WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’
January 27, 2009 by THE WANDERING TAX PRO
Filed under Articles
* Fellow twit, and fellow tax blogger, Michael Rozbruch “turned me on” to an article from the Washington Post titled, “Don’t Wait for Obama to Cut Your Taxes”. It provides some good advice and resources.
* The TAXGIRL does not take week-ends off (actually none of “us” do this time of the year). Last Saturday she provided a good answer to a common question in “Ask the taxgirl: 1099 for Closed Business”.
* Kelly answers another oft asked question in “Ask the taxgirl: Running As Fast As I Can”. Her correct answer points up another inequity in the Tax Code – another instance where the taxpayer must bend over. Income is reported on Page 1, increasing AGI, but related deductions claimed on Schedule A (lost to non-itemizers) as “miscellaneous” subject to the 2% of AGI exclusion. To be fair only excess hobby income should be reported on Page 1.
* From the “I couldn’t have said it better” file – Kay Bell said it all when she pointed out “From the get-go, the lack of oversight in administering the Troubled Asset Relief Program (TARP) has made every bailout handout a very unfunny, and egregiously costly, joke. And since Congress opened up the bailout door so wide, then who’s to stop any legal business form seeking relief?” in her post “Next In Bailout Line: Porn” at DON’T MESS WITH TAXES.
* Kay has also provides a good basic overview of the many educational tax benefits that are available in her post “Rags, Riches and College Costs”
* TAXPROF Paul Caron quotes from the Wall Street Journal to tell us “Obama Plans to Keep Estate Tax” -
“President-elect Barack Obama and congressional leaders plan to move soon to block the estate tax from disappearing in 2010.
Under the Obama plan detailed during the campaign, the estate tax would be locked in permanently at the rate and exemption levels that took effect this year. That would exempt estates of $3.5 million — $7 million for couples — from any taxation.”
*Jeff Rose provides a good answer to ”Reader Question #4- Can I Take a Tax Loss on My Kids 529 Plans?” over at GOOD FINANCIAL CENTS (Helping you make “cents” of your investments).
Jeff smartly ends his answer with, “be sure to speak with your tax advisor just to make sure”.
* An AccountantsWorld.com article reports “Americans Failing Taxes 101”.
A survey by of all people The Tax Institute at H&R Block indicates that “most can’t answer even the most basic tax questions correctly . . . the majority doesn’t know a credit from a deduction”. Duh! Hey – it seems that many Americans have something in common with H+R Block tax preparers!
*WebCPA reports that “IRS May Expand Enforcement During Tax Processing” and pay closer attention to returns claiming the Child and Dependent Care Credit and Earned Income Credit while in the course of the initial processing of returns.
* The weekly NATP member email newsletter reports-
“The IRS has announced that victims of the severe storms and flooding on December 10, 2008, in the city and county of Honolulu, have more time to make tax payments and file returns. As a result, the IRS is postponing certain deadlines for taxpayers who reside or have a business in the disaster area until February 9, 2009. The postponement applies to return filing, tax payment, and certain other time-sensitive acts otherwise due between December 10, 2008, and February 9, 2009.”
* We have a winner – actually two. Peter Pappas of THE TAX LAWYER’S BLOG reports the results of his online poll in “Worst Tax Cheat Poll Results Final: Kiss Your Sister, We Have a Tie”.
* It appears that BO’s proposed economic “stimulus” package will include some individual tax breaks – Among them, according to the press release by Charles Rangel for the House Ways & Means Committee, the following:
· refundable tax credit of $500 per worker/$1000 per couple (up to $200,000 income)
· expansion of EITC
· expansion of child tax credit
· simplification of education credits and making the credit partially refundable
· turning the $7,500 loan for first time home buyers during 2008 into a subsidy (no repayment requirement)
· increased expensing for businesses
· increased bonus depreciation for businesses
· increased (5-year) carryback of net operating losses for businesses
· “prospective” repeal of Treasury’s illegal section 382 ruling (Notice 2008-83).
· annual one-year AMT fix {I added this to list – rdf}
More and expanded refundable credits – great! The mouths of tax-fraud scammers are most certainly watering.
I will provide more information when available.
