Don't Mess With Taxes

Do you have today's party planned? You know. The one to celebrate April 30 being National Tax Freedom Day. Tax Freedom Day, a registered trademark of the Tax Foundation, is the day that we finally have enough cash to pay all our year's tax bills at the federal, state and local levels. That doesn't mean we can quit paying our taxes. If only! It just means that essentially, every penny we've earned prior to today is now enough to cover this year's various tax obligations. This year's National Tax Freedom is April 30, the 120th day of 2007. We've just... Read more →

If you have a few more days to file or you asked for an extension to get your 1040 in to the IRS, when you do finish your taxes make sure you take all the deductions you're eligible to claim. Just to make sure, here are the most popular tax breaks in a few states: Actually, that New York quip isn't too far off. The Big Apple's "Made in New York" program provides a tax credit, free advertising on bus shelters and phone kiosks, and a vendor discount card to help lure filmmakers to the city. The effort was a... Read more →

Congratulations to Jeff and the entire Dupont Chevrolet team on your historic win today at Talladega! Read more →

Now that tax season is over (or mostly over; details on extended deadlines here and in the Tax Calendar in the right column), we have time for some more relaxing pursuits. Like the proverbial motoring of the headline. And who better to provide a road map than Mark Tapscott with his latest Carnival of Cars at Straightline. This week he brings us intriguing, and oxymoronic, news of a maxi Mini, a more optimistic view of GM's future (good news to us Bowtie fans) and, I am pleased to say, my item on stupid tax tricks (if you read it, you... Read more →

A few days before our tax returns were due, the Tax Policy Center held a forum that explored some of the idiotic tax laws that Capitol Hill creates and how the IRS adds insult to injury. Please note the use of the present tense in the last portion of that preceding sentence. Future tense (and future tax stupidity) is implied. The forum's main address, entitled "Stupid Tax Tricks," was by Leonard Burman, Senior Fellow at the Urban Institute and Director of the Tax Policy Center. Some of the provisions, he notes, are simply pork barrel spending dressed up as tax... Read more →

Calling all Volunteers. Shopping volunteers in Tennessee and neighboring states, that is. Starting today and continuing through 11:59 p.m. Sunday, April 29, Tennessee is offering shoppers a spring sales tax holiday. This weekend's April event is a one-time only deal, state officials say. Tennessee's regular fall sales tax holiday will roll around Aug. 3-5. That means in both late summer and this weekend, Tennessee shoppers won't have to pay the state's 7 percent sales tax on items such as qualified clothing, school supplies priced $100 or less or on computers priced $1,500 or less. This Web page lists the qualified... Read more →

In its May issue, Kiplinger magazine takes a look at 10 cities it says are the most tax-friendly. The list is based on data from the latest survey by the Washington, D.C., government of the tax bite in the largest city in each of the 50 states and the nation's capital. Kiplinger chose the rankings for a dual-income couple, with one school-age child and a combined gross income of $75,000 in 2005. For this hypothetical family, the magazine says the national median taxes are state and/or local income levies of $2,486; real estate/property taxes of $2,261; sales taxes totaling $1,336;... Read more →

Today, April 26, at midnight is the deadline for many northeastern taxpayers who suffered through the severe storms and flooding on April 14 through 18. However, some taxpayers in the hardest hit areas are getting even more time. The The IRS announced today that New York state taxpayers in Orange, Rockland and Westchester counties, and New Jersey filers in Bergen, Burlington, Essex, Passaic, Somerset and Union counties now have until June 25 to complete their returns and pay their taxes. The IRS says that its computer systems will automatically identify taxpayers located in the covered disaster area and will apply... Read more →

Back in January, the all-news radio station in Washington, D.C., reported on (and we blogged about) all the tax deadbeats who work or once worked in the federal government. All told, nearly half a million current and former U.S. federal employees have not filed tax returns. Their unpaid taxes come to almost $3 billion. I guess members of Congress don't listen to WTOP as they drive to their Capitol Hill offices, because lawmakers are just now getting around to reacting to the tax scofflaws currently or previously on Uncle Sam's payroll. In a letter sent this week to Dubya, the... Read more →

Actually, Uncle Sam is in the money, thanks to our recent tax filings. The Treasury Department announced today that on April 24, the government set a one-day record for collections of personal income tax. $48.7 billion in tax receipts from individuals was recorded yesterday. The amount reflects taxes that weren't withheld from individuals over the course of the year, but were paid to the government before this year's April 17 filing deadline. Much of the record cash collection, say tax experts, came from money owed on income from investments or profits from sales of those holdings. That's what happened to... Read more →

