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February 2010

January 2010

This weekend we got a lot of tax statements. I guess that means it's time for me to at least think about filing our 1040 and see if I can attain what has been an elusive goal: getting it done well before April 15. I'm hopeful, but realistic. Life gets in the way. I make the most of my income during tax season, which means I don't have a lot of time to spend on reporting those earnings to Uncle Sam. And Congress sure doesn't help. Folks on Capitol Hill can't leave well enough, or too often when we're talking... Read more →

You may pay to have your suitcases loaded onto a plane, but airline bags fly tax-free. That's the word from the IRS. In a private letter ruling (that's a determination made at the request of a taxpayer, corporate or individual, on a particular situation), the Internal Revenue Service told the inquiring airline that "charges for transportation of baggage" aren't subject to excise taxes. That's a hefty chunk of change that's going to escape tax. A recent report found that the five largest airlines will collect $1.76 billion to check first and second bags, a $117 million increase over last year.... Read more →

Walmart is back in the tax business

Last year, the world's largest discount store partnered with United Way and the nonprofit One Economy Corporation to offer free filing services. For the 2010 filing season, Walmart, through its Foundation, is back in the temporary tax help business, bringing in 2010 a new partner, the National Disability Institute. Regardless of what you think about the Arkansas-based company, it's hard to scoff at tax time help, especially for folks who can't afford to pay a professional to decipher the tax code for them. Like last year's program, the filing assistance is available in a variety of ways. United Way Worldwide... Read more →

Music is a vital part of life here in Austin. I love how songs are playing just about everywhere you go, a lot of times live, but definitely from radios or sound systems. In fact, the last time I went for a hair cut, the beauty shop (yes, that's what we call salons here in Texas) radio was tuned to a hard rock station and I heard one of my favorite Queensryche compositions. So you can image the shock when I heard that hairdressers in Spain are fighting a radio tax assessed their shops. Really? A tax on some businesses... Read more →

Yeah, I know that headline looks like a flat-out attempt to get you to click. Worked! Seriously, or as seriously as you can get when talking about rich celebrities talking to each other on TV, there is a connection. Here are the dots. Jay is bearing his soul to Oprah on her television show, scheduled to air this afternoon. Is your DVR set? A preview from NPR's Monkey See blog says that Leno apparently doesn't provide any shocking new insight into the network's best reality soap opera. He's still standing by his "I'm a victim, too" position, pointing out to... Read more →

I see dead people's tax refunds

With apologies to all connected to The Sixth Sense (one of my favorite flicks, by the way), "I see dead people's tax refunds" apparently was the catch phrase of a California man who ran a temporarily successful scheme to claim false refunds. Haroon Amin of Upland, Calif., has pleaded guilty to conspiracy to defraud the United States by filing at least 250 tax returns of dead people. Amin and another Golden State resident, Ather Ali, were were accused in December 2008 of filing returns in 2002 and 2003 on which they falsely stated that the deceased individuals earned wages from... Read more →

What are you planning to do with your refund? Some folks are dividing the money they get from the IRS into multiple accounts, including emergency savings, retirement and even brokerage or mutual fund accounts. And they're doing so without even touching the cash they get back from Uncle Sam. Since the 2007 filing season, taxpayers have had the option of having a federal tx refund amount directly deposited into up to three accounts. But over the years, it's also highlighted a potentially costly problem for folks who use this ostensibly convenient way of divvying up their federal tax refund. If... Read more →

Welcome to the first Tax Twitter Tuesday of 2010! We're into the filing season, the economy is still giving us fits, we've been giving like crazy to Haiti's earthquake victims and, as usual, politics are playing a big part in tax legislation. What a way to get a year going! And all this means the Twitterverse is abuzz with tax talk. So let's get to it! @CPALetter_Daily Today's Top Story in #CPALD - Obama to propose aid to middle class, freeze on some federal spending @CLT_CPA North Carolina is now taxing digital property @freefrombroke RT @arohan 5 (plus... Read more →

Did you e-file your tax return on Jan. 15 when the IRS began accepting electronic submissions? Then you should have your refund money soon. That is why you were among the first wave of filers, isn't it?The IRS has issued its annual chart showing when filers can expect to get their tax money. If you e-filed between Jan. 15 and Jan. 21 and directed the IRS to direct deposit your refund, then the agency says it should be en route to your bank account on Jan. 29. If you opted to get a paper check, that will be mailed Feb.... Read more →

Yeah, right. Like that's going to happen any time soon. But that's how some folks think our tax system should work. They contend that it would save us taxpayers time and the IRS money if the tax agency just took the info it already gets about what we make and filled out our returns for us. In the New York Times piece Why Can't the I.R.S. Help Fill in the Blanks?, Randall Stross says: "In the digital age, filing income tax returns should be a snap. The important data from employers and financial institutions have already been sent to the... Read more →

