And the lovely tax break tunes continue. Today's entry from our 12 Tax Tips of Christmas focuses on your residence. Making some home-related payments now can help cut your tax bill when you file next year. Homeowners know just how valuable their monthly loan payments are at tax time. For those of us early in our mortgage paying life, most of that check goes each month to cover interest. And that interest is deductible when you itemize expenses on Schedule A. If you have a second home, the interest on that property's mortgage loan also is deductible as long as... Read more →
December 2009
Bye-bye Bo-Tax. Hello, Tan Tax
Sunday, December 20, 2009
In its effort to fund health care reform the Senate has shifted gears when it comes to personal vanity projects. As you recall, Senators first proposed a tax on plastic surgery to be collected by doctors. This 5 percent charge was proposed for purely elective cosmetic procedures like Botox injections, rather than for those deemed medically necessary. From the viewpoint of a writer who loves puns, the best thing about the proposal was the ability to label the levy the Bo-Tax. But the Bo-Tax has been swapped in the latest Senate health care bill for the Tan Tax. On Saturday... Read more →
The days and holidays are ticking away, but there's still time for some tax tune-up. In today's sing-along of The 12 Tax Tips of Christmas we look at deferring income. The amount of tax you owe depends on your taxable income. For tax calculation purposes, there are many ways to get that base lower. Deductions, either standard, itemized or those adjustments at the end or the first page of both the 1040 and 1040A known as above-the-line deductions, are the most common way to cut taxable income. But you can simply make less money. No, I'm not joking. But neither... Read more →
Finished your holiday shopping yet? That's OK. Some of the best gifts and the most fun searching for them comes from the last-minute excitement. But you shouldn't handle your finances that way. To help you get your money management, if not your money itself, in better order, we wrap up our 2009 Year-end Money Moves series with a look at details. Taking care of these fiscal housekeeping tasks now and updating them at least annually will help you stay on top of your money. And knowing what you have will help you maximize it. Get organized This year I converted... Read more →
If you have to pay the alternative minimum tax, or AMT, you'll be singing the blues instead of the joyous tunes of the holiday season. In today's sixth verse of The 12 Tax Tips of Christmas, we look at just what this dreaded and costly parallel tax is and how you can find out if you might face it. The AMT is a separately figured tax that eliminates many deductions and credits that filers can claim when computing their regular tax bills. By losing these breaks, they see their tax bill go up under the AMT. So who has to... Read more →
The Year-end Moves series is back after detouring yesterday so I could personally say goodbye to all my fantastic Taxpayer Advocacy Panel colleagues. I also took a blog side trip to say goodbye to the estate tax which, because of Senate inaction, will disappear on Jan.1, 2010. But it will(? should? might?) be back in early January. I'll let you know as soon as whatever happens. Today, though, we are back, taking a look at some giving moves you should consider by Dec. 31. This time of year, many of us are in the gifting mode. In addition to our... Read more →
I know I shouldn't be surprised. After almost three decades of serious Capitol Hill watching, including views from inside several House and Senate office buildings, I've witnessed a lot of curious inept jaw-droppingly stupid dubious Congressional actions. But the Senate's decision yesterday to let the estate tax expire is right up there with the most "what the ..." moves I have seen. Yep, although almost all lawmakers agree it would be better for most taxpayers (not to mention the federal treasury) to keep the estate tax on the books rather than let it expire on Jan. 1, 2010, the Senate... Read more →
Practice makes perfect, for singers as well as taxpayers. That's why today's 12 Tax Tips of Christmas recommendation is for you do a mock tax return. I know. The thought of filling out a bunch of tax forms just for practice makes you want to run away screaming. But better to do that now -- both the form completion and the screaming -- than in April when it really counts. You can get an idea of what your 2009 tax will be by inputting as much info as you can. Use your latest paycheck stub for income and withholding data.... Read more →
The theme of the Christmas carol that inspired The 12 Tax Tips of Christmas is perfect for today's topic. In the season of giving we're looking at giving to nonprofits. In addition to just making you feel good for helping out, charitable donations can provide tax benefits for folks who itemize. Claiming these gifts on Schedule A can help you cut down on your taxable income. Less income generally means a smaller tax bill. You can give cash, which to the IRS also means charged donations. As long as you make the credit card gift by Dec. 31, even if... Read more →
I don't know about you, but I very much look forward to the day I don't have to worry about writing to earn money and can just scribble away about whatever I want. Yeah, that probably will still be taxes, but you know what I mean. To be able to do that as soon as possible will take making smart retirement savings moves. So to benefit you and me, today's 2009 Year-end Money Moves feature focuses on ways to enhance our retirement earnings. Contribute to your company plan In these tough financial times, many folks have stopped contributing to their... Read more →
