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October 2008

September 2008

KinderCongress needs to act, not act up

Not to keep harping on this, but it looks like many other tax watchers are coming to the same conclusion that I have: Tax extenders are likely dead for 2008. In the bigger economic picture, is it such a terrible thing if we have a few less tax breaks? Dollar-for-dollar, no. But if you count on the sales tax deduction to lower your annual IRS bill, it's a very big deal to you. Ditto the above-the-line adjustments for college tuition and fees and educators' classroom supplies. And we wouldn't be in this situation, repeatedly, if our lawmakers would just grow... Read more →


Bailout bombs

Just like the U.S. financial sector, the Congressional effort to prop it up has gone down in flames. Representatives from both sides of the aisle this afternoon lined up against the $700 billion bailout plan by a 228-to-205 vote. The measure had been scheduled for a Senate vote on Wednesday, but that's now in limbo as lawmakers try to regroup. Let's hope the stock market finds its footing, too. It went into free fall as soon as word of the House vote got out. You can read about the vote in the Wall Street Journal, The New York Times, The... Read more →


Tax legislation stare down continues

Since Congress has wrapped up the financial services bailout bill that will cost us taxpayers some dollars, they're now trying to come up with some tax breaks for Jane and John Q. Public. Yep, it will be very nice for Representatives and Senators, when they get back to their districts and states for one last pre-election push, to be able to change the subject from the $700 billion rescue package for wealthy Wall Street financiers to tax breaks for the residents of Main Street. But the House and Senate still are having a stare down over how to pay for... Read more →


Pulpit Freedom Sunday not likely to get an 'amen' from IRS ... or congregants

For members of some churches this Sunday, their church is no sanctuary from politics. A group of ministers, around 35 at last count, will tell their congregations to vote for either Barack Obama or John McCain. This so-called Pulpit Freedom Sunday message is a direct challenge to the tax law that prohibits tax-exempt organizations from participating in overtly political activities. It also might not be as welcome as the clergy might think, according to a recent poll on combining religion and politics. More on this survey in a bit. Free speech or tax free? The tax law at issue was... Read more →


Did the home sale tax exclusion
kill the economy?

Did the 1997 tax law change that allows home sellers to exclude hundreds of thousands of dollars from their taxable income contribute to today's economic crisis? Maybe. At the blog Cafe Hayek, economists have been examining the housing bubble and what role public policy might have had in the housing price increases and the subprime meltdown. "Maybe it wasn't speculative mania," writes Russell Roberts. "Maybe much of it was due to changes in public policy." A tax boon for home sellers: The specific policy change under the economic microscope is one of the most hallowed homeowner tax breaks. For the... Read more →


Your tax homework for tonight's debate

Tonight's first debate between Barack Obama and John McCain is on! Since both candidates are in Oxford, Miss., getting ready, I thought you might want to prepare, too. True, tonight's event is supposed to be about foreign policy, but you can be sure that economic issues will come up in the wake of the bailout plan that's still being hashed out in Washington, D.C. The Tax Policy Group of Deloitte Tax LLP has put together a nifty document detailing the two candidate's plans. As I mentioned in this previous post, the Illinois Democrat and Arizona Republican are making the usual... Read more →


Money mental health issues

OK, I appreciate the crucial role of trained mental health experts. But group therapy for money disorders? Does insurance pay for that? The New York Times reports that such treatment is a new, but growing field, "where budget planning meets psychological counseling." The goal is to isolate and treat unhealthy and self-destructive financial behaviors that are not as extreme as pathological gambling, kleptomania or compulsive shopping, but nevertheless afflict large numbers of people. It apparently is the perfect meeting of two still taboo subjects: money and mental health. Working out treatment details: In addition to patients' money issues, there are... Read more →


Taking the sting out of stock losses
at tax-filing time

The stock market closed up today after Capitol Hill reached an agreement on "bailout fundamentals." Why does that phrase sound like a class that business and political schools now will be adding to their curricula? Did you restrain yourself during all this recent financial turmoil? That was probably a wise move. I know it's easy to say don't panic when it's not your money, but the truth is that if your holdings are appropriate for your financial situation, you should do OK when then market settles down. But what if you couldn't resist? What if you closed out some stock... Read more →


More e-filing fees evaporate

It's official. More of us will be e-filing for free next year. Yes, that's the same opening sentence as my last post about Intuit's TurboTax. But this time, it's referring to H&R Block's TaxCut software. Denise Sposato, director of communications and communities at H&R Block, dropped the ol'' blog a note to confirm my "guess" about TaxCut offering federal e-filing at no additional cost in its software for upcoming Tax Season is absolutely true. "We actually were first to lead and announce our plans yesterday to offer e-filing at no additional cost," wrote Sposato. For the 2009 filing season, Sposato... Read more →


First free filing shoe indeed drops

It's official. More of us will be e-filing for free next year. This afternoon, shortly after I blogged about such a possibility in this post, Intuit formally announced that it has eliminated the separate federal e-file charge in its TurboTax desktop products. Just to make it clear, I'm not saying my blog posting was the catalyst for Intuit's announcement today. As I mentioned, it was well in the works. And I had meant to blog about it days ago, but I just got around to it this afternoon. My procrastinating, however, worked out well this time, don't you think?! "Eliminating... Read more →


Free e-filing for all?

