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September 2011

What would America do without rich people? They are our royalty. We love them. We hate them. We all want to be them. And we think it one day could happen to us, although some folks have some pretty unrealistic views as to how they'll attain their wealth. So whenever a rich guy talks, we listen. In the recent tax debate, investing guru Warren Buffet has held our attention. We sat up when he pointed out that his secretary pays more taxes than he. That's not fair, says Buffett, who then proclaimed that rich people should pay more to the... Read more →


I'm getting on a plane today to head to the Financial Blogger Conference in Chicago. The last time I flew, in July to the IRS Nationwide Tax Forum in Dallas, airline taxes were a hot topic. Back then, the Federal Aviation Administration's ability to collect airline taxes had lapsed, creating confusion (and hope) that some passengers would get a tax refund. No such luck. This time it's new airline taxes that are on the radar. As part of his jobs/tax reform/deficit reduction plan, Obama is seeking higher fees, aka taxes, on airlines and passengers. The prez wants to immediately raise... Read more →


Minnesota electorate could decide fate of Vikings' proposed stadium with tax vote

The Minnesota Vikings are 0-3 on the field. It looks like they also might lose big at the ballot box. The NFL team wants a new stadium. Ramsey County has offered to pay about $350 million of the $1 billion retractable roof project, sharing the costs with the team and the state. The county would pay its share with a half-percent increase in sales taxes. But residents who attended the Ramsey County Charter Commission hearing this week told the panel they don't want to pay the tax. They believe that most of their neighbors agree with them. In fact, they... Read more →


The prez covers a lot of ground in Living Within Our Means and Investing in the Future, his plan for creating jobs and eventually reducing the deficit. But because the 80-page document also calls for tax increase and new taxes, it doesn't have a chance of being approved as is. Still, people are curious. So I talked with some tax and financial folks and put together a look for Bankrate at individual taxpayer winners and losers in the Obama plan. At least it gives us a few more things to argue about as we await deficit reduction action (or lack... Read more →


I went to the dentist this week. Thanks to the hubby's workplace insurance coverage, I didn't have to pay the whole bill. Photo by 123light via iStock But I had to pay enough that I wished he had signed up for a flexible spending account. Sometimes called a flexible savings account and usually referred to by tax and HR wonks by the acronym FSA, these workplace accounts allow you to put aside pretax money that you can use to pay expenses not covered by insurance. FSA advantages -- and downsides -- are this week's Weekly Tax Tip. Two types of... Read more →


Tax Court grants innocent spouse relief to gambler's ex-husband

I love it when real life taxes coincide with my tax scribblings. Take the latest Weekly Tax Tip. It dealt with innocent spouse issues. And what just happens to pop up on the tax radar a few days later? A U.S. Tax Court ruling granting a husband innocent spouse status because he didn't know the full extent of his wife's gambling winnings. Leonard Harbin filed a petition with the Tax Court seeking relief from joint and several liability for his and his now ex-wife's taxes. The Internal Revenue Service disagreed, saying that Harbin didn't qualify for innocent spouse relief because... Read more →


It's no surprise that most of New Jersey's lawmakers aren't Jersey Shore fans. They're not in its target demographic. That also explains in part why N.J. Gov. Chris Christie nixed a controversial $420,000 state tax credit for which the show had applied. But only partly. In addition to its inane and often offensive content, Jersey Shore wasn't doing New Jersey any favors. Some New Jersey assembly members had protested the state paying for a program that reflects badly on the Garden State. The tax break dubbed the "Snooki subsidy" would have helped pay for the first season of the hit... Read more →


A new poll of American youth finds that they tend to agree with elder financial guru Warren Buffett that richer folks should pay higher taxes. OK, the poll is very unscientific. Our Time, a Washington, D.C., nonprofit that's "standing up for all of us under 30," conducted it via Facebook. But really, how else do you connect with these kids today? "There are enormously wealthy people in this country who can afford a higher tax rate, and the feedback we received from our members certainly supports that," Our Time co-founder and president Matthew Segal said in a news release announcing... Read more →


Amazon has been battling with, and bribing, states across the country in an effort to maintain its tax-free online sales. From South Carolina to Texas and now California, the onlline retail giant has convinced state lawmakers to waive collection, at least temporarily, of sales taxes on products Amazon sends to customers in those states. After California took a hard line this summer and enacted a law to collect its 7.25 percent sales tax from all online retailers, Amazon ramped up the no-tax fight. It severed its association with all of its affiliates. Then it launched an effort to put the... Read more →


Talk is important when it comes to taxes, in both personal return filing and on Capitol Hill where lawmakers are looking for ways to reduce the federal deficit. Both situations were the topics of posts last week at my other tax blog. On the personal level, when a couple files a joint tax return, each is equally responsible for any tax liability. If one spouse takes the lead in doing taxes -- in the hubby's and my marriage, that's me; you really didn't expect otherwise, did you? -- the other partner needs to check out the Form 1040 before signing... Read more →


