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March 2008

17 ways to save on your taxes

Happy St. Patrick's Day! To celebrate, here are 17 ways to save some green when it comes to your taxes. 1. Get organized. If you haven't started getting your tax materials in order yet, do it now. You've got less than a month until your 1040 is due and you don't want to have to take that Tuesday off just to get your taxes done. There are better ways to spend "sick" days! These checklists from Bankrate, TurboTax and H&R Block will help you get some filing control. 2. Pick your state tax deduction. Compare the state and local sales... Read more →


Social Security taxes: Political and practical considerations

Andrew G. Biggs has some problems with Democratic presidential candidate Barack Obama's proposed changes to the Social Security payroll tax. Biggs, a former principal deputy commissioner at the Social Security Administration, is a resident fellow at the American Enterprise Institute, a conservative think tank. In a recent Wall Street Journal opinion piece, he elaborates on why he thinks Obama's Social Security tax changes won't work. So what Obama proposal prompted Biggs' disagreement? Elimination of the cap on the amount of earnings subject to the Social Security payroll tax. Obama broached this subject last fall and wrote about it in a... Read more →


Louisiana lawmakers exempt rebates

We've got another no-tax state when it comes to the stimulus rebates. Louisiana's state Senate on Friday unanimously signed off on a bill that would guarantee the state will not impose income taxes on the federal tax rebate checks going out in May. The House had previously approved the measure. According to the Associated Press, the bill now heads to Gov. Bobby Jindal, who supports the move, for his signature. More on state tax treatment of the federal rebate money can be found at these earlier postings: No Connecticut tax; possible state stimulus deals Ohio says "no" rebate tax California,... Read more →


IRS has a new leader

Early today, the Senate signed off on Douglas H. Shulman as the new IRS Commissioner. Shulman takes over the country's tax agency during a crazy filing season, with delays from the get-go because of late legislative action by Congress. Then the economic stimulus package and upcoming rebate mailing muddied the tax administration waters even further. And the controversy over hiring private debt collectors to bring in overdue taxes rages on. It's a good thing he's a young guy (age 40). He's going to need as much youthful energy as he can muster to wrangle this agency and its dealings with... Read more →


March 15 is FSA deadline for some

Do you have a medical flexible spending account at work? If so and you ended 2007 with money in the account, you might have a second chance to spend it. But you have to hurry. The ultimate deadline for plans that ended their benefit year last Dec. 31 is March 15. First a quick refresher. If you have one of these plans, commonly called FSAs, you get to put money into the accounts before taxes are taken out. That lessens your tax bite. Then you get to use that pre-tax money to pay for medical costs that would have come... Read more →


Alltop.com is here and we're there

There's a new blog aggregator in town, Alltop.com, and I'm pleased to report that Don't Mess With Taxes is included in the personal finance sites section. Alltop.com is the creation of Guy Kawasaki, blogger, Web master (love Truemors), author and entrepreneur ad infinitum. The approach is a collection of "single-page aggregations," organized by topics such as Fashion, Celebrities, Sports, Gaming, Macintosh, Science, Green, Autos and the aforementioned Personal Finance. You can see the full list here. It's very easy to navigate, with the sites in the various topic pages shown side-by-side. "We have found that feed in our topics pick... Read more →


Tax tips for younger filers

Having a bit of life experience under my belt, I'm a big believer in the philosophy that age is an artificial construct that shouldn't define or limit us, that you're as young as you feel (so I fluctuate between 6 and 86 depending on the day!), and that age is only important if you're wine or cheese. That said, taxpayers at different stages of their lives do have some differing tax considerations. Younger folks in particular often have some special tax considerations. So I was very pleased to speak recently with Anya Kamenetz who writes Generation Debt for Yahoo Finance.... Read more →


Tax trouble for the Queen of Soul

Aretha Franklin is looking for some tax R-E-S-P-E-C-T or at least some tax help. The Associated Press is reporting that the Queen of Soul could lose her home to tax collectors. An unpaid $445 tax bill and late fees from 2005 is about to send her $700,000 Detroit mansion into foreclosure. The singer says it's all a misunderstanding due to an attorney's mistake. Press reports also cite other tax records showing that Franklin owes $18,746 in back taxes and fees for the 2006 and 2007 tax years. Foreclosure proceedings on those debts wouldn't begin until next year. Franklin says she... Read more →


Discussing 'death tax' alternatives

Sorry for that headline. Love the alliteration, but disagree (as detailed in this blog post) with those who use impending mortality as a semantic tool to get the estate tax repealed. Actually, the the estate tax will soon disappear, but for one year only in 2010. Then it is scheduled to go back on the books in a more stringent incarnation the following year. As blogged previously (here and here), lawmakers have been fighting, mostly along party lines, on how to deal with this tax, both in the near and long terms. The discussion on just what to do about... Read more →


Robber gets cash, leaves W-2

Tax preparers in the Des Moines, Iowa, please be on the lookout for a prospective client who needs, in addition to general filing help, some assistance in getting a replacement W-2 form. And by the way, he might pay you in stolen funds. A man who robbed a convenience store made off with about $115, according to the Des Moines Register. But he left the police a great clue. In his haste to clear the crime scene, he left behind his jacket. In a pocket, officers found a W-2 form they are sure belongs to the man. The taxpayer named... Read more →


