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December 2008

The IRS does have heart! Yesterday, the agency announced that it is instituting an expedited process to help remove tax liens from the homes of financially struggling owners. We're all too aware of the troubles faced by folks who are about to lose their homes. Some laws have been enacted to help these folks out. However, it's also no big secret that when people run into money trouble in their daily lives, they're also likely to run into tax trouble, too. These strapped homeowners face a double burden. They're about to lose their home and the primary creditor is the... Read more →

Will RMD change hurt charities?

Although I'm nowhere near 70½ years old, the required minimum distribution issue has been on my mind of late. Maybe it's because I do have relatives who are older and worrying about their investments. They already had that "never enough money" mindset, and the recent stock market downturn has freaked them out pretty good. So I'm glad for them that, in 2009 at least, they won't have to pull money out of their traditional IRAs or tax-deferred company pension accounts. The 2008 RMD is another matter, as blogged about here. But I'm also a bit concerned about how the RMD... Read more →

Yesterday the thermometers here in Central Texas climbed to almost 80 degrees. All around our neighborhood, grills were fired up and fine Texas beef was served for dinner. Today, as you can see from the Weather Channel map below, it's been at or below freezing since mid-morning, with a splash of wintry precipitation thrown in for good measure. My WeatherBug icon has been chirping all day with one alert or update after another. Tomorrow? The weather men and women (and online services) predict we'll hit the mid-40s, which will seem like springtime. By Thursday and Friday, we should be in... Read more →

Eastwood film benefits from tax breaks

Clint Eastwood is the latest recipient of generous tax breaks to make a movie. In a feature today on the Academy Award winning director, the New York Times notes that: [T]he setting of "Gran Torino" was shifted from Minneapolis to Detroit, the original home of Ford and, not coincidentally, the home of 42 percent tax credits for films made there. (That helped make it easy for Warner Brothers to sign off on bankrolling the movie, something that hasn’t always been a given in the studio’s relationship with the director.) Not only does Clint have a good fiscal grasp of movie... Read more →

As real estate values drop nationwide, the number of homeowners appealing their assessments has increased. The number of appeals for the 2007 tax year went up anywhere from 10 percent in Collier County, Fla., to almost 90 percent in Clark County, Nev., according to the Associated Press. The median sales price in Chicago was down nearly 10 percent in October from a year ago, reports the AP, and property value challenges have more than doubled in Cook County, Ill., from about 127,000 in 2005 to about 277,000 last year. ''They're willing to pay their fair share, but they don't want... Read more →

Required retirement withdrawals waived … in 2009

Remember in yesterday's post on year-end retirement moves, I mentioned (look for the "breaking news" icon) that Congress was looking to provide some relief with regard to required minimum distributions? They did. Now the measure is awaiting Dubya's signature. Here's the deal. If you have a traditional IRA or 401(k), when you turn 70½ you usually have to start taking out some of that money. It's been growing tax-deferred for long enough, or so says the tax code, so you have to pull out some money and pay taxes, at regular rates, on the withdrawals. These are known as required... Read more →

Today, our Year-end Money Moves feature focuses on things you should do now to enhance your retirement earnings. This is Part 3 of our series. Part 1 covered tax tasks; Part 2 looked at imminent actions in connection with your investments. As noted in those earlier posts, there is tax crossover in all these categories. And now, since every passing moment moves us closer to our eventual retirements, let's look at some moves you can make by this Dec. 31st to help make your future retirement years truly golden. Contribute to your company plan The current economy has prompted many... Read more →

Washington, D.C., is at it again. First it was the U.S. Treasury with its changes in regulations to allow banks to benefit from net operating losses. Now Congress is getting in on the bailout special tax break act. According to the New York Times, "A little-noticed provision in the proposed bailout plan for Detroit's automakers blesses an aggressive tax shelter sold by large banks and insurers to municipal transit agencies across the country." The provision asks the government to help the agencies by guaranteeing the economics of the complex shelter known as Silo for sale-in, lease-out. Unlike the tax code... Read more →

Remember about a week ago when I promised you Don't Mess With Taxes' second annual Year-end Money Moves series and kicked it off with tax moves to make by Dec. 31? I haven't forgotten! It's just that some other interesting timely blog items popped up. Then, just as I planned to start the series, I was in the Washington, D.C., area at the annual Taxpayer Advocacy Panel meeting and it pretty well sucked up all my time. And once I got home, I was trying to catch up and get into the holiday swing of things on a personal level.... Read more →

This afternoon, Senate Majority Leader Harry Reid (D-Nev.) said that legislative body will probably act first on a $15 billion auto industry bailout package. His Republican counterpart, however, immediately raised concerns about the in-the-works proposal. According CQ Politics, Senate Minority Leader Mitch McConnell (R-Ky.) criticized key parts of a draft bill that was circulated Monday, underlining the trouble supporters may have overcoming opposition in the upper chamber from GOP members. The latest word is that Congress may be in for a weekend session to hammer out a final loan package to help the Big Three U.S. car makers survive. NASCAR... Read more →

