay turbo-tax or H&R Block if they don't want.

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oneeye_wilbur 4 years, 3 months ago

Why doesn't the Journal World take a stance against "fees" that our local government charges? Franchise fees on utilities, fees for stormwater, and the list goes on. Oh, how foolish of wilbur, those fees enhance the qualitiy of life that is going to bring retirees to Lawrence to volunteer to shovel and mow lawns for those who cannot. NOT.

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somedude20 4 years, 3 months ago

I love that if I do well at my job and get rewarded with a bonus the govt. takes taxes out on the bonus when I get it (at a higher rate mind you) then the rest becomes part of your income so that those bastards, (I mean tax agents) tax the same money twice. Now, they want to charge a fee for me to pay them. What is that they say in Major League....up your butt jobu

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SettingTheRecordStraight 4 years, 3 months ago

anon1958,

This is a Kansas Department of Revenue proposal.

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saoirseglen 4 years, 3 months ago

Last year I think H&R Block's TaxCut program was about 59.95 for the program and you received one state add-on for free, each additional state was 14.95. To e-file to the IRS, you had 5 free submissions in the program purchase price but to file state it was 14.95 per return. There were additional fees for a direct deposit of 8.95, more if you wanted a refund advance loan, but no extra charge if you wanted a printed, mailed check from the federal and state tax agencies.

You could easily get a total cost to file of about $100 that way if you have a complicated tax situation, however, compared with a human tax preparer it is still cheaper.

Federal filers at least have the free option to file taxes online with the IRS but as far as I know Kansas doesn't offer that option. It is a social justice issue where those who do not or may not have the resources or ability to file electronically or pay someone to file electronically for them are facing more costs when they may not owe any money or might have a minimal refund.

If I did a paper return and found out the cost to submit the return would be more than my refund I might be tempted to not file as there is little reason to pay $30 if I would get less than that back as a refund. Then the state would spend more money coming after me for not filing a return.

Imagine if the one-third of Kansas taxpayers who file on paper got fed up with the proposed fees and just didn't file because of the cost versus benefit is negative? How much money would the state spend tracking those people down and taking them to court or fining them for not filing a return?

Then again, I suppose you could itemize the cost of submitting a state tax return to Kansas on paper on your 2010 tax return as a tax preparation expense, at least at the federal level. It may hurt now, but at least it could be deducted next year and reduce your taxable income a little bit.

Keep taxing people more. It will give us more deductions to claim and reduce our taxable income even more. Thus people will have a lower tax liability and less money to the federal and state coffers.

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GardenMomma 4 years, 3 months ago

When I worked as a tax prepared for two of the three big companies, the fee to file electronically was $50 (that covered both federal and state returns, extra if you had another state to file like Missouri). That was almost ten years ago. Wonder how much it's gone up to now?

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LogicMan 4 years, 3 months ago

Nor stated directly that this is a tax on tax. But hopefully our representatives in gov will read and heed this article's intent.

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Brent Garner 4 years, 3 months ago

What the editorial does not mention is that many times one is charged a fee by the tax service--TurboTax, etc.,--to file electronically so this proposed fee would be a double hit. Not a good idea. Not a good idea at all.

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anon1958 4 years, 3 months ago

One spineless Republican from the Kansas legislature turned to another and said, "Lets charge them a fee and we can pretend that it is not a tax."

"Thats briliant" his gutless brother replied, "Our ideology is saved!"

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