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March 2010

The oil industry is still big in Oklahoma, but that's not stopping officials there from offering taxpayers a substantial credit for electric vehicles. The Credit for Investment in Qualified Electric Motor Vehicle Property is worth 50 percent of the price of the vehicle. You can claim it by filing Form 567-B. The credit, however, has not been without controversy. Sooner State tax officials say that under the tax credit law, "the term 'qualified electric motor vehicle property' shall not apply to vehicles known as 'golf carts,' 'go-carts' and other motor vehicles which are manufactured principally for use off the streets... Read more →

More big business stimulus tax breaks

How does this keep happening? Apparently private sector lawyers are much better than Uncle Sam's attorneys. Or, as Scott Jagow who blogs at Marketplace radio's The Scratchpad, puts it: "The government's generosity toward big business in this recession has known few boundaries." The latest example, per the Wall Street Journal, is JP Morgan Chase & Co., which is nearing a deal that would allow it to benefit from a tax refund of as much as $1.4 billion, becoming the latest company to tap a little-noticed plank in an economic stimulus bill. That law let companies apply losses from 2008 or... Read more →

Most tax procrastinating cities

TurboTax has once again looked at its data and ranked U.S. cities according to how many of their residents put off tax filing. This year's winner, or loser depending on your point of view, is Houston. Yay, Texas! Yeah, we're obnoxious that way. We like to be top of the heap even when the statistics are bad! Infographic by Column Five Media, courtesy of Click here for a larger version. Actually, the list is from the 2009 filing season, which makes sense since the 2010 numbers are still coming in. TurboTax arrived at rankings based on the number of... Read more →

Sin taxes on such things as alcohol and tobacco are a popular way for states to collect much needed revenue. To make sure it gets every penny it's owed on tobacco products, Ohio has set up a hotline. By calling toll-free 877-SMOKE-80 (877-766-5380) callers can report retailers suspected of selling untaxed tobacco products. Packs of cigarettes that are sold legitimately bear a state tax stamp. Penalties for selling untaxed tobacco products could be misdemeanor or felony charges, depending on the quantities of illegally sold products. Sellers convicted of illegal sales also will owe taxes and penalties on the products that... Read more →

It's Tax Twitter Tuesday time again! It sorta sneaked up on me, what with all the health care reform hubbub and the rapidly approaching tax filing deadline. So this month's T3 is going be a big shorter than usual. That, however, doesn't diminish its tasty Twittery goodness! So here goes. Given that most of us have been paying more than usual attention to Congress of late, let's start with the folks on the tax-writing committee. @WaysMeansCmte Our hearing has concluded. Thank you for clicking in. If you missed it, you can find information here @WMRepublicans Says Camp, the IRS... Read more →

Last week I got a call from my mom. Usually she just wants to chat about how her life is going, what's up with me and dish some dirt on relatives. Just kidding dear extended family members! Just wanted to see if y'all were still reading the ol' blog! This time, though, she had a tax question. She wasn't sure about this Schedule M and what is this recovery payment it wanted to know about? She swore she never got a check last year. As it turned out, my mom, along with millions of other Social Security recipients, did get... Read more →

North Dakota tax officials sure know how to be good neighbors. Shoppers from bordering provinces Manitoba or Saskatchewan, or anywhere else in Canada for that matter, might be eligible for a refund of the state sales tax they paid on purchase while visiting North Dakota. The refund is available for individuals only, not businesses, on real goods that are used outside of North Dakota. This includes such things as appliances, jewelry and clothing. Other North Dakota purchases of items or services that are provided or fulfilled in the state, such as hotel rooms, restaurant meals and admission to events, are... Read more →

Tax provisions in the health care bill

Summer's on its way and so is the tanning tax. As part of the health care reform bill passed last night by the House, several taxes will start showing up to help pay for the changes. The 10 percent excise tax on indoor tanning services takes effect July 1. So you might want to schedule your session sooner rather than later. Other taxes and payment mechanisms are further down the road, such as limiting flexible spending account contributions to $2,500 beginning in 2013 and taxes on "Cadillac" coverage to be paid by insurers starting in 2018. The Tax Foundation provides... Read more →

The dreaded T-Day, April 15, is bearing down. Have you done your taxes yet? Are you planning to tackle them yourself? Then I've got just what you need. Tax help at your fingertips. Yeah, I know you already have that by surfing on over here to the ol' tax blog. And I really appreciate that. But thanks to the folks at H&R Block, I can provide one lucky Don't Mess With Taxes reader another avenue for tax help: an iPod Touch loaded with the tax franchise's Tax Answers App. The app will connect you to the Get It Right Community,... Read more →

Beware the Dirty Dozen tax scams

Criminals work 365 days a year, but the the annual U.S. income tax filing season is prime scam time. For the last few years, the IRS has issued an annual list of the 12 most prevalent scams. Dubbed "The Dirty Dozen," the list doesn't change dramatically from year to year, which just proves how successful, at least for the perpetrators, some of these long-standing cons are. Regular repeats are phishing, illegal offshore accounts and return preparer fraud. Here's the 2010 list: Return Preparer Fraud Hiding Offshore Income Phishing Filing False or Misleading Forms Nontaxable Social Security Benefits with Exaggerated Withholding... Read more →

