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December 2010

NOTE ABOUT THIS POST'S TAX YEAR REFERENCES: Although this post was written more than a year ago and specifically cites the 2010 tax year, the Internal Revenue Code rules on volunteering are still in effect for the 2011 and 2012 tax years (and until Congress changes them) as described below. If/when they change, I'll let you know with a new post. Thanks. Kay (1/15/12) This is the last day to make a charitable contribution if you want to deduct it on your 2010 tax return. If you're dropping off actual goods, you have a few things to remember. Get them... Read more →


Tax moves to make today!

Although the last day of 2010 isn't until tomorrow, many businesses and government offices will be closed Friday, Dec. 31. That means you've just got today to make some last minute tax moves. Here are some suggestions. Sell your investment losers: Need some capital losses to offset capital gains? Call your broker now and dump those dogs. Not only could they wipe out any taxable 2010 profits, up to $3,000 in excess losses can be used to reduce your regular taxable income. Even if you didn't sell any assets for a profit this year, if you have mutual funds, you... Read more →


H&R Block ends tax refund loan program

America's biggest tax preparation firm is out of the tax refund loan business, but it wasn't by choice. H&R Block will no longer offer refund anticipation loans, usually referred to as RALs. The move came after HSBC Holdings PLC, the bank Block used in connection with the controversial financial products, said it would stop underwriting the loans. Actually, HSBC was told to quit issuing RALs by its banking supervisory agency, the Office of the Comptroller of the Currency. While the immediate cessation of refund loans came as surprise, especially with the start of the 2011 tax filing season just days... Read more →


Last night I completed a quick mock 2010 tax return to see if the hubby and I should pay our property taxes this week to bump up our itemized deductions. In addition to offering guidance on the end-of-year tax moves we should make, the draft tax numbers also provided the good news that we won't face the alternative minimum tax (AMT). As a general rule, if your 2010 year-end projection indicates that you're likely to owe AMT, that situation will change your year-end tax strategy. Basically, it won't be worth it for folks facing the AMT to pay some expenses... Read more →


Santa brought the hubby and me lots of old-fashioned books. I am finally going to catch up on the adventures of the Girl With the Dragon Tattoo! But lots of folks got electronic book devices this holiday season. Those new-wave readers aren't the only ones happy with their presents. Their state tax collectors soon might be writing the gift giver a heartfelt thank-you note, too. New state revenue sources: Now that folks have their Kindles, iPads and Nooks, they're downloading e-books. Expect state tax collectors to have a field day with all those electronic purchases. Shawn DuBravac, chief economist at... Read more →


Dealing with my double payment

In connection with my post yesterday about end-of-year checks and which tax year such income should be reported, some folks are wondering about the exact resolution of my specific double payment situation. The extra payment, which arrived in my snail mail box last week, was in connection with my regular motorsports column, specifically for the piece that will appear in a couple of Randall-Reilly trucking industry magazines in January. (In case you happen to be at a truck stop, check out the Truckers News or Changing Lanes magazines for my thoughts on Dale Jr.) I was about to send the... Read more →


Something unheard of happened to me over the weekend. In going through my 2010 receipts, I discovered that a client had paid me twice for some work. That's a very nice surprise for a freelance writer. Like countless other small business people, we depend on prompt payment to cover our bills and buy the occasional Frappuccino. Naturally, my unexpected and financially positive turn of events got me thinking about taxes and the perennial question I get from other independent writers each year: If I get a check dated Dec. 31, but it doesn't arrive in my mailbox (yes, some clients... Read more →


Puppy mills target of Indiana tax officials

Innovative enforcement of Indiana's tax evasion laws has put the state at the forefront of "puppy protection." Andrew Swain, head of the Indiana Attorney General's Revenue Division, is being lauded for coming up with the idea of using tax statutes to shut down unlicensed, commercial dog-breeding operations that put profits before animal welfare. Swain's boss, Indiana Attorney General Greg Zoeller, says the closing of squalid puppy mills is a bonus. What really motivated him was going after tax cheats, a category he and Swain believe applies to some of the state's commercial dog breeders. Why the tax suspicion? Because many... Read more →


I'm not a particularly big churchgoer, even for special events like today. But amid all the expectations and expenses, I like to return to the reason for today's celebrations, the Biblical story of the birth of Jesus. I do have a nativity scene. And this year, purely by accident, it reflects a bit of Texas. A change in our holiday plans meant we (and by we, I mean me) didn't go as Christmas decorating crazy as in past years. I left the items that usually fill our foyer console during December boxed and instead put our Raku pottery nativity there.... Read more →


As you head out on this Christmas Eve to pick up last-minute presents, don't forget a tax-related gift for yourself. This is the last year that you can easily spend medical flexible spending account, or FSA, funds on over-the-counter, or OTC, medications. With this workplace benefit, you put money in your FSA before it's taxed. Then you use the funds to pay for allowable medical expenses. For years, OTC drugs have filled up the shopping bags of FSA owners looking to spend down their accounts, usually by Dec. 31, so they don't lose the money. The OTC option has been... Read more →