Did you convert your traditional IRA to a Roth last year? Are you having second thoughts as you watch the markets stumble, leaving you with a big tax bill on a no longer very big retirement account balance? Then you have a chance to change your mind. You can undo your IRA conversion. It's known as a recharacterization. But you have to do so by Oct. 17. And there are some things you need to think about before you decide on an IRA do-over: Figure your recharacterization amount. Time your move. Think long term. Consider the two-year tax deal. These... Read more →


I am a feline fan, so I love the story of Willow the cat. The calico disappeared from her Colorado home five years ago and apparently spent most of that time in the Big Apple. Now Calico is headed home with her original family. Visit msnbc.com for breaking news, world news, and news about the economy Jamie and Chris Squires, along with their three kids came to New York City to pick up Willow. But before heading back west, they stopped by the Today show. Five years ago Willow slipped out of her Colorado home when a contractor left a... Read more →


How to avoid federal budget catastrophe

I just spent the last hour and a half listening to a group of fiscal and political experts discuss ways to avoid a federal budget catastrophe. The bottom line: These folks, not Congress, need to be dealing with our financial troubles. Members of the Tax Policy Center panel included: Leonard Burman, Daniel Patrick Moynihan Professor of Public Affairs at Syracuse University and Affiliated Scholar with the Urban-Brookings Tax Policy Center; Michael Ettlinger, Vice President for Economic Policy at the Center for American Progress; Alan Viard, Resident Scholar at the American Enterprise Institute; and David Wessel, Economics Editor at the Wall... Read more →


We're inching toward possible fundamental tax reform. It will be a slow and painful process because of the many tax breaks that individual taxpayers and companies can claim. I completely understand that. I have a mortgage. I don't want to give up that interest deduction for promised filing simplicity and a lower overall tax rate until I can see the actual numbers as to how the trade-off will affect, and by affect I mean benefit, me. That "show me" factor will be key in getting any tax code changes approved. So far, most of the visuals available tend to illustrate... Read more →


Stephen Colbert explains Obama's tax-the-rich plan

Although Obama's millionaire tax has little -- OK, no -- chance of passage, it's been great fodder for serious tax watchers and especially for the not-so-serious ones. For now, let's count me as a serious tax observer. My takeaway from the Obama deficit reduction/tax reform proposal: "This isn't class warfare, it's math" is going to be a great 2012 re-election campaign spot. That phrase also caught the ear of Comedy Central funnyman Stephen Colbert, who devoted a recent show segment to the Obama tax-the-wealthy proposal. The Colbert Report Get More: Colbert Report Full Episodes,Political Humor & Satire Blog,Video Archive Enjoy... Read more →


Innocent spouse tax options, extra time

Most married taxpayers do a lot of things together, including filing taxes. That's usually a good idea, since more tax breaks are available to the couple filing a single 1040. But if one spouse takes some tax shortcuts, the other spouse ends up in just as much tax trouble. That's why sometimes it pays to file separately. In the cases where a spouse can't or doesn't take such tax preemptive measures, there's also the possibility of getting some relief from the Internal Revenue Service via its injured and innocent spouse programs. These opportunities to ease the unexpected tax costs caused... Read more →


D.C. enacts new tax on high earners

Don't panic all your readers in the rest of the country. Obama's proposed millionaires' tax is nowhere near being law. The D.C. in this case is the specific geographic area known as the District of Columbia. That city's council, by a 7-to-6 vote, agreed Tuesday, Sept. 20, to hike the income tax rate from 8.5 percent to 8.95 percent on District of Columbia residents who earn more than $350,000 a year. The previous top rate applied to Washington, D.C. residents who earned $40,000 or more. The new rate will affect about 6,000 District residents. But they can take comfort in... Read more →


Tax juggling on Capitol Hill

In surveying recent happenings on Capitol Hill, I'm reminded of the Flying Karamazov Brothers. When I first saw these guys, which happened to be many years ago in Washington, D.C., they juggled a lot of disparate -- and sometimes dangerous -- items. Juggling of a potentially treacherous nature definitely comes to mind nowadays when you look at all the tax proposals being tossed around in the nation's capital. The White House has proposed a jobs plan and a deficit reduction/tax reform measure that call for a combination of payroll tax cuts, business tax credits and the provision that's been getting... Read more →


Top 10 highlights of Obama's deficit reduction plan

Thanks, Dave, for getting political last night. In addition to having Dr. Jill Biden, the vice president's wife, as a guest on his CBS Late Show, David Letterman's Top 10 list focused on the president's latest fiscal proposals. If you don't have time to watch the video, here are the Top 10 Highlights Of Barack Obama's Deficit Plan: 10. Pay everything off with a giant bake sale on the White House lawn, 9. New 10,000 percent tax on waffles -- no way people are giving up their waffles! 8. Congressional Super Committee now reports to even more powerful Super Duper... Read more →


All of us tax procrastinators have almost a month to get our 2010 tax returns to the Internal Revenue Service. If you, like me, are still finishing up your 1040 for last year, you can check out the countdown clock there in the left column so that you don't miss the ultimate deadline. And the 2011 tax filing season doesn't start for three and a half months. But that hasn't stopped folks from getting out their handy calculators and coming up with projections of inflation-adjusted tax amounts for 2012. Actually, it's not too early to start thinking about 2012 taxes.... Read more →