When 2010 rolled in, so did assessment of North Carolina's 5.75 percent state sales tax on certain digital property. The new tax covers a wide range of digital material, whether delivered or accessed electronically by direct download or by entering a digital code. Covered items include podcasts, ring tones, movies, books, magazines, newspapers, newsletters, reports, photographs and greeting cards. In addition, certain electronically-delivered computer software is no longer exempt from sales tax. But there is a new exemption that includes computer software or digital property that becomes a component of other computer software or digital property that is part of... Read more →

Even before the ink from Obama's signature on the jobs bill dried, the debate was on as to just how much it would do to get people working and the economy moving. Robert H. Frank, economics professor at the Johnson Graduate School of Management at Cornell University, says we need to come at the problem from another direction: a surtax on extremely high levels of consumption. Most households would be exempt from Frank's proposed tax since it would be levied only on families earning more than $1 million and who consume more than $500,000 annually. But even if limited to... Read more →

New York City's firefighters might have Rescue Me, but volunteer firemen and women throughout the Empire State have a tax credit they can claim on their income tax returns. Actually, the tax break is for emergency medical technicians, too. The Volunteer Firefighters' and Ambulance Workers' credit provides $200 to any New York resident who was an active volunteer firefighter or volunteer ambulance worker for the entire 2009 tax year. While it's not a huge credit, it is refundable. That means you may get money back if the credit exceeds your state tax liability. To claim this credit you must complete... Read more →

Home mortgage interest is the biggest tax deduction most of us have. That's because that home loan is our biggest debt. So it's not surprising that the urge to pay off a mortgage is strong. Many people do so by making extra principal payments, either via biweekly payments, adding an single extra payment each year or including a little more with each payment. I've been doing the latter since the hubby and I bought our Austin home five years ago, simply rounding up the monthly payment to the next amount that ends in zero. All personal financial decisions are, well,... Read more →

If you've always wanted to tell the IRS how to do its job, now's your chance. Join the Taxpayer Advocacy Panel. As you may know, I was a TAP member for three years, wrapping up my term last December. It was one of the best experiences of my life. I got to meet people from across the United States who really want to make the IRS' services and products better. We've already done a lot, but there's much left to do. So if you want to help and live in California, Colorado, Illinois, Michigan, Mississippi, Nebraska, Nevada, New Hampshire, New... Read more →

Willard Scott would love New Mexico. The state allows an added exemption for taxpayers who are 100 or older. That's right. Age does have its tax advantages in the Land of Enchantment. The earnings of a person 100 years old or more is exempt from the state's income tax. You must have celebrated that momentous birthday by the end of the tax year for which you claim the exemption. And you'll need to fill out Form PIT-ADJ to make sure the department of Taxation and Revenue knows you're in the tax clear. You also must be a self-sufficient centenarian. If... Read more →

You know that old saying, you've got to spend money to make money? That might be true in some cases. But when it comes to taxes, don't fall for spending money just to save on taxes. Year after tax year, one of the most common refrains from both so-called experts and taxpayers is "there's a deduction for that." I admit it. I write about deductions here on the ol' blog all the time. But when it comes to these tax breaks, every filer needs to answer a key question: What exactly is that deduction worth? If you can't come up... Read more →

Health care bill gives IRS added power

As the health care reform vote comes down to the wire, the gloves are coming off on Capitol Hill. As Democrats seemed to be gaining ground in their effort to get the latest version of the reform measure passed on Sunday, the Republicans launched a new assault, warning of increased involvement of another widely distrusted federal agency, the IRS. "This dangerously expands IRS authority," said Representative David Camp (R., Mich.), ranking Republican on the Ways and Means Committee, in the latest effort to derail the proposal. "Most Americans will find it shocking and troubling." Under the bill, taxpayers could be... Read more →

Relax wealthy New Jersey residents. The state's millionaire's tax expired on Dec. 31, 2009. Now the Garden State's top tax rate is 8.97 percent on annual incomes above $500,000. But all you rich folks still have to deal with 2009 taxes. Last year, the 8.97 percent rate was replaced by three rates: 8 percent on earnings between $400,001 and $500,000; 10.25 percent on income between $500,001 and $1 million; and 10.75 percent on folks raking in more than a million dollars a year. Opponents of the temporary 10.75 percent tax say good riddance. Now the hope is that with a... Read more →

First it was state tax departments that were using social media to track down folks who owed money. Now Uncle Sam is taking advantage of the information on these popular sites. The Electronic Frontier Foundation obtained documents, via a Freedom of Information Act request it filed with the assistance of the University of California, Berkeley's Samuelson Law, Technology and Public Policy Clinic, that show law enforcement offices and several federal agencies, including the Internal Revenue Service, are gathering information from social networking sites for their investigations. Although IRS agents are limited to only accessing and using publicly available information from... Read more →