The 2007 tax filing season isn't quite over (Oct. 15 is the ultimate deadline), but already some are thinking about filing -- and doing so for free -- next year. The Wall Street Journal says that the IRS has asked private, tax-software companies to find a way to let all taxpayers file for free. And one company apparently is planning on opening up the free-file doorway a bit wider in 2009. Desktop users of TurboTax, according to a report by WebCPA, should be able to use the tax preparation software and then electronically file for free, regardless of income. This... Read more →


In accepting the Best Comedy Emmy last night for 30 Rock, star Tina Fey thanked a lot of people: cast, crew, writers, producers, NBC and the Big Apple itself for its tax breaks. "I want to thank the city of New York for the giant tax cuts that make our show possible," said Fey, pictured above with her colleagues. Fey probably should have thanked the Empire State, too. It also offers similar tax breaks. So do about 40 other states, according to the Los Angeles Times, as do various cities, to encourage film and television folks to make their magic... Read more →


London mansion repossessed

The United Kingdom's housing market seems to be running on a track quite similar to the one here in the United States. For the last several months, housing prices have been falling and credit is tight. Builders and mortgage brokers are watching business dwindle. And the wealthy in Great Britain have now found that they, too, can lose their homes. The Times Online reports that several banks have seized an £11.6 million ($21.3 million U.S.) London mansion: The six-bedroom house on Ilchester Place in the wealthy enclave of Holland Park has been repossessed and put on the market at £10... Read more →


$320,000 tax bill based on MySpace boast by college kids

Admit it. As a crazy college kid you attended your share of parties like the one in the video below. But I bet your youthful revelry didn't prompt a $320,000 state tax bill. Of course, if you're close to my age (and no, I'm not saying exactly what that is), the Internet and social media sites weren't around to help the tax collector round up evidence. Make an on-line slide show at www.OneTrueMedia.comdd But in 2008, the combination of new technology and youthful hubris has led to an apparent tax windfall for the Sooner State. Five current and former University... Read more →


Financial meltdown's effect on nonprofits

Here's another group that's going to suffer because of the financial sector's implosion: nonprofits. Kate, who blogs at It's Not Always About Money, had an "I told you so" moment last week as fiscal chaos reigned. She notes that months ago, she wrote that heavy reliance on a single donor, whether individual or corporate, was a very risky proposition for a nonprofit organization. Now groups that counted bankrupt Lehman Brothers as a, or the, major donor better have contingency plans in place, writes Kate, because making up those dollars will take a lot of effort. Bloomberg and Crain's New York... Read more →


AIG bailout and the tax code

Remember when Fannie Mae and Freddie Mac were taken over by our government? Specifically, remember how Treasury Secretary Paulson directed the IRS to issue a notice allowing Freddie and Fannie to retain all of their net-operating losses, despite a change of control of ownership? As discussed in this blog item, the change was made to ensure that the two lenders don't pay more in taxes to the government that now controls them. Now, in the wake of the government bailout of insurance giant AIG, comes another tax component to the current financial crisis. Adam Levitin, blogging at Credit Slips, writes:... Read more →


44% of U.S. taxpayers could owe $0

How's this for a Tax Twilight Zone moment? I just received an e-mail that says both presidential candidates' tax plans will reduce millions of taxpayers' liability to zero or less. The percentage of U.S. residents who wouldn't have to pay taxes under either a Barack Obama or John McCain Administration would be 44 percent or 43 percent, respectively. The freaky thing about those numbers (and we'll get to the disturbing thing about them in a minute) is that the e-mail containing them arrived shortly after I blogged about how more than 40 percent of Australians pay no taxes, and used... Read more →


Shark's divorce tax issues resolved;
Plus, an Oz tax mirror

Professional golfer Greg Norman, aka The Shark or Great White Shark depending upon which nickname database you consult, and his ex-wife reportedly have reached a settlement on the financial dissolution of their marriage. Although the 25-year marriage of Norman and Laura Andrassy officially ended last year, thereby allowing the golfer to wed former tennis great Chris Evert, Norman and his ex continued to fight over post-divorce money. Specifically at issue was who would foot the tax bill for depreciation on Norman's private jet. Norman reportedly wanted his first wife to pay half of the aircraft's $16 million IRS bill. Both... Read more →


Reality TV faces real estate realities

So-called reality television shows attract not only the attention of viewers and reviewers, but also the IRS and other creditors. One of the most popular such programs in recent years has been ABC's Extreme Makeover: Home Edition. The show is designed to provide financially struggling and often-times ailing or disabled persons into better homes. But tax and other financial issues keep intruding on the show's fantasy endings. Back in 2006, and blogged about here, some tax experts raised questions about the associated property taxes on the Extreme Makeover houses. The network has always contended that it structures its giveaways so... Read more →


White House press aide = tax delinquent!

Dana Perino is Dubya's chief press officer. She also apparently was, until just recently, a property tax scofflaw. The Sleuth, the Washington Post's blog that lurks in the back halls of Washington, D.C., political hot spots, reports that Perino's home in the southeastern portion of the National Capital had been scheduled to be "sold at public auction to the highest bidder" today. However, The Sleuth says that Perino told the blog that the delinquent property tax bill has been paid in full and the press secretary doesn't have to worry about finding a new place for her stuff, at least... Read more →