Don't Mess With Taxes

If you're planning to party tonight, by now you've already worked out the logistics. You know where you're going, who you're going with and who will be the designated driver. That last decision is critical, since for most folks, a new year must be met with a toast of an alcoholic beverage. Champagne is the traditional choice, but it's not the only one. Some folks don't like the fizz. Others don't like the price. But if you're watching your weight, the classic celebratory beverage might be a good choice. A 4-ounce flute of bubbly contains 105 calories. Wine, either red... Read more →

Excuse me today for taking a break from taxes so that I can continue to revel in last night's amazing gridiron feat by my (and the hubby's) alma mater. In case you missed it, and you probably did since it was broadcast on the NFL Network, Texas Tech's Red Raiders staged the biggest comeback in college bowl game history, taking the Insight Bowl title in overtime after spotting the Minnesota Golden Gophers a 31-point lead. You can read all about it on the Tech site or in this International Herald Tribune article, since it obviously is a worldwide story. It... Read more →

The 2006 tax year is slipping away and with it your chances to cut your coming IRS bill. The most crucial thing right now is any stock moves you need to make. Call your broker or log onto your online account and sell those losers ASAP. If you don't, you could be stuck owing more capital gains tax than you should. Sure the long-term rate is only 15 percent for most of us, but if you can zero it out, then what in the heck are you waiting for? After that's done, you've got a bit of breathing room. Most... Read more →

To do by Sunday: Have a baby. You say you're not having a baby? Not adopting one either? Not even thinking about it? Well, you're obviously not with the tax-influenced child-bearing program. According to a recent New York Times story, the end of December -- actually today, Thursday, 12/28 -- will probably be, statistically speaking, prime delivery day for most U.S. mothers. Or as it's called in the story, National Birth Day, aka the day with more births than any other. Excuse me. The hubby is hyperventilating. I'll be right back. OK. He's fine. I assured him that this post... Read more →

Back in August, a Washington, D.C., federal appeals court judge ruled in Murphy v. The United States that the federal government cannot tax money individuals receive as compensation for emotional distress and other intangible injuries. Now, however, the full federal appeals panel has overturned the ruling. Yep, Murphy's Law does indeed apply to other, more official laws, too. I'm not a trained legal scholar, but I am glad that this issue will get another look. No, I'm not arguing that Uncle Sam get a piece of every single dollar any of us makes. But this case seemed at best problematic,... Read more →

Still sitting there staring at your Christmas tree, which looks so sad and bare without any gifts under it? Well, here's something to occupy your time: Visit the 80th Carnival of Personal Finance. Hosted this week by My Personal Finance Blog, this post-holiday carnival is not just Christmas leftovers. There are plenty of piping hot new offerings in easy to sample categories such as budgeting/frugal (Diets and Dollars), credit/debt (Sticky Fingers) and the always handy other (Law of Tenfold Return). Of course, there are many more personal finance areas, including taxes, where you'll find my item on how the IRS... Read more →

Are you back from your gift exchange excursion? Got rid of that horrible sweater from dear old Aunt Trudy? Good. Now you can work on your taxes! Honestly, now is the time to be thinking about your 2006 tax bill and how you can lower it. Let's face it. After Jan. 1, when it comes to our current tax bills, the only tax-saving option for most of us is contributing to a tax-deductible traditional IRA, if we're eligible. But in these waning days of 2006, tax savings still abound! You already know the easy ones: Give to your favorite charity... Read more →

We'll be opening presents, chowing down on holiday ham and corn pudding, making long distance calls to the relatives and watching the Cowboys beat the Eagles (I hope!!!). That's pretty much gonna occupy my day, so no more blogging until the 26th. In the meantime, enjoy these shots of our tree, pre-package plundering, and one of our new ornaments. Each year, we try to find a new decoration for our tree. We found a couple this time, or rather the hubby did while I was in D.C. a few weeks ago. He did a fine job with both, but I... Read more →

To celebrate the convergence of the Christmas story and the IRS, we are introducing today a new feature on Don't Mess With Taxes: a glossary. I know, I know. You're asking just exactly how do Christmas, taxes and a glossary come together? The answer: One of our glossary's first words is MAGI, just like the three wise men who traversed afar. OK, you're right. It's an acronym. But since it's Christmas Eve, I couldn't resist. In tax parlance, MAGI, or modified adjusted gross income, is a measurement of how much money you make. It's calculated by starting with your adjusted... Read more →

Apparently, Santa's appointed rounds have been severely hampered after he lost a battle with an IRS examiner. Thanks to taxalicious for finding and sharing this video. Now ride, Santa, ride! And a Merry Christmas and Happy Holidays to all! Read more →

