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December 2011

Taxes were a big topic as 2011 wrapped up. Most of us were looking for ways to pay less when we file next year. Others were concerned that those who can afford it aren't paying enough. Although 2011, most of the 6 easy year-end tax moves that I discussed last week at my other tax blog can be applied in 2012, too. The tax credit for home energy improvements and the itemized tax deduction for state and local sales taxes officially ended on Dec. 31, 2011. But Congress might reinstate them for the coming year. Stay tuned. Meanwhile, there will... Read more →


Those gift packages handed out to the first child born each New Year's Day sure are nice. But if you're hoping your baby might be the recipient of such goodies in early 2012, you might want to change your timing expectations. If your son or daughter enters your life before the ball drops in Times Square, the the new addition will provide you something even better: substantial savings on your 2011 tax return. The full year tax bonus comes because tax law allows parents to claim child-related tax breaks no matter how early or late in the year a child... Read more →


What do the Pope and tax cheats have in common? Italy wants all of them to pay more taxes. OK, it's not specifically Pope Benedictus XVI that Italian tax collectors are after. Rather, the country reportedly is pressuring the Roman Catholic Church to start paying taxes on its massive property portfolio. The tax collections, say supporters of Prime Minister Mario Monti's proposal, could help Italy weather its economic crisis by raising ups to 800 million euros. That's just over $1 billion in United States currency. They also argue that it's the proper thing to do. It's unfair, they say, that... Read more →


Although tomorrow is the last day of 2011, today is the last business day. That means it's the last day you can do something about your retirement savings for the year. If you let your 401(k) and IRAs slide this year, make one of your 2012 goals be to beef up your nest egg. An easy move is to take that 2 percentage points lopped off your Social Security taxes for the next two months and put it into your company retirement plan or your individual retirement account. Keep making those contributions if/when Congress does extend the tax cut through... Read more →


Companies reap benefits of executive stock options via big tax savings

It's no secret that it's great to be a top executive. Well, it's also not so bad to be the company offering some of those top-level employee perks. Corporations that granted executives unusually large packages of stock options shortly after the market collapsed three years ago are now beginning to benefit, too, in the form of tax savings, reports the New York Times. "Thanks to a quirk in tax law, companies can claim a tax deduction in future years that is much bigger than the value of the stock options when they were granted to executives. This tax break will... Read more →


Romney refuses Occupy Iowa demand that he release his tax returns

Most Iowans are trying to decide which Republican presidential candidate they'll support in the state's upcoming caucus. One group, however, already has decided on Mitt Romney. But what they want is only tangentially related to Tuesday's electoral gatherings across Iowa. Occupy Des Moines is demanding that Romney and Wells Fargo release their tax returns and that the former Massachusetts governor return money donated to his 2012 presidential campaign from Wells Fargo PAC and Wells Fargo employees. Good luck with that, especially the give-back-money part. Arrests follow protest: The protesters, 10 of whom were arrested after they banged on the Romney... Read more →


Pay January mortgage now to get added interest deduction

If you're still looking for ways to reduce your 2011 tax bill, consider making your January mortgage payment now instead of early next month. Accelerating your house payment even by just a day will get you an additional tax deduction on your Schedule A for the interest paid. And that advice earns it recognition as the last Weekly Tax Tip of 2011. No, it's not prepaid interest, which usually isn't fully deductible in the tax year in which it's paid. Unlike rent payments, which you give to your landlord upfront to cover your upcoming occupancy period, house payments are made... Read more →


Kim Kardashian's state tax bill too low, say proponents of Calif. millionaires' tax

Poor Kim Kardashian. She suffered through a tough last few months of 2011. Her extravagant Aug. 20 fairy tale wedding was followed 72 days later by a divorce filing. Then Kim and her family faced relatively tough questions during a Barbara Walters televised interview. Walters had the temerity to call the family talentless. And now a public policy activist group is slamming Kim for not paying more California taxes. The Courage Campaign says that although Kim reportedly made more than $12 million in 2010, she paid only 10.3 percent in Golden State taxes. That's just one percentage point more... Read more →


I love my Chevy Cavalier. Carlos -- yes, a la Stephen King, we name our vehicles and Carlos is what I call my current auto, at least when he's running well; he's got some other less printable monikers when he occasionally acts up -- has been a reliable ride for almost a dozen years. He did a great job taking me from South Florida back home to Texas. The hubby drove Michael, our SUV, as we formed our mini-convoy back to the Lone Star State in 2005. And Carlos ferried my cousin and me on our "recapture our youth" tour... Read more →


