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February 2010

On Valentine's Day, I looked at the tax implications of courtships that turn into marriages. Today, in light of Tiger Woods' statement about his indiscretions, I thought I'd reprise some info about tax considerations when a marriage ends. Now I'm not saying I doubt the sincerity of Tiger's apology. But I noticed that Elin was not there. Personally, I'm glad she wasn't. He's the one who made such a mess of everything; he needs to clean it up himself. And I'm not saying I think or hope they will split up. I'm a big fan of marriage, having been in... Read more →

State tax refund delays are now the norm

Remember when everyone was snickering at California for issuing IOUs instead of tax refunds? Quit laughing. More financially-strapped states are holding onto their residents' tax refunds longer. North Carolina's Revenue Secretary Kenneth Lay has announced that his office is delaying refund checks due both individuals and businesses. Holding onto the money is a cash-flow necessity, Lay said, because the state is facing a shortfall due to "anemic" collections, a common problem across the United States. Even paradise is having refund money issues. The Hawaii Department of Taxation, which already has up to 90 days before it has to send out... Read more →

Man angry at IRS crashes plane into Austin building

It's one thing to read about people who are angry at the tax code and the people who administer it. It's another to see that anger manifest destructively in your town. By now, I'm sure you've heard about the Austin man who, after years of reported tax problems, decided to take his life and apparently try to take down a local IRS office, too. Joseph Stack flew his Piper Cherokee PA-28 into the office building that houses the Austin tax office. He's dead. Two people were injured, one suffering serious burns. One person who works in the Northwest Austin building,... Read more →

More 'Amazon taxes' advance in states

Attention online shoppers. States are moving forward in their efforts to collect sales taxes on items purchased from remote retailers. This week, the Virginia Senate approved a measure that would require Internet retailers to collect the Old Dominion's 5 percent sales tax. Virginia lawmakers say they are justified in demanding their version of the so-called Amazon tax, named after the popular online retailer, because the Seattle, Wash.-based company has two facilities in Northern Virginia. The bill goes further, however, by also citing presumed nexus, or physical presence, in the state based on a company's agreements with affiliates. In this case,... Read more →

When I saw the headline in the San Antonio Business Journal, my heart leapt. Girl Scouts help Health Science Center researchers fight obesity Alas, while the young women's latest effort is to be commended -- they're helping involve their community in a Texas Health Science Center at San Antonio project to encourage physical activity among girls -- I was hoping it had something to do with great tasting, lower calorie Thin Mints. Hi. I'm Kay and I'm a Girl Scout cookie addict. Like anyone who's obsessive about anything, I rationalize: My cookie purchases (ooohhh, look at the variety!) are for... Read more →

Are you getting your daily dose of tax tips? One a day could help keep the auditor away. Even better, they could mean savings when you send the IRS your Form 1040. So be sure to check the upper right corner of the ol' blog for a new tip every weekday through April 15. Today's tip, number 30 in our series, is a look at those taxes that could actually pay off. They're the state and local levies you can use to help reduce your federal tax bill. And don't worry if you miss one or two. You can find... Read more →

Tax laws, guns and money

With what's been going with the IRS of late, it may be time for someone to add a tax twist to the late Warren Zevon classic, Lawyers, Guns and Money. Not that I, being a native Texan, want to perpetuate any stereotypes, but let's start with the guns even though that's second in the headline and song title list. A couple of weeks ago, the IRS announced it was seeking bids (or as the agency calls it, a Request For Quotation) for 60 Remington shotguns for its Criminal Investigation Division. The request goes on in detail about the weapons specifications.... Read more →

Love and taxes. Yes, they do go together. First, all you married folks. Congratulations on sticking with those vows. I know you didn't invite Uncle Sam to your wedding, but he was there in spirit. When it comes to taxes, your marital status for a tax year is determined by your relationship status on Dec. 31 of that year. If you were married 364 days but the divorce was final on the last day of the year, then when you file that year's tax return you are single. Conversely, if you didn't get married until Dec. 31, then those 364... Read more →

With Toyota's troubles, General Motors and Ford are hoping to get new customers who now want to give the domestic car makers another shot. And some of those who might have had their hearts set on a Prius are perhaps looking at other hybrid options. If you are a Blue Oval fan, then you might want to go shopping for a fuel-efficient Ford sooner rather than later. Remember that tax credit for hybrids? The one that dwindles as a manufacturer sells more and more of the vehicles? Well, the hybrid tax credit is phasing out on eligible Fords. In fact,... Read more →

That's right. The hijinks and hilarity of an IRS office. Or, as they say in the television biz, an "IRS laffer." OK. I'm a bit dubious. But that's what Ron Howard, who brought us the wonderfully skewed (and under-appreciated) Arrested Development, and Brent Forrester, writer-director of the U.S. version of The Office, have planned in the show for Fox. The workplace comedy set in an Internal Revenue Service district office apparently is an idea that Howard has been toying with for years. Hmmm. Now I'm really curious about his personal tax experiences. The still untitled project -- how about Happy... Read more →

