Don't Mess With Taxes

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 Money placed in the accounts is deductible and can be withdrawn tax free to pay for out-of-pocket medical expenses.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 →

Wow! It's Tuesday night already?! Time sure flies when you're having tax fun! It's been two very full days here in Washington at my inaugural Taxpayer Advocacy Panel. In addition to general administrative and orientation sessions, we've had a couple of special guest speakers: IRS Commissioner Mark Everson and Taxpayer Advocate Nina Olson. In response to a question about the alternative minimum tax, that costly and confusing parallel tax system that affects more taxpayers every year, Everson acknowledged that the situation needs to be addressed: "Both sides of the aisle have spoken. Something needs to be done. The problem is... Read more →

Some homeowners who make a private mortgage insurance (PMI) payment each month along with their loan's principal and interest will be able to get a little extra tax help here. PMI is a policy that as a home buyer you pay for, but it protects your lender in case you default. Generally, you must make a 20 percent or more down payment to avoid this coverage. Once you're in the house, when you build enough equity you might be able to persuade your lender to let you drop the insurance. In the meantime, you gotta pay for the policy. And... Read more →

Just a quick note this morning, as I'm about to get on a plane and I have to finish packing. I'm heading to Washington, D.C., for five days. A tiny bit of it will be personal (looking forward to our dinner tonight, Maxine!). But most of my time will be filled with learning the ropes of the Taxpayer Advocacy Panel. The Taxpayer Advocacy Panel or TAP (ahhh, it's good to be heading back to the nation's capital, home of the acronym and jargon!) is a group of volunteers tasked (see, jargon) with helping the IRS identify ways to improve customer... Read more →

Rejoice fellow Texans! Early Saturday morning Congress approved the state sales tax deduction. That means that those of us who itemize will be able to write off that pesky percentage, which reaches 8.25 percent in some Lone Star locales (like here in Austin) when you count city and county add-ons, that we pay on most of the things we purchase. The sales tax deduction, along with the teachers' classroom expense costs, a $250 adjustment to income available to nonitemizers as well as folks who do fill out a Schedule A, and tuition and fees paid toward college, another write-off that... Read more →

And so the saga of the expired tax breaks continues. First the good news. The House overwhelmingly (367-45) passed a tax measure today that would reinstate the deductions for state sales taxes, tuition and fees and educators' out-of-pocket expenses. Now the bad news. Once again, lawmakers just cannot help themselves. In addition to the tax provisions, the bill makes the previously mentioned (here) changes to Medicare-related fees and opens 8.3 million acres in the Gulf of Mexico near Florida to new oil and gas drilling. And those additions are not sitting well with some Senators, who also must approve the... Read more →

It's a tax dream come true for Dream Go Go dancers and their colleagues at other Norwegian striptease clubs. It's probably made a bunch of 15-year-old boys, whether at that age chronologically or just emotionally, pretty happy, too. The official word in Norway is that exotic dancing is a nontaxable art form. An Oslo district court ruled in May that stripping is art like opera or ballet. This week, Norway's High Court agreed, thereby freeing the nation's clubs from paying the country’s 25 percent value-added tax (VAT), a levy collected not only in that Scandinavian country, but across most of... Read more →

The more things change, the more they stay the same, at least on Capitol Hill. Congress is back and once again is having problems approving some tax breaks that expired last Dec. 31. I've ranted talked about this legislative logjam a gazillion times, so I won't bore my regular readers. (If you're new and want some background, you can check here and here and here and here and ... told ya it was a pet tax peeve.) True, it's still the same Congress, not the new group that was elected last month and which will take over in January. But... Read more →

If you plan on taking advantage of the federal tax credits for energy-efficient home improvements, or even if you don't, check with your state and local tax officials, too. They also might have some tax breaks in this area. The clickable map at the Database for State Incentives for Renewables and Efficiencies (DSIRE) is a good place to start. I just learned that Texas allows homeowners a property tax exemption in connection with solar or wind powered energy systems added to a residence. Wow, so if I can come up with a more personal size wind turbine (like those above... Read more →

I just clicked on an Amazon ad that showed up here on the ol' tax blog. No, no click fraud here. The thing simply caught my eye. The intriguing pitch: QUALIFIES FOR 30% Federal Tax Credit... Best $1,808.00! OK, I bit. I had to see who was using taxes as a selling point. Turns out an Amazon Storefront seller is trying to move a solar panel that he says qualifies for the new energy efficient home improvements tax credits (previously blogged about here). A caveat from the seller: It's good only for areas that get light freezes. He also notes... Read more →

You think my greeting is a bit early, right? Not so, my skeptical little elves. Even as you rush from store to store, online cart to mall, you need to make a little time for taxes this month so that you don't end up with a terrible tax surprise when April '07 rolls around. With that in mind, consider Tax Carnival #7 as part of the holiday celebration. We have a couple of "gifts" with ideas you can put into play now or very soon. A handful of stocking stuffers that might help you keep enough out of Uncle Sam's... Read more →

Just saw an ad for an item that's definitely going on my holiday wish list: Electric scissors. They'll be perfect for all those times I'm just too tired to cut. Even better, they're cordless, so I won't get tangled up in an extension cord when I run. Read more →

Apparently, one problematic outsourcing program at a time is enough for the IRS. The IRS had reached a $103 million deal with IAP Worldwide Services, under which the tax agency would turn over to the private firm responsibility for the filing, storage and retrieval processes at seven IRS centers. The shift was to have taken place on Friday, Dec. 1. But now, under what both sides are calling a "mutual agreement," filing duties at just two IRS centers -- Kansas City, Mo., and Ogden, Utah -- are under IAP management. In a statement, the IRS said the contract was scaled... Read more →

The hubby and I made our annual trek to the mall this week. Black Friday had come and gone and we even stayed out of online shops on Cyber Monday, so we felt it was safe to actually go shopping. It was. Sort of. All I can say is thank goodness we were able to hit the stores well before Christmas and on a weekday. The place was already packed, so I cannot imagine trying to maneuver the mall in a couple of weeks with the gift-giving deadline bearing down. Luckily, we're both buyers, rather than shoppers. We go into... Read more →