TTFN
This post is from THE WANDERING TAX PRO
Outline of Economic Recovery Package from House Ways and Means Committee
January 27, 2009 by Tax Blog
Filed under Questions & Answers
An outline of the provisions under the Ways and Means Committee’s Jurisdiction included in the Economic Recovery package follows:
Tax Relief for Individuals
· “Making Work Pay Credit”
· Expand Earned Income Tax Credit (EITC)
· Increase in child tax credit, $0 floor
Education
· Simplification of education credits w/ $2,500 credit for first four years of higher education expenses (increase income limitations), with credit partially-refundable (40% refundable)
Housing
· Remove repayment requirement on $7,500 first-time home buyer credit for homes purchased after 2008 and before termination of credit (June 30, 2009)
· Coordination provisions with new grant program for low-income housing being designed by the Financial Services Committee
Business
· Bonus depreciation
· 5-year carryback of net operating losses (excluding companies receiving TARP benefits, Fannie Mae, Freddie Mac)
· Extension of increased small business expensing
· Expand work opportunity tax credit for disconnected youth and unemployed, recently-discharged veterans
· Prospectively repeal Treasury Section 382 ruling
State and Local Governments
· Allow financial institutions to purchase State and local bonds and other changes
· Repeal AMT limits on new private activity bonds
· Taxable bond option for governmental bonds
· School construction bonds
· One year deferral of withholding tax on government contractors
Distressed Areas
· Provide tax exempt bonds and tax credit bonds to “recovery zones.” These tax exempt bonds and tax credit bonds can be used for a wide array of purposes to stimulate economic development, including job training and education. A “recovery zone” would be an area within a State, city or county that has exhibited high unemployment, foreclosures or poverty. These bonds would be allocated automatically to States and large municipal governments based on the number of unemployed individuals within that area.
Energy Tax Incentives
· Long-term extension of renewable energy production tax credit
· Temporary election to claim the investment tax credit in lieu of the production tax credit
· Coordination provisions with new grant program for renewable energy projects being designed by the Energy and Commerce Committee (sections 45 and 48 projects)
· Clean Renewable Energy Bonds (“CREBs”)
· Qualified Energy Conservation Bonds
· Energy efficiency and conservation tax incentives under sections 25C, 25D and 48
· Smart energy conservation, energy efficiency, and renewable energy R&D credit
· Refueling property credit expansions
Trade Adjustment Assistance (TAA)
Updates, modernizes and expands TAA to cover service workers, and substantially improves and extends coverage to manufacturing workers
Triples funds for job training
Unemployment Insurance (UI)
· Encourage UI Modernization
· Continue the Emergency Unemployment Compensation Program
· Increase UI checks by $25/week
Additional Temporary Assistance for Needy Families (TANF)
· Provide additional TANF Contingency Funds to serve needy families
Supplemental Security Income (SSI)
Provide a one-time additional SSI Payment to Low-Income elderly and disabled recipients
Child Support Enforcement Funding
· Restore federal funding for Child Support Enforcement for 2 years
COBRA Healthcare for the Unemployed
· Provides temporary subsidies for health insurance coverage to those who have lost their jobs.
· Extends the availability of unsubsidized COBRA coverage for older and tenured workers beyond the 18 months provided under current law
Health Information Technology (HIT)
Establishes standards, payment incentives and privacy protections to encourage the widespread adoption of health information technology.
Extends Moratorium on Selected Medicare Regulations through October 1, 2009
- Ask TaxMama :: Where taxes are fun and answers are free
- www.TaxQuips.com :: The number ONE free tax podcast online
- House Ways and Means Committee :: Outline of Economic Recovery Package
Ask TaxMama Issue 488 – Ethics vs Power and Confidence
January 27, 2009 by Tax Blog
Filed under Questions & Answers
Dear Family,
Don’t you love to start the day with someone telling you – “You were right!”? That’s what happened yesterday, when Andrew came to work. Naturally, I know that I am often right (and sometimes wrong) – but what was I right about this time?
Ah yes, it was all over the news – Obama re-taking the oath of office.
Clearly, during the Inauguration ceremonies, it was somewhat mangled. Chief Justice John Roberts re-administered the oath, simply as a cautionary measure.(Right after the swearing in, I happened to say – well, that’s going to have to be corrected – very soon. I didn’t expect it to turn into a media spectacle. But that does make sense.)
I was wondering about the documents President Obama had signed, and the Cabinet members he’d had sworn in, etc. before the oath. But if you read the MSN article above, the administration and legal advisors didn’t think that much caution was necessary. But we all know, someday, someone will be unhappy with something and sue that something that was done or signed or decided before the re-taken oath isn’t valid. Sigh. Makes me tired. But I bet that will happen.
