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March 2011

I know you're frantically looking for ways to reduce your tax bill. But sometimes you just need to be reminded, don't deduct that! Related posts: Deductions for nonitemizers Overlooked tax deductions, credits Bunch your deductions When deducting work expenses, ask your boss for reimubursement first Tax breaks for minimum wage workers Three requirements to deduct job search costs Want to tell your friends about this blog post? Check out the buttons -- Tweet This, Reblog, Like, Digg This and more -- at the bottom of this post. Or you can use the Share This icon to spread the word via... Read more →


GE and 14 other tax dodging companies

It's been a week since we all learned about General Electric's innovation in the corporate tax realm. The company's vice president for communications and public affairs, Gary Sheffer, responded to the New York Times' story breaking the GE's tax saving situation via a letter in today's newspaper: "It was significant losses at GE Capital in the financial crisis, not 'tax avoidance' strategies, that reduced General Electric's 2010 overall tax rate below historic levels. Without these financial crisis losses at GE Capital, G.E.'s tax rate would have been near the average of other multinational corporations. Our tax rate will return to... Read more →


IRA time!

As the annual tax-filing deadline nears, folks tend to pay extra attention to their individual retirement accounts. Part of the reason is that contributing to an IRA is the only thing you can do now that still applies to the tax year that ended on Dec. 31. If you haven't maxed out your IRA contribution for 2010 -- that's $5,000 for an IRA, both traditional and Roth, or $6,000 (again for both types of retirement accounts) if you're age 50 or older -- you can put money into the account as late as April 18 this filing season. Traditional IRA... Read more →


Corporate taxes: time to cut the tax rate or to make sure companies pay at all?

Talk of U.S. tax reform has begun with an examination of the country's corporate tax rate. The loudest voices have been from companies complaining that the U.S. rate of 35 percent is among the highest in the world, second only to Japan. That, say advocates of lower business taxes, is forcing companies to realign their operations to take advantage of global business tax havens. But other voices began piping up when General Electric's 2010 tax situation became public last week. The relatively high U.S. corporate tax rate didn't bother General Electric. Last year, the largest corporation in this country didn't... Read more →


When deducting work expenses, ask your boss for reimbursement first

When it comes to padding deductions, unreimbursed employee expenses might seem to be an easy one. You picked up some office supplies here. You attended a work-related conference there. Your boss never paid you for those out-of-pocket costs. So you simply add the work-related expenses to the rest of your miscellaneous itemized deductions and voila, you've overcome the 2 percent of adjusted gross income threshold. Your Schedule A deductions are a bit bigger and your tax bill is a bit smaller. Whoa up there, cowboy. Or cowgirl, as was the case in a recent Tax Court ruling. Cheryl Lynn de... Read more →


Ah Spring. Warmer weather (with apologies to those getting one last blast of Winter). Longer days. Impending tax-filing time. We celebrate all that in Tax Carnival #84: Spring Tax Time. Photo by hatman12 via iStock OK, so maybe not all that, just the impending April 18 tax-filing deadline. But that's plenty. So let's get to it. The carnival kicks off with the question all of us have ask every Spring, uh, filing season: How should we file our taxes this year? PT has some thoughts about getting taxes done via software, a retail tax preparation shop or a CPA in... Read more →


Basketball fans tell me there's some important college hoops tournament entering its final stages this week. I don't care about that. But I am jazzed about Robert G. Nassau's tax bracketology. You might remember that a couple of weeks ago Nassau, director of the Syracuse University College of Law Low-Income Taxpayer Clinic and a professor of practice at the college, selected 64 of the "finest, taxpayer-friendly sections" in the Internal Revenue Code. Although there's not been any network television coverage of the competition, the tax provisions have been fiercely fighting for the top tax code spot. They're almost there. Nassau... Read more →


Living abroad offers a lot of exciting experiences. But you'll still share one thing with all of us you left here in the United States: tax filing. If you are a U.S. citizen or resident alien, the rules for filing income, estate and gift tax returns and paying estimated taxes are generally the same whether you are in the United States or living outside the country. Why? Because your worldwide income is subject to U.S. income tax, regardless of where you reside. This filing season, though, some U.S. taxpayers living in other countries might find their tax tasks easier and... Read more →


The first-time homebuyer credit has been in the news lately because of a computer glitch that slowed processing of some returns on which the original 2008 version was being paid back. As we all are painfully aware, this boondoggle tax credit was created to prop up real-estate related campaign contributions the housing industry after it crashed under the weight of ill-advised subprime loans to unqualified buyers mortgage loan greed. Its first incarnation -- the one that's caused the most recent IRS and taxpayer trouble -- actually was an interest-free $7,500 loan, not a real tax credit. Subsequent changes to and... Read more →


If you'll owe the IRS this filing season and would like to pay your tax bill electronically, consider EFTPS. The IRS and users of this electronic payment program pronounce the acronym "Eff-Tips." The official long name is Electronic Federal Tax Payment System. Whatever you call it, and I personally have had some less than polite names (also starting with "eff") for it in the past, if you plan to use EFTPS and haven't yet set up an account, you need to get to it soon. Yes, EFTPS is electronic. It's available by phone or online 24 hours a day, seven... Read more →


