Don't Mess With Taxes

Many years ago, I was a two pack a day smoker. I was young. I was stupid. But at least I was cost conscious. I always bought my smokes in cartons because they were a better value that way. I gave up the habit more than 20 years ago as a gift to the hubby. Despite a few extra pounds, it's turned out to be a good gift to myself, too. Not only am I healthier, except for those aforementioned few pounds, but I've saved a ton of money over the years. If you're still smoking, you might want to... Read more →

Taxes aren't usually a laughing matter, but that didn't stop cartoonist Danny Shanahan from having a go at getting a tax-time chuckle. His IRS-themed drawing is featured today at the New Yorker's online animated cartoons site. If you have problems with this direct link, try the main page and click on the March 30 cartoon. Once the video starts (it takes a few seconds for the player to load), previous toons will play after the tax one ends. Enjoy! Hat tip to Dan Ray at CreditCards.com Read more →

I feel like one of those late-night cable TV pitchmen screaming, "But wait! There's more!" This morning I shipped off an autographed copy of my book, The Truth About Paying Fewer Taxes, to Byrne in Brooklyn. He was the lucky winner of the latest giveaway here on the ol' blog. But, as I said, there's more to come. Two more ways to win: Yes, filing procrastinators, sometimes good things do come to those who wait. I have an item to help you complete your taxes and another to assist you in organizing the paper that you used to file. First,... Read more →

What are you worried about this tax filing season? If you're like the folks who participated in a recent CCH CompleteTax survey, you're concerned that you might be making costly mistakes or overlooking tax-saving breaks. Such worries could be well-founded. The poll of around 1,000 adults, commissioned by CCH and conducted by GfK Roper, also found that most people do not know which tax breaks offer the greatest benefits. Nearly two in three, or 66 percent, of taxpayers fear they may overlook tax breaks or make mistakes that could cost them in fines or penalties. When it comes to a... Read more →

When I was in college, and even just after I took my journalism degree to a full-time job at the local newspaper, I didn't think much about money. I made it through college without any debt. Some scholarships, a handful of grants each semester, saving my summer earnings for upcoming school costs and, of course, parental funds enabled me to get through four years financially unscathed. Not that I ever had much leftover cash. I recall occasionally drawing my bank account down to literally a few pennies. You must remember, this was the "olden days," when banks, at least the... Read more →

NOTE: This post was updated Aug. 9, 2017. In tough economic times, a lot of folks look for ways to supplement their incomes. One of the most popular options is to put your hobby skills to work. If you have a hobby that lends itself to making money, go for it. But don't forget the tax implications. Any money you make off your hobby must be reported as income. The amount of, in IRS' words, "income from an activity not engaged in for profit" goes on line 21 of Form 1040. You might, however, be able to reduce that taxable... Read more →

Remember back in 2005 when Dubya created a blue-ribbon panel to come up with ideas on how to overhaul the Internal Revenue Code? Remember how that group, the President’s Advisory Panel on Federal Tax Reform, did indeed offer some creative proposals, such as doing away with the mortgage interest deduction? Remember how quickly the panel's work got pushed to the very back burner? Now Obama says he wants to give the tax panel concept a go. Timing is everything: While it might seem that the new president is overloading his policy plate a bit, he is facing a deadline created... Read more →

Wesley Snipes says he needs to leave the country again, this time to work on movies in Africa and Europe. Federal prosecutors, however, say that the last time the court let Snipes use his passport, the actor used it to head to a major party instead of a movie set. "Defendant Snipes abused the Court's trust, and did so in a very public way. For that reason alone, the Court should deny his current request for international travel," Assistant U.S. Attorney Robert E. O'Neill wrote in his motion filed with the U.S. District Court in Ocala, Florida. In addition, O'Neill... Read more →

Since I'm on a truth-telling jag today, I want to let you know about your chance to tell the IRS the truth. I'm not talking about putting complete and honest info on your Form 1040, although that's always the best move. Rather, the National Taxpayer Advocate, Nina Olson, is holding a Town Hall meeting in Oklahoma City tomorrow night to get the truth from taxpayers about how the IRS can do a better job. If you're in the area, please drop in and tell Nina -- and me, since I'm heading up there to be part of the fun, too!... Read more →

I recently discovered a new financial Web site, FiLife. Well, it's not new; it's been around for a couple of years. But it's new to me. And I didn't exactly discover it. One of FiLife's writers, Kristen Sullivan, got in touch with me. Regardless of how we connected, I'm pleased to say we had a very nice conversation last week and there's online proof of our talk: Q&A with Tax Expert S. Kay Bell. As the FiLife site says, here's the short story: S. Kay Bell, author of The Truth About Paying Fewer Taxes offers some advice for first-time tax... Read more →

