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February 2010

January 2010

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 →

The holidays are over. Schools are back in session. You've settled back into your workplace routine. And tax filing season 2010 is officially underway. With that in mind, we bring you Tax Carnival #63: Filing Season Begins. We have a small, but valuable collection of tips to help you get your 2009 Form 1040 filing and your 2010 tax planning rolling. Kicking it off is me (hey, editor's prerogative!) with E-filing 2010 is here ... except for homebuyer credit claimants. It's posted, of course, here on Don't Mess With Taxes. Staying with the electronic tax theme, Patrick presents How to... 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 →

Well, the NFL season is over for me now that the Cowboys choked lost to the Vikings this afternoon. The good news is that other sports -- and taxes -- now will have my undivided attention. And it's already started. The Times of London reports today that new tax rules in the United Kingdom "threaten to drive away some of the biggest overseas names from showcase events in Britain." HM Revenue & Customs (HMRC) is aggressively imposing levies on athletes' endorsement earnings. On top of that, the British revenue office is also targeting sponsors' performance-related bonuses. What this means is... Read more →

The IRS began accepting electronically filed returns yesterday, Jan. 15. The big e-file news for the 2010 filing season is what can't be submitted via cyberspace. Anyone claiming a homebuyer credit, either the $8,000 for first-time residence buyers or the $6,500 version for move-up primary property purchasers, will have to send in their 1040 and associated credit Form 5405 by snail mail. That, of course, is going to slow down any refund you might get. Even worse, the IRS is not going to even start processing these paper forms until mid-February. The agency says it needs the extra weeks to... Read more →

Craig's wise words about Haiti's crisis

The late-night television focus recently has been on Conan and Jay. But the best after hours program is CBS' Late Late Show with Craig Ferguson. Here's a guy with superb comic timing and the proverbial rapier wit. He doesn't suffer fools gladly or actually at all; he's flat out said he won't book folks who have nothing to offer to a conversation. He is, however, more than happy to play the fool himself. He's also a damn good writer. And who can resist a late-night host who's eager and willing to discuss Flaubert and deconstructionism on his program. Most importantly,... Read more →

It now looks like the move to make the now-dead estate tax retroactive to Jan. 1, 2010, is itself starting to show failing life signs. The Dow Jones Newswires service reports that Ways and Means Chairman Charles Rangel (D.-N.Y.) is unsure whether there will be legislation to re-impose the federal estate tax retroactive to the first of this year. This is exactly what I suspected would happen (slide 12 of my presentation this week to Austin CPAs). Of course, I thought it would be estate tax opponents leading the charge, not the man who heads the House tax-writing committee and... Read more →

Flight of 'golden geese' taxpayers

As I mentioned in my presentation to a local CPA group yesterday, taxes on higher income earners are getting a lot of attention. A surtax on the wealthy, for example, is part of the House version of health care reform. But taxes and how they are distributed has long been part of our fiscal and political landscape. In the last presidential election, Obama set $250,000 as the threshold for defining where the tax hikes would fall.Whether you consider a quarter of a million dollars wealthy depends on a lot of things, including not just your current paycheck or Visa balance,... Read more →

Why does this sneak up on me every January? It's right over there in the ol' blog's tax calendar to your left. Still, boom! I almost forget about it year after year. I'm talking, of course, about the previous year's final estimated tax payment. Yep, it's 1040-ES time again. Voucher number four needs to be on its way to the IRS by Friday. I just logged on to the IRS' Electronic Federal Tax Payment System, or EFTPS, site to have my final 2009 estimated payment shifted over to the Treasury electronically at week's end. If you want to mail your... Read more →

Practical effects of tax law changes

I just got back from a great luncheon meeting of the Austin Chapter of the Texas Society of CPAs. They invited me to speak and since these are folks who are in the tax trenches, I suggested I rant about present an overview of federal tax law changes, the process that created them and the changes' effects on 2009's filings and 2010's tax planning. It was a great group (I never expected anything less from CPAs!) and they asked many interesting follow-up questions. Their insights and additions to the conversation made me wish we had more accountants in Congress! When... Read more →

Right now I know you're focused on your 2009 tax filing, due April 15, which means you're concerned about what tax bracket last year's income fell into. And then there's your 2010 tax planning. For that, you need to pay attention to the 2010 tax rates and income brackets. But for those of you who really, really like to plan ahead or want to have something else to worry about, check out this very interesting table detailing the expected top tax rates for various types of income at this time next year. Yep, that's what could, might, is expected to... Read more →

Whistleblower group urges UBS review

The UBS tax haven saga is slowly playing out, but some folks are upset with what they see as inequitable justice. Last week, another client of the Swiss bank pleaded guilty to a $6.1 million tax fraud. After providing U.S. prosecutors with "substantial help" in their continuing criminal inquiry, 67-year-old Juergen Homann was sentenced on Wednesday to five years probation, a $60,000 fine and 300 hours of community service. Two days later, a former Boeing Co. sales manager who admitted last October to using a UBS account to hide $1.86 million from the IRS was sentenced to a year of... Read more →

Yesterday would have been The King's 75th birthday. I thought of you Elvis, but this Jan. 8 was a crazy day and I just never got around to wishing you all the best. I'm sure if you're alive, you'll understand. Things kind of got out of control for you now and then. And if you're dead, I hope you're not spending eternity worrying about such inconsequential earthly issues. Regardless of whether you believe Elvis is rocking out on another plane of existence or still enjoying fried peanut butter and banana sandwiches (for energy in his battles against an ancient evil... Read more →

Amazon, Google and taxes, oh my!

The credit card bills with Christmas charges are starting to show up and, like millions of other shoppers, the hubby and I spent much of our holiday budget at virtual storefronts. Such dot-com spending habits are of great interest to state tax departments. I've blogged before about cities and states going after online operations, as in Chicago's tax lusting after eBay and StubHub transactions. But the favorite tax target of most state revenue offices is Amazon. The Seattle-based seller collects sales tax in just a few states. Last year, however, the quest for more money prompted several revenue-hungry state legislatures... Read more →

Taxes can be scary, sort of like that skeleton hand there to the right. But if you follow that creepy pointing pile of bones, it'll direct you to the Daily Tax Tip, which should help alleviate some of your tax fears. Yep, we're up to tip #4, right over there to your right. Yeah, in that next column. There at top. This is the last day that this announcement post will be up here leading off the ol' blog's postings, but the Daily Tax Tip, via Bankrate's Annual Tax Guide (and yes, I write them), will continue to be a... Read more →

Miles and miles of Texas traveling taxes?

As regular readers know, I've blogged ad nauseum regularly on the fiscal troubles of many of our 50 states. One of the common themes in these struggling state posts is the creative ways tax officials and lawmakers are coming up with to pay the bills. OK, California's IOUs were more sad than ingenious, but you know what I mean. Now it looks like my native state, which had a couple of European banners among the six flags that variously flew over us, is taking a cue from another transatlantic country. I wrote a couple of months ago about The Netherlands'... Read more →