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February 2010

Connecticut apparently has been taking tax collection advice from my mother, who's always believed in the power of what others think of you (or her kids). Nutmeg State tax officials are big advocates of publicizing information about folks who haven't paid their tax bills. The state maintains two tax delinquents lists, one for individuals and another for businesses. Each list contains the names, addresses and amount due (total of taxes, interest and penalties) of folks or firms who've had tax debts overdue for at least 90 days and whose appeal rights have expired. Some of the nonpayers owe substantial sums.... Read more →

Yesterday, Feb. 27, at 3 a.m. local time an 8.8 magnitude earthquake struck Chile. The quake was many times stronger than the one that devastated Haiti last month and most directly affected Concepción, Chile's second largest city. Aftershocks, some substantial, are continuing in the region. Seismologists say that the tremors will continue for months. Yes, months. But because the initial temblor's epicenter was offshore (officially, outside of Maule, Chile), and the South American country, with its long history of strong earthquakes, is more equipped to deal with these natural disasters, the loss of life reported so far, while terrible, has... Read more →

Colorado is home to some of the most spectacular mountains in the United States, but state revenue collection has reached new lows. The Centennial State's deficit situation is why Gov. Bill Ritter last week signed into law a package of bills taxing a whole new variety of things, including candy and soda. The action was necessary, said Ritter, to help close the $2.2 billion shortfall in Colorado's budget. But even with the new income, some of which starts rolling in on Monday, March 1, Ritter said the state could face additional difficult budget choices when new revenue forecasts come out... Read more →

Economy's effect on tax filing methods

The struggling economy apparently is affecting tax filing. And I'm not just talking about individuals having trouble paying what they owe Uncle Sam or their state tax collectors. The actual business of filing seems to be sensitive to these tough fiscal circumstances, with it looking like hard times help one tax-related sector, but hurt another. Last week, a market analyst with Oppenheimer told his clients that in this soft economy, worried consumers have looked for ways to trim costs, including preparing their taxes themselves instead of paying a fee to have someone do it for them. The evidence of such... Read more →

Where to start with California taxes? The state has given us such things as Proposition 13 that limits property tax increases and set off similar revolutions nationwide, state IOUs in lieu of tax refunds and, of course, the Governator who defeated an erroneous federal tax lien. Yeah, it's easy to poke fun at the Golden State and its taxes. But the Franchise Tax Board folks also have what some say is the filing format of the future: Ready Return. This free service was developed to make filing individual income tax returns easier. Tax officials use information the state already has... Read more →

Baseball season begins with tax Dodgers and spring training surcharges

Some high, hard pitches are being thrown in connection with a couple of Major League Baseball teams, but they're not part of spring training drills. The nastiest knuckleball so far has been fired by Jamie McCourt. The estranged wife of Los Angeles Dodgers owner Frank McCourt (she contends California's community property law makes her co-owner, a claim the court will decide) has revealed how she says the couple avoided taxes on millions. As part of their divorce proceedings now ongoing in California, she's filed court documents that indicate the couple had joint income of $108 million from 2004 through 2009.... Read more →

Although its nickname is The Natural State, I'm sure Arkansas residents prefer to see less of Mother Nature when she's in a really foul mood. Unfortunately, the state has to cope with plenty of natural disasters each year.So it's no surprise that Arkansas tax laws take such catastrophes into account. Since its enactment on Aug. 1, 1997, the state has allowed Arkansas taxpayers to claim a sales tax credit for purchase of a vehicle to replace one destroyed by a natural disaster. Specifically, Act 1348 says: To qualify, a consumer must have paid sales tax on a motor vehicle (trailers... Read more →

Health care summit update

Have you been watching the health care summit? If you're not near a television, C-SPAN is streaming it live. The taped morning session also is available. The Wall Street Journal's Washington Wire blog also has collected some of the best Twitter commentary (yeah, you read that right!) from the morning conclave. The Wire promises to do the same after the afternoon session wraps. I'm not sure what will be accomplished by all this, but it's nice to at least see Democrats and Republicans in the same room, although there's still been some politicking going on. As for the tax implications... Read more →

Most tax years you can't do much to trim your taxes after Dec. 31. 2009 isn't most tax years. Because of modified charitable donation tax rules in connection with Haitian earthquake relief efforts, some taxpayers might be able to bump up their itemized deduction amount. A quick refresher: When the 7.0 earthquake hit that island nation on Jan. 11, donations quickly followed. So U.S. lawmakers, to both reward folks who gave and encourage even more to do so, quickly passed a measure making specific contributions made in 2010 deductible on 2009 tax returns. The important point right now is the... Read more →

Arizona tax law aims to let its residents take advantage of that state's sunny clime. Grand Canyon State homeowners who install a solar energy device in their homes may claim a solar energy credit. The state tax credit for buying and installing a solar energy device is 25 percent of the cost, including installation, or $1,000, whichever is less. If you install more solar equipment in a later year, the cumulative credit cannot exceed $1,000 for the same residence. And the tax credit isn't refundable. That means it will only zero out what you owe the Arizona tax collector, but... Read more →