Federal workers owe IRS $3 billion
Tuesday, December 15, 2009
As Uncle Sam looks to refill his coffers, he need look no further than his office buildings. Just released data shows that in 2008 almost 300,000 federal employees and retirees failed to pay more than $3 billion in income taxes. The tax delinquent employees come from nearly every federal agency with more than 25 employees, according to IRS documents. The IRS is the only federal agency where employees can be fired for not paying their taxes. The non-compliance rate for IRS employees in 2008 was 0.76 percent. The good news is that the IRS delinquency rate is down from 0.89... Read more →
Fa-la-la-la-laaaaaa! OK, that's a different song, but here at the ol' blog we're still singing about paying fewer taxes. So cue the third verse of The 12 Tax Tips of Christmas: Spend your FSA. An FSA, or flexible spending account, is a great workplace benefit. With these accounts, you put money in via automatic deposits from your paycheck. Even better, the money is taken out before payroll taxes are figured on your income, providing you a bit of tax break. There are two types of FSAs, one for child care and the other for medical expenses. The cost of child... Read more →
Our Year-end Money Moves series, circa 2009, continues today with a look at some investment-related actions that you might want to consider by Dec. 31. As mentioned when we started this series, several of the investment moves also have tax considerations. Cash out now? In many cases, investment income is treated more favorably by the tax man. For most investors, long-term capital gains (profits made on the sale of assets held for more than a year) and qualifying dividends are taxed at 15 percent, versus the potential top tax rate of 35 percent levied on wage income. For filers in... Read more →
Welcome to Don't Mess With Taxes' third annual Year-end Money Moves series. As December's days dwindle, we'll let you know what you still can do to save on your taxes or make money a little extra cash before the year ends. We start off with, of course, tax tasks you need to tend to by Dec. 31. The rest of the week, we examine investment, retirement and charitable giving moves, then finish 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... Read more →
We still have a Christmas tax song in our heart. It's on to the second verse of The 12 Tax Tips of Christmas. #2 Improve your home: It's getting cold out there. And if your doors and windows are drafty, it's getting cold in your house, too. You can plug those household gaps with some help from Uncle Sam. Back in 2005, a comprehensive energy bill was enacted that contained provisions that offered some tax breaks for folks who made energy efficient improvements to their homes. But for the most part, the benefits were not very much and the rules... Read more →
The Taxpayer Advocacy Panel will continue to grow and do good work on behalf of taxpayers because we have members like Justin Axelrod. Who did I see when I walked into the lobby of the D.C. hotel where TAP is holding its annual meeting but Justin. Of course he's here early for the meeting. He's totally committed to TAP. Justin just completed his legal studies at the University of Florida Levin College of Law, all the while promoting TAP every chance he got (or made). You can be sure he'll still be doing as much as he can while he... Read more →
Holidays and taxes are the perfect package, right? OK, maybe not. But with all the seasonal festivities to distract us, it's easy to put off making some tax moves that could help cut your 2009 IRS bill or reduce your 2010 tax liability. Well, Don't Mess With Taxes wants to help. No, we can't suggest the perfect gift for your mother-in-law or the right outfits for all your holiday parties. But we can provide you a daily tax tip, starting today and running through Christmas Eve. Let's get to it! #1: Sell assets: Watching an investment tank is no fun,... Read more →
Preview of upcoming tax blog features
Sunday, December 13, 2009
Later this morning I'm heading to Washington, D.C., for the annual meeting of the Taxpayer Advocacy Panel (TAP). It's always great to head back to the nation's capital and see old friends, both those on TAP as well as the folks the hubby and I knew when we lived in the D.C. area. The one downside of the trip is that the TAP organizers really crack the whip and keep our noses to the IRS improvement grindstone! Meetings start way earlier than I'm used to getting up and after we wrap up in the evenings, we have dinners. I can... Read more →
Actually, it's happy belated birthday. Things were so crazy last month, between preparations for the coming tax-filing season and our ongoing home repairs, that I totally forgot the ol' blog's fourth birthday. The big day officially rolled around on Nov. 14. But on that Saturday about a month ago, I was busy blogging about the tax troubles of an old movie star (sorry Zsa Zsa, but it's true, both on the age and tax fronts) and a former political pundit. I usually follow the adage that age is only important if you're cheese or wine. But Don't Mess With Taxes... Read more →
In my preview of the tax extenders bill last week, I noted that the provision that gives special tax relief to motorsports complex owners could cause some problems with passage of the bill. As it turned out, it wasn't enough to derail the package that continues expiring tax breaks beyond Dec. 31. The measure, including the so-called NASCAR tax break, passed 241 to 181. Under the law, facility owners can use a quicker seven-year depreciation schedule for new construction and improvements to racetracks, grandstands, parking lots and other facilities. That's certainly a nice early Christmas present for the race track... Read more →