$1.1 billion in tax refunds waiting to be claimed, but only until April 18

About a month ago, the IRS announced that millions of people didn't file a 2007 tax return. By neglecting this tax task, they left behind $1.1 billion in unclaimed tax refund money. Some taxpayers in every state are owed refunds they didn't claim three years ago. And the IRS still is trying to give this money back. The IRS estimates that half of these potential refunds are $640 or more. But if the negligent taxpayers don't send in a 2007 return by this year's April 18 filing deadline, their money becomes official U.S. Treasury property. Tax records critical before and... Read more →


If Washington, D.C., is going to demand that local governments upgrade their sewer systems, then Washington, D.C., should help pay for the improvements. And what better way than a federal excise tax on toilet paper. The extra 10 cents on every roll of toilet paper was one of the ideas from Omaha, Neb., Mayor Jim Suttle, who's looking for ways to help pay his city's $1.7 billion federally mandated sewer project cost. Given the linking of taxes and bathroom humor, the tax toilet paper proposal pops up across the country now and then. Suttle admits that he got the idea... Read more →


Overcoming tax fears

Tax time evokes a lot of emotions. Anger. Frustration. Despair. Then there's fear. Being afraid of filing holds back a lot folks when it comes to accomplishing their annual required tax tasks. I'm no psychologist and I've never played one on TV. But I have been dealing with taxes professionally for almost 15 years. I've been doing my own returns for longer than that. So I know something about how scary taxes can be. And I have some suggestions in my Bankrate.com story on how you can overcome some common tax fears. The intimidating tax situations read like a horror... Read more →


Delayed homebuyer credit returns to be processed, refunds issued by April 5

Good news for filers who've been in tax refund limbo because of their repayment of the 2008 faux first-time homebuyer credit. The IRS says it has beefed up its staff to manually input the problematic returns that confused its computer system. Once those folks enter the 1040s into the system, any associated refunds should be issued by April 5. A few stragglers might not get out until the following week. But the IRS swears it's on track to get this glitch out of the way and the refund checks on their way to filers, many of whom have been waiting... Read more →


Today is Harry Houdini's birthday. If the master escape artist had been able to free himself from the restraints of mortality, he would have been 137 today. But even the few among us who are as slippery as Harry was still can't escape taxes. We can, however, do the next best thing -- get free tax help. I know you're here at the ol' blog where you've availed yourself to the daily posts and the always fun and informative tax tips series. I really do appreciate your support. But I'm just one person who has a job and a hubby... Read more →


Some people say they want to work forever. Not me. I'm looking to retire as soon as possible. To that end, I've been contributing as much as I can afford to as many retirement savings plans as I can and can. One of those retirement vehicles is a traditional IRA. And no, I didn't convert it to a Roth IRA last year. An examination of my current tax and personal financial situation and my expectation that I'll be in a lower tax bracket when I retire convinced me to stay with the traditional plan. What that means, though, is that... Read more →


IRS computer glitches, delays mar 2011 tax filing season

This has not been a good filing season for the Internal Revenue Service. First, Congress screwed around into December before passing tax laws that apply to 2010 returns. That forced the IRS to push back the start of the 2011 filing season for many taxpayers as it reprogrammed its computers. Then, thanks to a glitch in those computers, the IRS erroneously demanded payments of folks whose direct tax debits are in the works. Now there's a passel of first-time homebuyer credit claimants who are not happy about another IRS glitch that's placed their tax returns, and in some cases their... Read more →


Sen. Claire McCaskill admitted Monday that she owes four years of back taxes totaling nearly $300,000 on a private airplane. The Missouri Democrat said she would pay the personal property tax bill immediately. More importantly, she has told her husband to "sell the damn plane." Photo by whatleydude via Flickr (not McCaskill's troublesome plane!) McCaskill, a former Missouri state auditor, took full responsibility for the failure to pay the $287,000 in back taxes owed St. Louis County. That's where the aircraft is housed. She insisted there was no larger tax evasion scheme, noting that state and county sales taxes on... Read more →


Terrible tax surprises

There's only one good tax surprise: Getting an unforeseen, or larger than expected, tax refund. But there are plenty of bad tax surprises. Missing forms. Wrong statements. A computer crash just as you're about to hit "enter" to e-file your return (and before you backed up the data). The list could go on and on. But so you want be overwhelmed with the bad news, I culled it down to five terrible tax surprises: unemployment income, alimony received, forgiven debt, prize winnings, Social Security benefits. Details on how these seemingly positive situations can turn into tax trouble are in the... Read more →


We've all gotten those dunning letters that include the statement, "If you've already sent in your payment, thank you and disregard this statement." Even the IRS includes that line on its CP-14 notices, the forms it sends to taxpayers whom it believes haven't paid their tax bills in full. Recently, though, the tax agency sent the billing notice to around 200,000 taxpayers in error. And a formal piece of paper from Uncle Sam saying "hand over your taxes now" is a bit more disconcerting than than a crossed-in-the-mail second notice from a magazine subscription facility. "My bad" from the IRS:... Read more →