We had a bit of excitement this week as the confirmation hearings were going on. This hubbub over proposed Secretary of the Treasury really has the tax professional community in an uproar. At first, I thought his tax errors were simply an oversight. But, reading the documents that the Committee has gathered about Geithner’s tax history (i.e. things he SIGNED), and his own comments that he understood his responsbilities, but made a mistake. Read my – Accountingweb.com blog
But once I saw the documents, it became quite clear that this was a serious breach of ethics. And he just brushes it all aside. Essentially, his bold, strong, confident position vis-a-vis the Senate Committee panel is, forget it. Let’s move on to more important things. Whew! This fellow will be overseeing the IRS?
Oh, don’t worry, Geithner WILL get confirmed. He will be the new Treasury Secretary. After all, people like Paul Volker, Barack Obama and many legislators and others insist that he’s the only man who can do this job at this time.
There is this Fox News article by Glenn Beck that touches on this in an amusing and sarcastic fashion.
But that’s not what I want. I really wish that someone would spell out for me WHY? What are his special skills, or his brilliant vision that make him the ONLY Man? I am not being sarcastic. I’d just like to see an outline of his accomplishments and skills that make him so uniquely qualified. He’s going to be the one overseeing my professional ethics and career – and your tax liability and collections. I’d just like to feel more enthusiastic about him. Wouldn’t you?
In the meantime, everyone’s hard at work in Washington, DC.
In IRS News today, there’s an outline of the Economic Recovery Package from the House Ways and Means Committee; we get guidelines for bartering, and learn how to let IRS know when you move.
http://taxquips.com/index.php?cat=IRSNews
Today’s Money Funny we look at someone who felt the need to change his profession due to the recession…and other career considerations.
http://taxquips.com/index.php?cat=MoneyFunnies
In TaxQuips this week, we get a lesson about old laws on the books in some states about cohabitation; we learn (for federal purposes) whether a boyfriend can claim his girlfriend on his tax return; we deal with an interesting twist to the Stimulus Rebate situation; get into quite a heated discussion about s corporation ‘draws’; and learn that even after many years, and many miles, far away states can reach out and garnish your paycheck for unpaid taxes. Or may they?
http://taxquips.com/index.php?cat=TaxQuips
And finally, our Job Advice of the week gives you an e-book which is a Guide to a Six-Figure Job Hunt 101.
http://taxquips.com/index.php?cat=JobAdviceoftheWeek
Incidentally, Monday is Bubblewrap Appreciation Day. Click on the graphic at the top of today’s issue. It will take you a whole work of bubblewrap games and fun. Could be addicting!
As always, we love your feedback, opinions and ideas.
You are what makes all this fun – and interesting!
Please use the Comments link online.
http://taxquips.com/index.php?id=1091
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www.TaxMama.com
www.TaxQuips.com
www.IRSExam.com
www.taxnerd.net
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TAX CALENDAR 2009
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01.02.2009 File Form 2290 – Heavy Highway Vehicles
01.15.2009 4th Estimated Payment Due
Farmers and fishermen. Estimated tax for 2008 Due
01.15.2009 Employers Make Monthly Payroll tax deposit
01.31.2009 Furnish W-2s/1099/1098s to recipients
01.31.2009 File Quarterly/Annual Payroll/Sales Tax Returns
01.31.2009 Individuals – Filing personal return and pay all taxes
Without Penalty if January 15, 2009 estimated payment missed
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- Ask TaxMama :: Where taxes are fun and answers are free
- www.TaxQuips.com :: The number ONE free tax podcast online
- Money Funnies :: http://taxquips.com/index.php?id=1087
- IRS News :: Guidelines for Bartering, proposed tax law changes, change of address
- Job Advice of the Week :: Guide to a Six-Figure Job Hunt 101
- The 100% Home-Based Business Tax Solution :: The evolving e-book and Tax MiniMiser
- Prepare your own tax return :: $19.95 includes IRS, State, e-filing and tech support
Distributional Effects of the Major Individual Income Tax Provisions of H.R. 3970
On October 25, 2007, Ways and Means Committee Chairman Charles Rangel (D-NY) unveiled H.R. 3970, The Tax Reduction and Reform Act of 2007, sweeping tax reform legislation that would provide for a revenue-neutral repeal of the individual alternative minimum tax (AMT). This paper describes the proposal and provides distribution tables that analyze the impact of the major individual income tax provisions in the bill.