There's still time to make financial moves that could save you some much-needed cash, as well as reduce your 2011 tax bill. So in these last few days of the year, check out the year-end suggestions on ways to: Cut your taxes, Shape up your investments, Ramp up your retirement savings, Maximize your giving, Improve your small business, and Deal with general financial details. You've got four days until Dec. 31, so hurry! Read more →


It's a good thing that we Texans don't have to pay a state income tax. Think of how much we'd be shelling out with that on top of the estimated $400,000 a month we're fronting our governor in his fruitless bid for the Republican presidential nomination. That's right, pardners. Regardless of whether you voted for Rick Perry to head our state or support his apparently futile bid to be the GOP opponent of President Obama next November, all Texans are paying for Perry's political forays via his security detail. The Texas Tribune's examination of public records show that the Texas... Read more →


The 12 Days of Christmas are used as hooks during the countdown to Dec. 25. I'm guilty, last year doing a 12 Tax Tips of Christmas series. But the 12 days in the song actually begin on Christmas Day and represent the dozen days between the birth of Christ and the arrival of the Magi in Bethlehem, which is then celebrated on Jan. 6 as the Feast of the Epiphany. Since today is the beginning of the 12 days and we have reason to celebrate since Congress sort of wrapped up its 2011 business, including a two-month extension of the... Read more →


This week before Christmas was all about the payroll tax cut extension. So it's no big surprise that I blogged about this tax battle three times last week at my other tax blog. On Monday, there was payroll tax uncertainty. Tuesday, the payroll tax was in limbo. And on Friday, the lower payroll tax rate was safe. For two months. Since the payroll tax -- and unemployment benefits and payments for doctors who treat Medicare patients -- will expire on Feb. 29, you can be sure I'll be talking about these subjects again early and often in 2012. You can... Read more →


"'Twas the Night Before Christmas," also known as "A Visit From St. Nicholas," is one of my favorite poems, holiday or otherwise. Or it was before the lawyers got hold of it. Check out the beginning of Clement C. Moore's Christmas verse on the left side of the table below, with the attorneys' rewrite on the right. Click on image for larger view. You can continue reading the side-by-side of the original poem and the legal version at TaxProf Blog, which gets big Christmas kudos for sharing this comparison. If you prefer, settle down for a short winter's read of... Read more →


December is National Eggnog (or Egg Nog if you prefer) Month. And today, Dec. 24, is National Eggnog Day. I like the drink plain, but many folks consume it only after it's been spiked with plenty of rum, bourbon, brandy or other alcoholic beverage. The dairy industry obviously is celebrating today since the traditional eggnog recipe calls for plenty of eggs, milk and cream. That recipe also calls for bourbon. KitchenProject.com cites spiced ale or wine as the potent potable used in this holiday beverage, first mentioned in early 17th century toasts to one's health. Punchbowl.com says that Germans tend... Read more →


Thanks so much this Christmas Eve Eve to Debbie Whitlock for having me on her Femme Finance radio show today. We had a great time talking about what legendary Christmas experts can teach us about finances at this time of year. Even better, most of this financial advice, from Ebenezer Scrooge's and the Grinch's changes of heart to Buddy the Elf's already overflowing Christmas spirit and Elvis' (yes, the King) sad holiday song, can be applied to the other 364 (or 365 since 2012 is a Leap Year) days of the year. Read more →


4.2 percent payroll tax rate in place through Feb. 29

Congress delivered a Christmas Eve Eve present to millions of American today by approving a two-month extension of the 4.2 percent payroll tax rate. The gift was grudgingly given by the House, which just two days ago rejected a Senate plan to keep the payroll tax lower for the first two months of 2012. And it was rewrapped in slightly different legislative paper. This new bill, H.R. 3765, still extends the lower payroll tax rate for 160 million workers, maintains unemployment benefits for millions more and keeps the amount doctors now get paid for treating Medicare patients. It also retains... Read more →


The payroll tax cut is back! That's good news for Santa, who now can send back most of the coal he ordered for House Republicans who blocked a short-term extension of the payroll tax cut, Medicare payments to doctors and unemployment benefits that are set to expire on Dec. 31. And it's even better news for the 160 million workers who would have seen a tax increase next year and the millions who are out of work and depend on unemployment benefits. But it's not such good news for House Speaker John Boehner (R-Ohio) and the hard-line segment of his... Read more →


Tax and financial fun throughout 2011

Since Congress has sputtered to a stop as 2011 draws to a close over, among other things, the payroll tax issue, I thought it would be fun to look back at the rocky road lawmakers have stumbled along throughout this year as they tried to deal with other financial, tax and deficit reduction plans. Payroll tax rate cut extension: Since it's freshest, let's start with the competing payroll tax extension proposals. You can examine the House and Senate payroll tax plans in my cleverly named post Comparing the competing House and Senate payroll tax cut proposals. There's still a very... Read more →