This holiday season has gotten off to a particularly rushed start. I was in the D.C. area last week at the annual Taxpayer Advocacy Panel meeting (and still have some stuff from there I plan to share). Meanwhile, I was working on my annual tax season gig with (click here to read the year-end tax moves story that I finalized while at TAP). And then today all sorts of work (and a little personal) stuff bogged me down. But, just like Christmas, the annual kickoff of our intensified Tax Carnival schedule will not be denied! Yes, it's time to... Read more →

Organizations join effort to halt special
bailout bank loss tax rule

A letter is circulating as part of an effort to get Congress to halt and reverse the now infamous bank loss rule. As you probably recall since I've blogged about it quite a bit, the tax code was changed as part of emergency stimulus, aka bailout, efforts. Now some banks that buy floundering financial institutions can simply ignore the tax law that prevents them from using the losses of the acquired banks to help reduce their, the buying banks', tax bills. Several members of the House and Senate tax-writing committees have introduced legislation to stop this special tax break (blogged... Read more →

The eyes of not just Texas, but all of the United States, lately have been on domestic auto manufacturers. Will the Big Three American car companies get a bailout? How much? Will their executives really take a pay cut? What about union-negotiated employee contracts? If a bailout happens, when will that be? Those questions might be answered in the next week or so, or any resolution might have to wait until next year. President-elect Barack Obama today reiterated his support for auto industry assistance, within limits. "I think Congress is doing exactly the right thing by asking for a conditions-based... Read more →

Calm down, livestock owners. Uncle Sam isn't looking to tax your flatulent livestock. In recent days there has been much attention given to what some saw as a possible new fee connected to gaseous farm animals. The bloated story began on July 30, when the Environmental Protection Agency submitted an advanced notice of proposed rulemaking, or ANPR, to the Federal Register in response to a 2007 Supreme Court ruling that called for tighter restrictions on greenhouse gases and other pollutants. Cows were mentioned as part of those other pollutants. The Supreme Court decided in Massachusetts v. EPA that greenhouse gas... Read more →

A couple of weeks ago, Texas Congressman Lloyd Doggett introduced legislation to roll back some of the tax breaks given banks in connection with financial bailout activities. However, given that there realistically is no way the measure will make it into law with so few days remaining in the 110th Congress, Doggett and several of his colleagues have decided to appeal directly to Treasury Secretary Henry Paulson. Bill would limit tax advantage of losses: Specifically, the Lone Star lawmaker is concerned about IRS Notice 2008-83, which was ordered by Paulson and which changed application of Internal Revenue Code Section 382... Read more →

The latest reality television show is the British import "Secret Millionaire." Each week, or as long as ratings allow, donors worth millions of dollars will go undercover into one of the most impoverished areas of the country. They spend one week canvassing the town, meeting as many people as possible and learning the residents' stories and dreams. Then the millionaire reveal their real identities and motives and hand over a check. On Wednesday's Fox-TV premier, Todd and Gwen Graves of Baton Rouge, La., visited folks still struggling to recover from Hurricane Katrina. By the end of the program, they had... Read more →

More than 1 million people are expected to flock to Washington, D.C., on Jan. 20, 2009, to see Barack Obama's historic inauguration as our 44th president. And Washington, D.C., officials want to make sure that those Obamaniacs get to party as hearty and long as they want. Emergency legislation approved by the D.C. Council on Tuesday will allow any District establishment with a liquor license, including restaurants and nightclubs, to serve alcohol until 5 a.m. That's three hours after the usual closing time. In addition, eateries in the national capital can serve food round-the-clock from Jan. 17 until the morning... Read more →

Welcome to Don't Mess With Taxes' second annual Year-end Money Moves series. As December's days dwindle, we'll let you know what you still can do to save or make money in 2008. We start off with, of course, tax actions you need to tend to by Dec. 31. It will be followed by year-end moves in connection with your investments, retirement and charitable giving, We'll wrap things up with a look some financial housekeeping details. Some of the strategies cross boundaries. For example, selling assets that have lost value could help lower your tax bill; so does donating to your... Read more →

All those shell-shocked Wall Street guys aren't the only Big Apple residents taking major hits because of the financial crisis. The City of New York has been forced to refund more than $800 million to companies that overpaid their taxes this year. The excessive tax payments, reports the New York Times, were based on expectations of a more robust business performance. New York businesses each year estimate their tax liabilities based primarily on how well they did in prior years. The first half of 2007 was quite lucrative for many financial firms and other companies, says the Times, leading them... Read more →

I've been getting my December bills in order and this month is full of big ones. There is, of course, the mortgage, which usually leads the payment amount parade. Our car insurance is close behind the house payment this month. Yeah, I know, bad timing to have that bill come due at holiday time. But the major drain on our bank accounts every December is our annual property tax bill. In 2005, our first property tax bill for our suburban Austin home bill was horrifically high, especially compared to what we had paid in Florida. The hubby and I had... Read more →