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February 2007

January 2007

Direct deposit triple play

The third time's a charm. At least that's what the IRS hopes. This year it's giving filers three ways to directly deposit refunds. New for 2006 returns, you can split your IRS cash back three ways and have it sent to three different accounts. Send some of your refund straight to your checking account. Tell the IRS to put another chunk directly into your savings. And direct a third amount to your IRA. All it takes is filling out the new, half-page Form 8888. But be careful. If you enter a wrong numeral for any of those accounts, you could... Read more →

Kermit: Star of hot new TV show!

No, not the frog. My hometown. The cheerleader who was saved so that the world could be saved is from Kermit, Texas! It was just too personally freaky to be watching the already freaky NBC show "Heroes" last night and see Claire, the indestructible cheerleader, discover that she was born in my hometown. It gets better. Her birth mom still lives there. If only my cousin and I had known when we rolled through Kermit last summer! Apparently, no one in the town knew what was coming. There was no buzz. Everyone in my small West Texas burgh was still... Read more →

Getting interactive with the IRS

The IRS has gone computer calculator crazy! First, tax programmers came up with the withholding calculator to help you determine how many allowances to claim on your W-4. This is probably a good one to play with this time of year. When you get your annual W-2, run some preliminary tax return numbers to see if you'll owe a lot or get back a lot more. Owing the IRS or getting a refund means you're having too little or too much, respectively, taken out of your paycheck, and a large amount either direction is not the wisest way to manage... Read more →

Ratting out tax cheats

As I've mentioned before, I get letters from readers. I love 'em, readers and their questions. However, as I've also mentioned before, I can't answer every question that shows up in my e-mail. Some are technical beyond my knowledge (remember, I'm not an accountant). Others I know I could answer, but they would take time and unfortunately, just like y'all, I tend to run very short of that commodity, especially during tax season when I have a regular writing gig. Others queries, though, where I know the answer off the top of my head or know just where to find... Read more →

I'm from the government and
I'm here to not pay my taxes

While you're working on your return -- and you are working on your 1040 this weekend, right? -- here's an interesting noncompliance tidbit. Nearly half a million current and former U.S. federal employees have not filed tax returns. Collectively, they owe almost $3 billion. Britannica Blog (and thanks to Tom Panelas for pointing out the item) elaborates: "Although I cannot confirm this, I have noticed that PEN (Postal Employee Network) has given the report credence at its website, quoting that 'The federal agency with the highest number of delinquent taxpayers is the United States Postal Service, where 56,652 employees owe... Read more →

No good tax break goes unpunished

New this filing season, and for 2006 returns only, is the credit for previously-paid federal excise taxes on long-distance telephone service. Several readers have dropped me notes about how the claim process is going for them. Apparently, not too well. As noted in this story, you get the choice of claiming a standard amount ranging from $30 to $60 depending on your number of exemptions. Or you can submit Form 8913 with the details of your federal phone taxes from March 1, 2003, through July, 31, 2006. The experiences of Brian in Maryland are pretty typical. He reports that he... Read more →

Overpriced, undersized

Remember your first apartment? If it was like mine, it was tiny and it took most of my monthly income to make rent. Now some exclusive properties have exactly the same attributes. Take, for example, a London home the size of a closet that's on the market for $335,000. OK, it does have a more desirable location, location, location than my first place. The 77-square-foot former storage room (quick math: $335,000 divided by 77 equals $4,350 a square foot) is in Knightsbridge, described by the Realtor handling the listing as "one of the wealthiest neighborhoods in the world." I guess... Read more →

April 17 is new filing deadline. No joke!

No kidding. We all get one more day to work on our 1040s. And the IRS is just as surprised as the rest of us, although probably not as happy about the change as we taxpayers are. This filing season, a perfect calendar storm has produced the convergence of the already-delayed filing deadline, an official District of Columbia holiday and an obscure federal law. The result: More tax time. Most of us were looking at Monday, April 16, as the due date for our 1040s, since the 15th this year fell on a Sunday. But 4/16 is the Emancipation Day... Read more →

Second medical insurance opinions

Following the official debut of Dubya's health care proposal last night in his State of the Union address, the White House has released additional details on the plan. The key component is that folks with medical coverage via work would see the value of their employer-paid insurance show up as a taxable benefit. That means the IRS would want more money from you even though you didn't actually see any more cash in your paycheck. But you'd get a sizeable tax deduction which should, for most folks, cover most of the cost. That deduction would be increased annually for inflation.... Read more →

Taking online education to a new level

Oklahoma Wesleyan University estimates that it costs around $20,000 an academic year for a student to attend. One student, however, might be able to get in for much, much less. Starting Feb. 4, the Bartlesville, Ok., school will auction the fall and spring semester of next academic year on eBay. The bidding starts at one penny and will end on Feb. 10. Anyone can bid -- current students, prospective students, parents, other relatives, friends. The winning bidder doesn't even have to attend; he or she can give the semesters to someone else as a gift. If you're interested, check out... Read more →