States mull separate stimulus plans

Thanks to Steve, a reader from Connecticut who wrote to let us know that state will not tax the federal rebate. But wait, there's more from the Nutmeg State. Connecticut also is considering its own state-level rebate program to boost its local economy. According to the Associated Press (via MSNBC), lawmakers in Connecticut, Iowa, Pennsylvania, Tennessee and Wisconsin are floating ideas on ways they, like the feds, could jump-start their slowing economies. The proposals are from both Democrats and Republicans and range from state tax rebates (Connecticut, Pennsylvania) to extended and expanded sales-tax-free holidays (Iowa) to alternative-energy initiatives (Pennsylvania) to... Read more →


More on IRS takedown of Spitzer

Not to kick a man when he's down, although New York Gov. Elliot Spitzer sure is making it easy, but the New York Times has a good article today elaborating on the role of the IRS' Hauppauge office in tracking the [soon to be ex?] governor's alleged payments to the Emperor's Club prostitution ring. According to the paper in Revelations Began in Routine Tax Inquiry, "… the criminal investigation that discovered the tryst began last year in a nondescript office building opposite a Dunkin' Donuts on Long Island." Finally, the Howard Johnson's Motor Lodge across the street from the Watergate... Read more →


IRS money trail led to Spitzer, hooker

Notch up another one to the T-men. The IRS was a key player in taking down New York Gov. Elliot Spitzer, the man who made his political name battling high-finance corruption. That's because it was the money, not the prostitute to whom Spitzer allegedly gave it, that first caught investigators' attention. It seems that governor's "suspicious" money movement prompted a bank to call the IRS which then brought in the FBI's Public Corruption Squad. According to to ABC News, federal agents initially thought Spitzer was hiding bribes. "We had no interest at all in the prostitution ring until the thing... Read more →


Tax Carnival #32: Tax Time Management

This tax-filing season, Leap Year gave us an extra day to complete our taxes. But then this past weekend's arrival of Daylight Savings Time took back an hour of that added day. So that none of us ends up bemoaning lost minutes when April 15 rolls around, the collection of bloggings in our 32nd Tax Carnival should help with Tax Time Management. Since, as the saying goes, time's a-wasting, let's get started. And there's no better place to begin than with a look at some tax laws. Dan Meyer of Tick Marks goes right to the legal top with Employer... Read more →


Take Off to PF Carnival #143

Calling all fans of Doug and Bob MacKenzie, the late, great comedy program SCTV, the Great White North and personal finance advice. You'll find it all in this week's Personal Finance Carnival #143 hosted by the Canadian blogger Quest for Four Pillars. No need for NAFTA here. There's lots of good money advice flowing unfettered across this unguarded Internet border. Such as: Money Under Thirty's reasons why we spend more than we should, prompted by a review of the book "Going Broke: Why Americans Can't Hold On To Their Money." Value For Your Life's tips on how to get your... Read more →


Withholding lessons from filing stats

For the last few years, electronic tax filing has set records as more of us choose this method to get our returns to the IRS. It looks like the 2008 filing season will continue that trend. Through Feb. 22, more than 38 million returns have been e-filed. That's a 5 percent increase over the same period last year. One of the biggest areas of growth, according to the IRS, is returns submitted electronically from home computers. More than 12.3 million returns were filed directly by taxpayers from home, an increase of almost 14 percent from the same time last year.... Read more →


Rebate check notices cost: $42 million

Remember a couple of days ago (in this blog item) I mentioned that the IRS will be sending out letters to 130 million households who filed 2006 returns to let us know about the coming stimulus package rebate checks? Now we're finding out what that information will cost us: nearly $42 million. At 32 cents to print, process and mail each letter, the exact cost is $41.8 million, IRS spokesman John Lipold told the Associated Press. And that's just for the first round of mailings, scheduled to start next week. Another batch is planned for end of the month for... Read more →


Tax promises to keep

Today in 1923, Robert Frost wrote what is arguably his most well-known poem, "Stopping by Woods on a Snowy Evening." Even if you don't know the complete verse, you probably know its closing lines about miles to go and promises to keep. That's how many of us are feeling right about now, with the April 15 deadline bearing down. We've still got a long way to go before we keep our tax-filing promises. Each of us too often has a tendency to look at a daunting task like taxes and push it aside … again. Don't. I'm not saying you... Read more →


Ohio in the "no" column

The "no state tax of the stimulus rebate" column, that is. That word comes directly from the communications staff of the Ohio Treasurer's Office, which dropped me an e-mail with the good news. Thanks, Ohio! Here's the scoop: The "rebate" is merely a return/refund of federal income tax which the recipient previously paid. A refund of such tax is not "income" under Internal Revenue Code section 61 and, thus, is not part of federal adjusted gross income. Ohio's "starting point" for Ohio income tax is federal adjusted gross income. Nothing in the Ohio Revenue Code requires that the taxpayer, when... Read more →


Free File for rebate-only filers

I shouldn't have been in such a hurry to get my mom's tax return done so she could get her rebate money. If I'd waited just a bit, I could have e-filed it for her for free. The IRS has announced a new Free File option for individuals who normally do not file a tax return, but who are doing so this year to claim their piece of the stimulus package rebate pie. This essentially is lower-income workers who don't have to file a return because they make less than the filing trigger amount and folks who rely solely on... Read more →