Still searching for that perfect gift for the tax geek in your life? You can stop. Here are some great tax-related items. Of course, given the late date, you might have to print out the image, put a bow on it and then deliver the actual present later. But these are pretty cool, so your tax geek gift recipient might not mind the wait. It sorta mirrors the whole convoluted, slow tax process itself. OK, enough talk. Let's go shopping! For the historically inclined, consider this framed reproduction of the original 1913 inaugural Form 1040. It's four pages long, including... Read more →

The IRS this afternoon announced how it plans to handle the tax legislation -- the Tax Relief and Health Care Act of 2006 aka extender tax breaks -- that was signed into law just a couple of days ago. The first thing to know is that the 2007 filing season will begin on time. You can still file your return next month as soon as you get all your necessary documentation. But, and it's a big but, the IRS warns that the recent law changes mean it won't be able to process a "small percentage" of individual tax returns until... Read more →

Dan Meyer, host of the always informative accounting blog Tick Marks, once again marked the holiday season by citing his 12 Blogs of Christmas. I am honored to report that I made the list this year, being the 10th blog in his second annual list. You can see a complete roundup of the 2005 and 2006 Christmas blogs here. And to paraphrase from my favorite holiday tale, God bless us financial fanatics, everyone! Read more →

One of our Christmas gifts is stranded in Denver, along with 4,700-plus erstwhile airline passengers. Across the pond, holiday travelers in foggy London town found air travel there to be just as frustrating. Mother Nature certainly has a wicked way of saying happy holidays! We're hoping that since Colorado's snow has stopped, roads and runways will soon be cleared and our gift basket still might make it to our relatives in time for Christmas. As for those folks who've been stuck at Denver International and London Heathrow, I definitely can sympathize. Just last week I was part of a similar... Read more →

It's finally official. After being dead almost a full year, a group of individual and business tax breaks were resurrected. Another batch that would have expired this Dec. 31 has been given at least one more year of tax life. Although much attention was paid to three popular write-offs, the Tax Relief and Health Care Act of 2006 (H.R. 6111) that Dubya signed into law today actually included 23 dead or near dead tax deductions. In addition to the sales tax, tuition and fees and educators expenses deductions, the new law also extends several provisions in the Energy Policy Act... Read more →

Dec. 19 is one of my all-time favorite days. It was on this day in 1843 that "A Christmas Carol," or as its author Charles Dickens called it, a "Ghostly little book," was published. Three days later, the first edition was sold out. That early popularity has endured. "A Christmas Carol" is probably one of the most adapted books. It's been performed innumerable times on stage, radio, film and television. Wikipedia lists 17 video variations, from animated (Bugs Bunny, Mickey Mouse and Mr. Magoo) to Kermit the Frog's Bob Cratchit opposite Michael Caine's Scrooge (and yes, Miss Piggy played Mrs.... Read more →

The IRS has decided it's time to make a few extra bucks using our personal data. The tax agency has announced that tax year 2002 and 2004 filing statistics, sorted by Zip Codes, are now for sale. You can pay $25 for a single state or $500 for info on taxpayers across the entire country. You'll be able to see, among other things, how many total returns, by income range, were filed where you live, how much in taxes was collected from you and your neighbors, how much was from self-employment income reported on Schedule C, how many of your... Read more →

After reading over yesterday's blog entry about the expected confusion because some tax breaks were passed too late to make it onto 2006 forms, the hubby had some follow-up questions. Haven't I trained him well? He not only reads the blog, he wants to know more about taxes! But back to hubby's inquiries, specifically: Why didn't the IRS just wait for Congress to act before sending the forms to the printer? Wouldn't it have made more sense to hold off since so many people are affected by these tax breaks? What's the harm in waiting until final passage and pushing... Read more →

I'm back home, still digging through the e-mail accumulation (literally thousands from my various accounts), catching up on year-end work for clients (payment is paramount) and trying to take care of some personal things (home repair crises seem to come in groups and at the most inconvenient times). But I did want to get something up on the ol' blog today, primarily because my mother just chastised me for slacking off. Don't believe me? Here's the transcript of the phone call I just had: Me: Hi, Mum. I'm home and we got your Christmas gift today. Thanks so much. We... Read more →

If you have a health savings account, the recently passed tax bill has some good news for you. If you don't have one, you might soon, as more employers are utilizing this medical benefit since companies don't have to contribute to them. You can open a health savings account, or HSA, if you have a medical insurance policy with a high deductible: at least $1,050 for individuals and $2,100 for families. Money placed in the accounts is deductible and can be withdrawn tax free to pay for out-of-pocket medical expenses. In addition to the tax write off, the money in... Read more →