Dubya's health insurance tax prescription

GWB, the president who has staked his legacy, at least in the early years, on tax cuts, is going to actually propose a tax increase during tonight's State of the Union address. Of course, for every politician, presentation is paramount. Based on the preview offered during his regular radio address on Saturday, Dubya will begin with the more politically palatable part of the equation: a deduction. He's recommending a new standard deduction for the purchase of health care coverage. Under the plan, families who purchase health insurance would be eligible for an automatic deduction of $15,000; the threshold is $7,500... Read more →

Just close your eyes and listen

Even I, a devoted ailurophile, found this distressing. Yes, it's a headless dog. In place of the canine's cranium is a speaker. Now the pun de résistance, its name: the Woofer. Brendan I. Koerner, in an article in today's New York Times, describes the Woofer "as tacky as a lawn gnome." I think that's being way too kind. But the incredibly icky item (my description), says Koerner, "is a sophisticated speaker system, capable of transmitting the decidedly nonkitschy sounds of Brahms or Thelonius Monk." If you're interested, you can get a Woofer for 599 euros (around $777 U.S.) at POAA.... Read more →

The lure of Alps and low taxes

Another European celebrity has headed to Switzerland, known for its chocolate, Alpine vistas, secret bank accounts and, when it comes to the rich and famous, low taxes. British singer James Blunt has registered with the tax office of the resort village of Verbier. Apparently, he's been a frequent visitor to the town and simply likes it there. Yeah, the town and the country's tax rates that are substantially lower than those of the United Kingdom. Blunt's move comes on the heels of the relocation of Gallic rock legend, Johnny Hallyday, hailed as the Elvis of France. Hallyday made no pretense... Read more →

One of the hardest things about filing your taxes is trying to decipher the forms. You practically have to learn a new, tax- specific language. And the IRS-speak makes that dang VCR manual (yes, a few of us still use those antiquated devices!) seem almost coherent! To help out, Don't Mess With Taxes is gathering some common tax terms and phrases and their plain English meanings in this post. This is an ongoing list, so don't be discouraged if the word that's stumping you isn't here yet. It soon will be. In fact, just go ahead and e-mail it to... Read more →

Sharing the Free File wealth

I meant to mention this in my earlier post about Free File, but ... So here it is now. Seems the IRS Web page that lists this year's participants (click here then "start now" at the bottom) is making sure each gets its day in the spotlight, or at least at the top of the list. Every time I've gone back to the page, either to make sure the link works if I'm including it in a story or posting or to count and see if other preparers have come on board (not yet; still holding at 17), the list... Read more →

Tax carnival reminder

The 10th Tax Carnival is scheduled for Monday, Jan. 22. My tax baby is growing up and going out into the world: The Wandering Tax Pro will be hosting the coming collection. If you have a tax-related item (and please, send tax entries only; check out our submission guidelines), send it the Tax Carnival way. You can see what's appeared previously by perusing past editions at our Tax Carnival archives. Saturday evening is the submission deadline. And while procrastination when it comes to anything connected to taxes is a time-honored tradition, the Carnival Keeper always appreciates contributors who don't wait... Read more →

Finessing Free File

The Free File Alliance, the private-public partnership between the IRS and tax software/preparation firms, kicked off its fifth season on Tuesday with a few changes. The income eligibility limit was bumped up a bit, from $50,000 to $52,000. If your adjusted gross income is that or less, you probably can find one of the participants that'll let you do your taxes and e-mail them at no cost. More notable, refund anticipation loans (RALs) and what the IRS calls "ancillary" products are no longer advertised. I got a call from one of the Free File companies after my story about this... Read more →

Court freezes out tax write-off

Just in case you were wondering, Antarctica is not a foreign country. At least not in the eyes of the IRS. And definitely not when it comes to Dave Arnett's tax return. Arnett of Hayward, Wisc., a state that has its fair share of cold weather, was transferred in 2001 to McMurdo Station, Ross Island, Antarctica. No, he did not royally piss off his boss. Rather, his employer was Raytheon Support Services, which had a contract with a National Science Foundation project at the South Pole site. In filing his 2001 taxes, Arnett excluded the $48,894 he earned while at... Read more →

It's snowing!

That's not big, or even good, news for folks in many parts of the U.S. But here in Central Texas, it's a big and exciting deal, even by Lone Star State standards. Austin's climate is pretty temperate. OK, we get triple digit temps in the summer, but honestly, it's a dry heat. Trust me. I spent 25 years in the summer saunas known as the Mid-Atlantic and Florida. Hill Country winters, however, aren't that bad. At least they haven't been for the two we've been here. In the Panhandle, it's a different story. Snow, often heavy, up that direction is... Read more →

Tax payment time again

I recently had my first "Duh" moment of the 2007 filing season. I was at the IRS' online payment portal, the Electronic Federal Tax Payment System or EFTPS, to make our final 2006 estimated payment that's due today. If you haven't yet filed your 1040ES, don't panic. You can finish it up today the old-fashioned way and get it en route to the IRS with today's postmark. Or you can file your full 2006 return and pay any tax you owe by Jan. 31 and skip this final quarterly filing. It was the third time I've used EFTPS. My first... Read more →