Snowmen protest Michigan tax proposal

While we Austinites were out simply playing in our rare and minimal snowfall yesterday, some folks up north were putting their flakes to an anti-tax purpose. Common Sense in Government, a group opposed to a possible sales tax expansion in Michigan, built more than 30 angry snowmen on the state capitol lawn to protest the move. Video courtesy CBN Michigan faces a budget shortfall of around $1.7 billion for the fiscal year that begins Oct. 1. To make up some of that money, Gov. Jennifer Granholm has proposed extending the state sales tax to cover some services. In exchange, she... Read more →

As I mentioned earlier this week, Don't Mess With Taxes has been nominated for The Plutus Award as a top tax blog. In my giddy nomination announcement (I'll say it again: It's a thrill just to be nominated!), I also threatened promised to let you know when you could help determine the winner of each of the many Plutus Awards categories. Now's that time. Flexo at Consumerism Commentary, creator of the awards, explains The Plutus Awards genesis and the voting procedure for the ultimate winners. If you're so inclined to give the ol' blog a click, thank you! You can... Read more →

It's Tax Twitter Tuesday time again! We're in the heart of tax filing season, but some tax folks certainly know how to keep things in perspective: @taxmegan I like managers meetings. They usually lead to food and beer. All I have to say is can I work in @taxmegan's office!? Now to other tasty tax matters. @YoungCPANetwork IRS initiatives could change compliance landscape for practitioners, taxpayers in 2010: (@AICPA_JofA) @sherylschuff RT @DianeKennedyCPA: Is Your S Corp a Big Fat IRS Red Flag? @going_concern SHOCKER: Accountants Have a Conservative... Read more →

Alabamans can sing, with apologies to Lynyrd Skynyrd, a chorus of Sweet Charitable Tax-deduction Home Alabama this filing season. Yellowhammer State taxpayers who donated to Haitian earthquake relief efforts earlier this year get a 2009 state as well as a federal tax benefit. State Revenue Commissioner Tim Russell noted that Alabama is following the federal tax relief provision offered to U.S. taxpayers. This means Alabamans who made cash contributions to qualified charities providing earthquake relief can claim those donations on their 2009 state income tax returns if they wish. Eligible donations include monetary gifts made by check, credit or debit... Read more →

Here on the ol' blog, I tend to focus on federal filings. That's because most of us at some point in our lives have to file paperwork with the IRS. But there also are state taxes. Since there are 50 of them, plus the District of Columbia, and just one of me, the states get somewhat short shrift here, at least when it comes to specific filing responsibilities. However, as we head into the 2010 filing season home stretch, I'm going to remedy, at least partially, this oversight. I've created a separate page with links to each state's and D.C.'s... Read more →

Wow! What a nice way to start a week. I've just learned that Don't Mess With Taxes is a finalist for 2009's best tax blog. The honor comes via The Plutus Awards, brainchild of Flexo at Consumerism Commentary. The Plutus Awards, whose name was inspired by the Greek god of wealth, was created to recognize the best in both blogging and financial products. Finalists were announced today. I am honored to find the ol' blog in such fine tax blogging company as Joe Taxpayer, Good Financial Cents, Taxgirl and My Dollar Plan. Not to sound like those Hollywood types who... Read more →

Are you finally sorting through those W-2s, 1099s and all sorts of other tax documents you received? Now comes the fun part -- entering all that information on your tax return. Most of us us use tax software or turn all that stuff over to a tax professional to complete the job. Still, I thought it might be helpful for a quick refresher of some new forms that might affect your return this year. Schedule L: If you claim the standard deduction, and most filers do, this document could help you increase the amount you can claim.The new Schedule L... Read more →

The string of states lining up to tax online sales is nowhere as attractive as the Rose Parade, but it is a virtual tax parade. And the state that's home to that annual floral spectacular is now part of the group. The California Senate has passed a bill that would require online retailers like Amazon to collect sales tax on Web purchases. The provision is part of a $5 billion budget package making its way through the Golden State's legislature. CPA Diane Kennedy expresses the concerns of many Amazon (and similar) affiliates: In several states that have passed or threatened... Read more →

Homebuyer credit semantics

Words matter. Just ask folks trying to figure out the first-time homebuyer tax credit. Questions have swirled around this tax break since its creation back in 2008. Every time it's been tweaked -- three times in less than two years in case you're keeping score -- more questions come up. And with the tax break's latest iteration back in November, a whole new group of folks, long-time or move-up buyers, have been asking questions. If you meet this provision's guidelines, then you can claim a credit of up to $6,500 on your return. "Some people think you actually have to... Read more →

In tax circles, the discussion following the plane crash into an Austin office building that housed an IRS office has centered on two topics. First, there's Section 1706, the part of the Internal Revenue Code that deals with independent contractors, specifically those in high tech fields. That law was changed in 1986 as part of the major tax code overhaul. The TaxProf has a good roundup of articles discussing the tax components of the heinous act, but two in particular stand out. The Tax Foundation's Joseph Henchman examines that law, as does David Cay Johnston in an article for the... Read more →