If ever a bill was welcome, it was the gas company statement we got this week. Just days after we had to come up with cash for the IRS, our local natural gas company dunned us a whopping $2.52. That's right. Two decimal point five two. Not that our gas bill is ever outrageous, even in the couple of weeks each winter when we have to turn on the furnace it fuels. But this has to be the smallest utility bill I've ever received, even going back to when I was single, living alone in Lubbock, Texas, in a studio... Read more →

The controversy over use of private debt collectors to bring in some unpaid taxes has been percolating on Capitol Hill almost since the IRS hired the firms. The proposal survived an early regulatory roadblock, as well as legislative efforts to kill it last Congress and again in the new 110th session. Even the loss of one of the program's original collection companies (the Austin firm and the IRS mutually agreed to end their deal back in February) didn't stop the effort. Now, the former head of the Senate Finance Committee is trying to ensure that it continues unimpeded. Charles Grassley,... Read more →

Those are just a couple of things that Senators and Representatives fiddled with when they returned to Washington, D.C. last week after a brief break. Many of us, however, were focusing on our personal taxes, so the lawmakers' efforts escaped close scrutiny, at least from this blog. Time to remedy that. Here's a quick chronological look at some of the tax measures that moved, at least a little, through the lawmaking maze last week. True, it will take a while for any of these measures to have a practical effect on us. And truer still that some proposals might not... Read more →

A while back, I opined that homeownership isn't for everybody. In that post, I was focusing on folks who over-extended themselves to buy a house. Too many of them didn't have a solid financial foundation and relied on "creative" and/or subprime mortgage loans to buy. We've all seen how that turned out. But Jack Hough, writing for SmartMoney.com, says Renting Makes More Financial Sense Than Homeownership, regardless of your financial situation. In the article, Hough says he could easily buy a house, but prefers to rent and put his money into stocks. He contends that businesses are great investments while... Read more →

For you musically inclined readers. I wanted to bring you the results of TurboTax's TaxRap video contest. I know the suspense has been killing you! I'm sad to say that my fave didn't win. The $25,000 top prize went to Christian Pulfer, a 28-year-old real estate investor from Brooklyn, N.Y. Pulfer’s entry, “It’s Just a Breeze…G,” was selected by guest judge Vanilla Ice from more than 370 homemade rap videos. For your viewing/listening pleasure, just click the arrow below. Some good visual effects and lots of mentions of the sponsoring company no doubt helped secure the win for Pulfer. And... Read more →

"Should the income tax system include a tax credit for short taxpayers and a tax surcharge for tall ones? This paper shows that the standard utilitarian framework for tax policy analysis answers this question in the affirmative." That's the premise of the academic paper by Greg Mankiw and Matthew Weinzierl. As someone married to a 6' 2" man, I am pleased to report that the Mankiw/Weinzierl proposal is satirical. Their parameters would put the hubby solidly in the tall tax category. They didn't look at women's heights, but I don't think my 5' 6" frame is short enough to get... Read more →

The monument to the Texians who won the Battle of San Jacinto, securing Texas' independence from Mexico on April 21, 1836. Sure we became the Republic of Texas on March 2, 1836, when the fledging government declared independence from Mexico. Then came the hard part. None of the new Texas patriots survived the siege of the Alamo four days later. It was just as grim on March 27, when more than 350 Texas Republic soldiers, who had surrendered at Goliad, were massacred. That did it. Enough is enough. You just can't do things like that. And we proved it at... Read more →

For most folks, tax season is over. There are some special situations where 1040s aren't due for a while longer (details in this earlier blog). And around 10 million of us requested extensions to fill out the forms in a few months. Of the 127 million or so folks who have filed, most prefer not to think of taxes again until next year, and probably not until next April. But you can help make the 2008 tax season easier and less costly with a little tax planning right now. One of the easiest tax moves to make is to give... Read more →

On Tuesday, the IRS learned to be careful what it asks for. The agency has been pleading with us for years to e-file. And on April 17, so many TurboTax users e-filed that the company's servers were unable to handle the tax crush. That meant that the returns of hundreds of thousands of taxpayers technically didn't make the deadline, putting them into a penalty and interest paying situation. But don't panic if you were one of the unintentionally past-due filers. The IRS says that taxpayers who weren't able to e-file Tuesday using Intuit software products (TurboTax, its Free File version... Read more →

Mark W. Everson, who has served as Internal Revenue Service Commissioner since May 2003, will leave the tax agency next month to become president and chief executive of the American Red Cross. During Everson's tenure with the IRS, he focused on improving taxpayer service, continuing modernization of the agency's systems and enhancing enforcement actions. Taxpayer service is always a sticky topic. The agency's Web site is among the best, but folks who don't depend on the Internet say the technological focus has come at the expense of less computer-savvy taxpayers. And the increased enforcement activities have included the use of... Read more →