Put away your torches and pitchforks. Your outrage, along with a proposed but not likely to be enacted 90 percent tax on AIG bonus payments, has done its job. It seem that the threat by Representatives to take back via taxes most of the AIG bonuses paid in federal bailout dollars was enough to get most of the insurance company's recipients to give the money back. That and New York Attorney General Andrew Cuomo's promise to name names of those who keep the money. I was as mad as anyone at AIG and its hubris and Capitol Hill and its... Read more →

That's the assessment of the Transactional Record Access Clearinghouse (TRAC). Using IRS data, the Syracuse, N.Y.-based group calculated a drop of at least 19 percent in the audit rate of people with incomes of $1 million or more between 2008 and 2007. The IRS says TRAC is wrong. It's not the numbers that the IRS has an issue with; they are, after all, from the agency itself. But the IRS says that TRAC misinterpreted them. Let's go to the "he said/she said." TRAC's tracking: In the face of growing federal deficits and public calls to lower the tax gap (the... Read more →

With all the hubbub surrounding the crashing economy and stimulus payments, not to mention end-of-year tasks (tax and otherwise) and new year's resolutions (tax and otherwise), this slipped right past me. Ford hit the magic 60,000 hybrid sales mark in the fourth quarter of 2008. Actually, it went over it. By the end of last year, the auto manufacturer had sold 66,157 hybrid vehicles. You know what that means. The tax break for hybrids will start to phase out. Soon. Like in a week and a half. Ford phaseout time line: Under the law that created the tax break back... Read more →

Limiting Free File participation on the basis of income is fine. So says a U.S. District Court judge, who last week dismissed a class action lawsuit that was filed in 2007 against the Free File Alliance. That's the group of tax software vendors who provide free software and electronic filing to low-income taxpayers via a special IRS Web page. Also named in the lawsuit were Intuit (TurboTax's manufacturer), H&R Block Digital Tax Solutions (maker of TaxCut) and the Internal Revenue Service. Stacie Byers and Deborah Seltzer initiated the class action suit on the grounds that Free File was artificially restricted... Read more →

Not to get your Friday off on an irritable start, but did you know that more than $221 million in taxes is overdue from 13 of the 23 largest recipients of Troubled Asset Relief Program (TARP) funds? That's the word from the House Ways and Means Subcommittee on Oversight, which held a hearing yesterday on the state of federal borrowing and the use of taxpayer money. The timing was perfect, given that the same day the full House approved a "clawback" measure to recoup most of the bailout money used by AIG as employee bonuses. The revelations from Lewis' subcommittee... Read more →

OK, I totally underestimated the appeal of using the tax code to recoup AIG bonus payments. Sorry, Charlie, for doubting you. Charlie is, of course, Charles Rangel, chairman of the House Ways and Means Commitee and chief sponsor of H.R. 1586, a bill that would tax up to 90 percent of bonus money paid to certain AIG employees. By a vote of 328-to-93, the measure passed the House. The Senate Finance Committee leaders are working on their own AIG bonus bill. It must pass that chamber and then the two pieces of legislation will have to be reconciled. It will... Read more →

Two days ago, the head of the House tax-writing committee spoke out against the idea of a specific tax on recipients of AIG bonuses. The tax code is "not a political weapon," said Rep. Charles Rangel (D-N.Y.). Today, Rangel has loaded his tax gun. He and his House colleagues are debating a bill, H.R. 1586, sponsored by the Ways and Means chairman which would take 90 percent of the AIG bonuses back in federal taxes. It would apply to bonuses paid since Jan. 1 by the federally rescued insurance giant or any other company accepting more than $5 billion in... Read more →

I know it's just what you want to do, spend your Saturday with folks from the Internal Revenue Service. But this time, it might actually be to your advantage. The IRS will open more than 250 Taxpayer Assistance Centers on March 21 to help eligible taxpayers prepare their taxes or get other IRS help. The IRS is hoping this will make things easier for taxpayers, since the Centers are not normally open on weekends. In addition, community groups that partner with the IRS are planning to staff around 1,000 sites during that same time Saturday. Two of the more popular... Read more →

I know that blogs are supposed to be more personal, but I really don't feel all that comfortable talking about myself. True, I've parceled out bits and pieces of information about myself periodically here on the ol' blog. I've always figured that's plenty. But then Brian Roger of MyVenturePad, the online business community, dropped me a note. When Brian asked if I wanted to help the site kick off its Blogger of the Week feature, how could I say no? So I offered some scoop about myself and Brian pulled it together into a very nice piece. If you're interested,... Read more →

Time for a break from AIG anger. Let's all direct a bit of our outrage at investment firm exec Robert Allen Stanford. You remember my fellow Texan. He's the guy who allegedly committed, as the Securities and Exchange Commission put it, "massive, ongoing fraud" in the form of an investment scheme that centered an $8 billion certificate of deposit program. Back in February, the SEC charged the man from Mexia and three of his companies -- the Antiguan-based Stanford International Bank, the Houston-based broker-dealer and investment adviser Stanford Group Company, and investment adviser Stanford Capital Management -- with orchestrating the... Read more →