Texas stripper 'pole tax' to get review

The highest court in the Lone Star State has agreed to consider whether the state's $5 charge on strip club patrons violates the First Amendment right of free expression. How nice. The decision to take the case came just in time for Valentine's Day. At issue is whether the so-called "pole tax" unfairly singles out for regulation nude dancing in clubs that serve alcohol. Last summer, the 3rd Court of Appeals in Austin agreed, by a 2-to-1 vote, with a state district judge's decision to strike down the law. "While nude dancing 'falls only within the outer ambit of the... Read more →

7 new tax laws that could save you money

Welcome to prime tax-filing time. Tax forms (W-2s, 1099s and the like) have arrived and folks are ready to get their 1040s into the IRS so they can get their refunds. If you're among the 40 percent of taxpayers working on your return this month, here are some tax law changes that could help you maximize your refund. Or at least reduce any amount you might owe Uncle Sam. 1. Home is where the tax heart is The big break this filing season is the first-time and move-up homebuyer credits. The tax break underwent three revisions in less than two... Read more →

Satellite TV sues to end taxes

Satellite television providers say the taxes that seven states levy on their services are unfair. So they're heading to court. While they might still snipe at each other in commercials, DirecTV and Dish Network have joined forces in a lawsuit they've filed against Massachusetts. The two companies contend the 5 percent tax on satellite services they pay in the Bay State is discriminatory because it applies to them and not rival cable TV operators. Cable TV operators pay franchise fees to municipalities because they need access to public property to lay cable lines. The satellite TV companies say they should... Read more →

Refund loans on the ropes?

That old saying about it's an ill wind that blows no good certainly comes to mind in connection with the economy and refund anticipation loans. It looks like the economic downturn that's hurt millions is at least partially responsible for a recent reduction in these sketchy financial products, known by tax wonks as RALs. These are high-interest loans that too many people apply for just so they can get their hands on their expected tax refunds a few days early. But that impatience usually comes with a high price. The sad truth is that most of the folks who take... Read more →

AIG has announced it is restructuring its incentive pay program. The insurance giant, which we taxpayers technically control thanks to our $90 billion investment, says it will use a a "forced distribution" system. Thousands of AIG employees now will be ranked on a scale of 1 to 4 based on their performance relative to their peers. Then their annual variable compensation, which may include bonuses, will be determined by their rank. Gone are the old retention awards that are based on just sticking around. Welcome to the brave new world of pay for performance. Under the plan, only 10 percent... Read more →

Wacky tax deduction time

By now I'm sure you've heard about the recent Tax Court ruling that gender reassignment surgery costs are deductible medical expenses. You didn't? Then check out TaxProf's item on the ruling. He also includes lots of related links if you want to read even more. While that was case covered serious medical, social and tax matters, every year we get lots of taxpayers who simply try to get one (or more) obviously questionable deductions past the IRS. My colleague Jay MacDonald has just compiled his latest look at some of this year's Wackiest tax deductions. Texas tax twists: I... Read more →

Folks tend to get creative at tax time. Usually, though, the innovation involves entries on Form 1040 and associated schedules. But one crafty woman has come up with another way we can stick it to the tax man. Erin, who's known as sewsewsuckurtoe on Etsy, has created the Tax Man pin cushion you see there to the right. She says that the idea came to her "at tax time when I was busy sewing voodoo doll pin cushions and took a break to write those wonderful checks that needed to be mailed in before April 15th." Now while the inspiration... Read more →

Taking taxes directly from bank accounts

Tax departments are somewhat analogous to Blanche Dubois. But rather than kindness, they depend upon the compliance of strangers taxpayers. Missouri's governor, however, thinks it's time for his state to rethink its policy of waiting for voluntary payments. Gov. Jay Nixon wants state revenue officials to be able to seize delinquent taxes directly from people's bank accounts. Whoa there cowboy. You are definitely going to have to show me that this is a good idea. OK, Nixon isn't talking about Missouri tax collectors diving into every taxpayer's bank account. Rather, he wants them to go directly after the money from... Read more →

Talking taxes: Adjusting your withholding

Every year I swear I'm going to do some podcasts here on the ol' blog. Then tax season arrives and I get swamped. Thank goodness for Flexo and Tom. In addition to being podcasters extraordinaire at Consumerism Commentary, this tax season they're recording spots for TurboTax's blog Tax Break. So I was jazzed when Flexo and Tom invited me to be part of the program. It's always fun to literally talk taxes. Even better, they edited our conversation so that I sound really cool discussing why and how to adjust your payroll withholding. Thanks guys! Related posts: New year, new... Read more →

Were you a Super Bowl bet winner?

Congratulations to the Saints for their win in Super Bowl XLIV. Now to the big tax question. Were you also a winner when it came to a bet on who would take home the Lombardi Trophy? If you did pocket a few (or more) extra bucks thanks to the efforts of Drew Brees, Reggie Bush and teammates, be sure to share with Uncle Sam. Remember, gambling winnings are taxable income. I'm sure, however, that all those ecstatic New Orleans fans who put their hearts and money on their team won't be complaining too much. Prop bet P.S.: Well, I would... Read more →