Don't Mess With Taxes

UPDATE, March 6: Despite enactment of a budget, state tax refunds are still on hold. UPDATE: On Feb. 19, California lawmakers reached a budget agreement. So Golden State tax refunds should be processed shortly. Arnold wasn't kidding about California's fiscal problems. The Golden State's finances are deep in the red right now. In fact, things have gotten so bad that the state's controller says that if lawmakers don't come up with a way to cover California's $42 billion budget deficit, on Feb. 1 he will put a 30-day hold on tax refunds and some other payments. This action would affect... Read more →

A new NASCAR season is just around the corner and what a strange one it promises to be. If you thought Junior leaving his late daddy's team was as unexpected as it could get, think again. This year will begin without the storied Petty race team. OK, technically the remnants of Petty Enterprises will be there as part of Gillett-Evernham Racing, which absorbed what few Petty assets there were earlier this month. And the storied #43 will still be on the tracks.But it's all just in name and for show. The 60-year day-to-day involvement of the legendary Petty family is... Read more →

Do you sometimes think your accountant is a wee bit obsessive about everything tax? Well, how does he or she compare to Fred Miller? Miller, a Kalamazoo, MI, certified public accountant, was surprised when the clerk at the Portage, MI, Barnes & Noble rang up a 6 percent state sales tax on his purchase of Money magazine. The reason for his shock: The tax shouldn't have been levied. "I'm a CPA and it was absolutely news to me," Miller told the Kalamazoo Gazette. "I've bought it (the magazine) at some other places and I've not been charged sales tax." Michigan... Read more →

Have you been champing at the bit to get your tax return into Uncle Sam electronically? Well today is your lucky day. This morning the IRS began accepting e-filed returns. This includes 1040s that you do on your computer using tax software, as well as online tax preparation and filing options offered by various companies. And if your adjusted gross income last year was $56,000 or less, you also now can use Free File. This is the partnership between the IRS and tax software companies to help folks complete their taxes and e-file them at no cost. Once at the... Read more →

By all accounts, Ruth and Bernard Madoff were inseparable. Married nearly 50 years, they worked in the same office and ended most days dining together, just the two of them, at a favorite New York City restaurant. But in December, when Madoff admitted that his multibillion-dollar hedge fund was an elaborate Ponzi scheme, Ruth reportedly was as shocked as the rest of the world. "One day, she was married to a stock-market genius, the next she was married to one of history’s great con men," write David Segal and Alison Leigh Cowan in today's New York Times. Could the long-time... Read more →

What is it about folks in high government places? So many of them just can't seem to keep their taxes in order. The latest instance is Timothy Geithner, President-elect Barack Obama's choice to run the Treasury Department. And the tax troubles have delayed Geithner's confirmation hearing until next week, meaning that when Obama finally gets into the Oval Office, he won't have his man at point to deal with the economic crisis. Geithner failed to pay $34,000 in taxes from 2001 to 2004. According to documentation released by the Senate Finance Committee, which is considering Geithner's nomination, his tax troubles... Read more →

"No period of my life has been one of such unmixed happiness as the four years which have been spent within college walls." -- Horatio Alger Today is the birthday of Horatio Alger, a 19th century author of novels for young people in which he chronicled the travails and ultimate successes of characters who rose from impoverished circumstances to lead happy and successful lives. The core of every Alger story was how down-and-out boys could achieve the American Dream of wealth and success through hard work, courage, determination and concern for others. While kids today tend to equate the American... Read more →

The IRS train heading out to help Jim and Jane Taxpayer is getting quite crowded. The latest to board is National Taxpayer Advocate Nina Olson. Actually, Olson is the conductor. As the National Taxpayer Advocate, she's the person in charge of holding the IRS accountable for doing its job effectively and while also keeping the customers -- that's you and me -- in mind. And she does a fine job of that in her latest Annual Report to Congress, where she called on the IRS and Capitol Hill to help taxpayers who are in financial trouble. With the recession expected... Read more →

You knew this had to happen. Purveyors of adult entertainment say it's time that they got the same government help as financial firms and the auto industry. Yep, Hustler's Larry Flynt and Girls Gone Wild's Joe Francis say it's time for a bailout of the porn industry. Flynt and Francis say the economy has hurt their businesses, too, with sales of XXX DVDs down 22 percent. They want $5 billion in federal funds to help them make it until things pick up. TMZ has Francis' rationale behind the request. "The government has changed its economic policy and now is just... Read more →

Yesterday's post on the impending estimated tax deadline prompted some readers to ask a follow-up question: Exactly how do you figure out what to pay the IRS via 1040-ES payment vouchers? Regardless of how straightforward or convoluted your earnings situation is, the process is essentially the same. First, you come up with a good estimate, which for many of us is a good guess, of what you expect your annual total income to be. Next, make a down-and-dirty calculation of the taxes owed on that expected income. Then you figure what you'll be paying via withholding. Your withholding amounts can... Read more →