Just to close the loop here on the ol' blog, the ability to time shift your donation to Haiti earthquake relief is official. Obama signed the bill into law on Friday. The new law also clarifies record keeping rules for those of you who donated via text message. Your telephone bill will be sufficient if it shows the name of the organization to which you donated, the contribution date and its amount. In addition, the IRS has designated the Haiti situation a qualified disaster for federal tax purposes. As I noted in my first post on donations to the devastated... Read more →

A new form for the tax undead

I've blogged about the new tax forms Schedule L (add-ons to the standard deduction) and Schedule M (to officially claim the Making Work Pay credit). I've even gone totally tax geeky and bemoaned the breakup of the long-time pair Schedules A and B. But even though many of us feel like we're in a horror movie during tax-filing season, Form Z-MBIE is a new one to me! tax lawyer Thanks to @taxdoctoralerts for the gory heads-up.Related posts: Breaking up Schedules A and B Schedule L, a new form for nonitemizers Schedule M, yet another new form Filling out your pet's... Read more →

If you're filing your taxes in January, it's probably because you're going to get a refund. But for folks who will be facing an IRS bill and likely filing and paying later, one credit card company is already touting its new tax payment option: reward points. American Express customers who have Membership Rewards accounts can use those points to pay federal, state and local taxes. The company says the arrangement is a first for the credit card industry. To make the option available, AmEx has partnered with Pay1040 and Official Payments Corp., the two firms that the IRS and most... Read more →

If you expect to get a refund, then your initial answer to my query about your readiness to file your taxes will be an immediate and emphatic "Duh!" But my question is really about the filing process itself. Even if you use tax software and e-file, whether via your own computer or via Free File, you need to do some pre-filing preparation The same is also true if you take your tax material to a professional for filing. So here are some things to think about before you sit down at your PC or Mac or head out to your... Read more →

Congress OKs accelerated tax deductions for donations to Haiti

It's a done deal. The Senate today followed House action and unanimously approved legislation that will let taxpayers claim donations to Haiti on their 2009 tax returns. The bill now goes to the prez, who's expected to sign it shortly. Without the bill, donors would have to wait until next year to claim the charitable gifts on their 2010 taxes. But now, donations made between Jan. 12, the day the earthquake devastated Haiti, and Feb. 28 can count on this year's filings. Of course, make sure you choose the tax year that gives you the biggest benefit. If it works... Read more →

The Kansas Department of Revenue has thrown away the carrot. This tax filing season it's turning totally to the big stick of delayed refunds to get Sunflower State residents to file electronically. It's not that Kansas tax collectors are simply stacking taxpayer's paper returns in a corner for four months. Budget cuts, tax officials say, are the problem. To save money, the revenue department is not hiring temporary employees to deal with snail mailed returns. Usually 65 or so seasonal workers take care of this. But now, existing full-time employees are just going to have deal with them when they... Read more →

IRS can freeze 'Girls Gone Wild' money

Joe Francis, founder of the soft-porn Girls Gone Wild video empire, has lost a round in his effort to regain control of $22 million the IRS seized. Last month, Francis filed suit in federal court in Los Angeles against the federal tax collector contending that the agency improperly issued a jeopardy assessment against him. The action effectively freezes Francis out of access to the millions held in two brokerage accounts linked to the video entrepreneur. Jeopardy assessments, which essentially amount to immediate seizures, are typically used when the IRS believes such action is the only way to preserve assets to... Read more →

Red Cross receipts for text donations

I'm in a charitable blogging mood today, in every sense of word, so here's another look at the outpouring of donations to help the folks in Haiti. Soon after the earthquake struck last Tuesday, social media became not only a way for the world to find out about the tragedy, but also a mechanism to lend assistance. Facebook launched a portal, the Global Disaster Relief page, for people who want to help. And Twitter was integral in spreading the word about donating relief funds via text message. Yes, the staid old American Red Cross, which has been lending hands and... Read more →

Special tax breaks proposed for Haitian earthquake relief donations

As relief workers scramble to bring aid to the victims of last week's devastating earthquake in Haiti, U.S. lawmakers are working out details of a tax break for those who've donated (or plan to donate) to the cause. Under a bipartisan House bill, if you contributed money to nonprofits providing relief to the stricken island nation, you would be able to deduct those donations on your 2009 tax return. This would allow you the tax benefit of the gifts now, rather than making you wait almost a year to claim the charitable gift when you file your 2010 tax return... Read more →

Life's most persistent and urgent question is: What are you doing for others? -- Dr. Martin Luther King, Jr. Originally, the Martin Luther King Jr. Federal Holiday was created to honor the slain civil rights leader's life. In 1994, its focus shifted to a national day of service. For some, today's MLK community service efforts take a global view. Thousands of Americans are contributing humanitarian services in Haiti, where millions are in need. Many others will be working with groups within the United States to help relief efforts for the earthquake victims. The 2010 holiday will begin at 8 a.m.... Read more →