California flood, mud disaster

It's not going to be a very festive holiday for a lot of Southern Californians. A week of strong, steady rain produced flooding and mudslides. A woman walks past a car stuck in the mud in the middle of the road after heavy rains and flooding in Highland, California December 23, 2010. REUTERS/Alex Gallardo (UNITED STATES - Tags: ENVIRONMENT) It's highly likely that the region soon will be declared a major disaster area. In that case, residents who've suffered losses could get some special tax relief. And nonprofit groups, such as the Red Cross, are already offering help to dislocated... Read more →


The price of the 12 Days of Christmas

For the last 27 years, folks at PNC Financial Services have crunched numbers to find out how much it would cost to buy each of the gifts mentioned in the traditional holiday song The 12 Days of Christmas. The annual accounting has become known as the Christmas Price Index. In much the same way that the Consumer Price Index measures changes in prices of goods and services, the Christmas Price Index tracks what it cost seasonal song's true love. You can see an animated version of the Christmas Price Index pop-up book pictured above by clicking on the photo (or... Read more →


I'm a sucker for Christmas traditions. I watch A Christmas Carol (the one with George C. Scott as a robust Scrooge is my favorite). Actual Christmas carols are on the CD player. Ages-old schlocky but sentimental ornaments adorn our tree. And as a writer, much to the dismay of some of my editors (I'm talking about you, Dan!), 'tis the season indeed! That means hauling out holiday hooks for stories and blogs. Last year, I apparently had more time because I did 12 separate tax tips for Christmas. 2010, however, is a bit more rushed -- thanks, Congress, for putting... Read more →


The way Congress screws around every year, taking its sweet time getting to tax legislation that affects all of us, reminds me of that old saying: Sadly, while that thought pops into our heads every time the boss brings us a last-minute project that "must be done yesterday!" we don't get to actually live by that phrase. Other people's lack of forethought almost always is our emergency. That's sort of how employers are feeling right now in connection with the payroll tax reduction that will be in effect for 2011. This 2 percent cut in the amount withheld from workers'... Read more →


Larry David's tax cut thank you; Most Americans also happy with new tax law

A CNN/Opinion Research Corporation poll conducted just after the new tax relief bill was signed into law reveals that three-quarters of Americans like the tax cuts. When the provisions of the deal were broken out, the lower tax rates for families making less than $250,000 a year were favored by 89 percent of the poll respondents. On the other end of the tax spectrum, however, only 37 percent of those surveyed liked the extended tax cuts for folks making more than a quarter million a year. The pollsters probably didn't call well-known television grouch Larry David to ask his opinion... Read more →


The new tax bill and your 2010 taxes

Tax laws are like holiday fruitcakes. They're dense and mysteriously show up in late December. Everybody picks at them, but they never seem to be totally consumed. That's how it is with the tax bill signed into law last week. The tax compromise got lots of attention for extending 2010's income tax rates for a couple more years. But it also continues several other tax breaks that could help reduce your tax bill when you file your return next year. I plan to keep blogging in more detail about the various ingredients provisions, both that apply to the 2010 tax... Read more →


Whatever you think of the just enacted tax bill, we at least finally have some resolution to the 2010 and 2011 tax laws. Now comes the fun part: Complying with them. I suspect the IRS will have its hands quite full in the coming months as taxpayers and tax professionals alike sort through all the retroactive and prospective law changes. And you know what that means: Confrontations, I mean, interactions with IRS employees. OK. I do mean confrontations. Even in the best of times, taxpayer experiences with the IRS often don't end well. Now, however, taxpayers can do more than... Read more →


Estate tax options for 2010 decedents

Given the popularity of The Walking Dead, it shouldn't be surprising that there's a lot of interest in the law dealing with the intersection of death and taxes. Statistically, very few taxpayers are affected by the federal estate tax itself. Most estates aren't large enough to warrant IRS interest. But even if an estate doesn't trigger collection (or in 2010, noncollection) of the tax, its heirs could end up owing depending on what they inherit and what they subsequently do with their bequests. I'm again talking, of course, about the basis of property distributed after a loved one dies. As... Read more →


Many years ago I had great fun writing a story that highlighted financial advice from holiday experts. The angle was that the "experts" weren't your typical financial types. I'm pleased that with Christmas just a week away, Bankrate.com pulled it out of mothballs for reposting this year. I hope you enjoy reading it as much as I enjoyed writing it! Related posts: The 12 tax tips of Christmas 2009 Last-minute gifts for your tax geek Christmas with Austin's wild holiday trees Want to tell your friends about this blog post? Click the Tweet This or Digg This buttons below or... Read more →


Estate tax extension through 2012: Nudging mama off the train in two years?

With Obama's signing of the compromise tax deal yesterday, the really wealthy were among those who got an early tax present. Some of the House Democrats railed against this latest version of the estate tax, but in the end, it passed. For 2011 and 2012, estates worth $5 million or less won't be taxed at all. For estate values greater than that, a 35 percent tax rate will apply. That's better than the 2009 law, which imposed a $3.5 million exemption and a 45 percent tax rate on the excess. And it's much better than what would have happened had... Read more →