Thank goodness for the Tax Calendar there in the right-hand column of the ol' blog or this tax task might have caught me by surprise next week. The fourth quarter estimated tax payment of 2008 is due Jan. 15. Here's the 1040-ES package for 2008 in case you can't find your material or you received untaxed 2008 income for the first time last quarter. Like your regular 1040, if you're sending it snail mail and your filing is postmarked by Jan. 15, then it's considered, in IRS speak, "timely filed." And make sure you send it to the correct Internal... Read more →

Few of us spend our money wisely all the time. Uncle Sam is no exception. OK. So even those who rail against big government have to be happy about the possibilities for operational improvement that come with the creation of the new Performance Officer position. And Nancy Killefer, whom President-elect Obama named to this job, brings with her a skills set honed at the IRS. OK. I know what you're saying. Performance, efficiency and effective administration are not words that usually come to mind the minute you hear Internal Revenue Service. But as someone who's been watching the IRS for... Read more →

Yesterday's post about the IRS move toward compassionate tax collection has gotten a lot of people thinking. Actually, it's gotten them rolling their eyes. It seems that more folks believe in the Tin Man getting a heart than they do the federal tax collector. Point taken. Even when Capitol Hill mandated back in the late '80s a "kinder, gentler" IRS that focused on the "Service" part of its name, the attempt at image polishing just didn't take. Then in recent years, Congress did an about face and started nagging the IRS to help close the tax gap. So the agency... Read more →

There really may be a silver lining -- OK, silver-plated -- to our horrid economic situation. It's helped the IRS find a heart. At a telephone press conference yesterday, IRS Commissioner Doug Shulman announced that his agency is committed to working with cash-strapped folks so that they can meet their federal tax obligations while just trying to survive in this crazy economy. This latest IRS announcement comes just a few weeks after the IRS announced an expedited process to help remove tax liens from the homes of financially struggling owners. Yep. You heard right. The IRS does feel your pain... Read more →

2008 tax-related reviews are still coming into my e-mail box. A particularly fun one is AccountingWeb.com's look at last year's famous tax cheats. They are: Wesley Snipes Joe Francis Nicolas Cage Helio Castroneves Paul Hogan Raffaello Follieri Melissa Etheridge Add these folks to the ones nominated by Tax Updates for the title of 2009's Taxpayer of Year, and you've indeed got a motley crew of convicted and alleged tax miscreants. Time will tell who will show up on such lists for 2009. Read more →

2009 is the tax season for you if you want to e-file for free. Not only are commercial tax software manufacturers making free filing part of their tax season packages, the IRS is expanding its Free File program. When that government-sanctioned electronic filing option kicks off its 2009 season on Friday, Jan. 16, it will have a new and interesting component: Free File fillable forms. Say that three times fast! The program is more than just an alliteration lover's dream. It's a way that anyone, not just Free File eligible taxpayers, can e-file at no cost. And it's an option... Read more →

Joe Kristan, who writes the Tax Updates for Roth & Company, has a neat annual tradition. He names a Taxpayer of the Year. This year, though, he's letting readers have a hand in the selection. As you might suspect, these aren't folks who are just going about their business and getting their 1040s and assorted schedules into the IRS every April. Rather, the 2008 "distinguished" nominees in Joe's self-described arbitrary slate include, in part, a politician (what a surprise!), an athlete (we're shocked!) and a certified whack job who wanted to commission a tax-related whack job. Check out Joe's full... Read more →

Monopoly money is OK with these uber-rich folks. They're all make believe. Just in case last year's stock market troubles didn't leave us feeling poor enough, Forbes magazine compiled a list of 15 fictional characters who also are much wealthier than we. They are: 1. Uncle Sam 2. Scrooge McDuck 3. Richie Rich 4. Gordon Gekko 5. Jabba The Hutt 6. Ebeneezer Scrooge 7. Tony Stark 8. Thurston Howell III 9. Bruce Wayne 10. Adrian Veidt 11. Jed Clampett 12. Artemis Fowl II 13. C. Montgomery Burns 14. Lara Croft 15. Mr. Monopoly Personally, I question ranking Uncle Sam at... Read more →

Louis Braille was born 200 years ago today. The man whose name is known worldwide as the universal communications standard for blind persons was born on Jan, 4, 1809, with normal vision. But an accident at age 3 led to Braille's total blindness. By age 15, Braille had revised an earlier raised-dot design into the system that is used today. Tax considerations for blind filers: When it comes to taxes, visual impairment is taken into account. Blind individuals who are dependents of other taxpayers have a larger earnings threshold before they must file a return. Visually impaired taxpayers also are... Read more →

One of the advantages of being a night owl is you get to see program reruns, like the Anderson Cooper piece last night that looked at how some corporate fat cats are making off like bandits when it comes to their taxes. That's right, in addition to getting golden parachutes, these privileged former top execs don't even have to worry about paying the taxes on their multimillion dollar severance packages. Although provisions of the tax reform act of 1984 impose an additional 20 percent tax on multimillion dollar golden parachutes given executives who are fired in a merger or takeover,... Read more →