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April 2010

Putting the homebuyer credit to rest

It's really happening. The first-time homebuyer credit is on its final hours. After today, the $8,000 tax break for folks who are buying their first home (as defined by the IRS) and $6,500 credit for those who owned a place for five consecutive years and decided to buy another one is erased from the tax code. If you were able to take advantage of this tax break by getting in under the April 30 wire, you still have until June 30 to close on your home. And all home purchasers who claim the credit will eventually have some filing specifics... Read more →

For most taxpayers at both the federal and state levels, tax filing season wrapped up earlier this month. But some folks always seem to overlook their tax responsibilities. Well, they could be getting a second chance to make things right with their state tax officials if they live in Massachusetts, Nevada and Pennsylvania. Yep, tax amnesties in those states are underway or will be later this summer. Under these amnesty programs, individuals and businesses that haven't filed get a chance to pay what's due and escape some of the usual penalty and interest charges. While it might seem counter-intuitive for... Read more →

Extenders outlook from W&M chair

Rep. Sander Levin (D-Mich.), the man who heads the tax-writing Ways and Means Committee, recently looked into his legislative crystal ball and issued some predictions about the still pending tax extenders. Extenders, as all y'all know by now, are those ostensibly temporary tax breaks that seem to live in perpetuity thanks to continued, albeit often late or even after-expiration, approval by Congress. A large group of such tax breaks died on Dec. 31, 2009. The House had managed last December to pass a measure keeping them on the books beyond 2009, but the Senate didn't act on the bill, H.R.... Read more →

Adding adult kids to health care, FSAs

The IRS has some good news for parents of adult kids who don't have health care coverage. Under the recently enacted Patient Protection and Affordable Care Act (aka health care reform), parents can add their dependent adult children who are age 26 or younger to their medical insurance coverage. Technically, this option was to take effect on Sept. 23 or as soon after that date that an insurance plan renewed. However, the IRS has ruled that such coverage can begin immediately. Actually, it said it could be effective retroactively to March 30. The feds' early implementation ruling comes on the... Read more →

'Successful, costly' first-time-plus homebuyer credit ending

As Senators are grilling Goldman Sachs executives about that investment bank's part in the mortgage debacle, another by-product of the bursting housing bubble is ending. The first-time homebuyer credit, which morphed repeatedly since its inception in 2008 as a faux credit, officially stops being available on April 30. By that date, home purchasers much have a valid contract in hand and then close on the property by June 30. And when Friday finally rolls into Saturday, we can all breathe and let the housing market find its real footing. Yes, that's likely to mean some more real estate ups and... Read more →

Our state tax refund is in our bank account! Confused because we got a state tax refund and live in Texas, one of seven states with no income tax? (For state tax sticklers, Tennessee and New Hampshire don't tax wage income, but they do tax other types of earnings.) As regular readers know from my previous bitching moaning whining posts, the hubby gets some money from a company based in Georgia and the Peach State tax statutes say it can collect taxes on earnings paid from Georgia sources. So his employer withholds the state taxes and we file the state... Read more →

Honestly! Those are the findings of recent surveys, one done for Fox News, the other for CBS News. The polls, notes David Cay Johnston in his Johnston's Take column in Tax Analysts' Tax Notes Today, were conducted "shortly before the dreaded tax day, a fact that may have influenced the results given the focus that politicians, and thus the news media, give to taxes and the IRS from March to the ides of April." Whatever the timing, the Johnston looked at the figures from both polls and reports: Last place in favorable impressions goes to the former governor of Alaska.... Read more →

If IRS Notice 1397 shows up in your mailbox, don't panic. The postcard (an excerpt of which is shown below) doesn't mean you're in tax trouble. Neither does it indicate the IRS is about to audit you. Rather, it's the agency's effort to let small businesses and tax-exempt organizations know that they might be eligible to claim the recently-enacted small business health care tax credit. More than 4 million of the cards are in the mail. The tax break is part of the health care reform measure, officially known as the Patient Protection and Affordable Care Act, that was signed... Read more →

Sorry, people. It doesn't matter that other people used tax software and ended up filing incorrect returns, even if one of them is the Secretary of the United States Treasury. It's still your, other taxpayers' and Treasury Secretary Timothy Geithner's ultimate responsibility to properly calculate and file your taxes. When you don't, regardless of who you are and which tax filing method you used, the IRS is well within its rights to demand that you pay your accurate tax bill and any associated penalties that errors might have caused. The TurboTax excuse: You remember the Geithner case. During his Senate... Read more →

The answer to that question, especially soon after most of us have completed our annual tax filing task, is a definite yes. The practicalities of tax reform, however, always seem to fall prey to Congressional tinkering that makes for good political bullet points but inevitably adds the tax code's complexity. Still, hope springs eternal, both from taxpayer and Capitol Hill perspectives. The latest official Washington effort comes from two Senators who've proposed the Bipartisan Tax Fairness and Simplification Act of 2010. Introduced back in February, the bill (S. 3018) is the brainchild of Senate Finance Committee member Ron Wyden (D-Ore.)... Read more →

While National Football League fans have been working on their mock drafts in preparation for tonight's big event (yes, that's right; the #1 NFL pick this year will be announced just after 7:30 p.m. Eastern time on ESPN), the league and Michigan tax officials have been having their own go-round. It seems that more than four years after Detroit hosted Super Bowl XL, Michigan filed liens against the Super Bowl Host Committee charging that the group did not pay all required worker related taxes. The allegedly unpaid withholding and unemployment insurance taxes amounted to nearly a quarter million dollars. As... Read more →

America's become the great rebate country. In addition to all those tax rebate checks during Dubya's tenure, in these early years of the Obama administration we've gotten lots of energy-related rebates. Remember Cash for Clunkers? Officially known as the Car Allowance Rebate System or CARS, that program last summer enticed more drivers than expected to traded in their gas guzzlers for energy efficient autos. Next came the appliance rebate extravaganza. Here states got a chunk of $300 million appropriated as part of the American Recovery and Reinvestment Act (ARRA for short, but better known as the February 2009 stimulus bill)... Read more →

I know all y'all have already taken my earlier post about organizing your tax records to heart and have all your 2009 filing material properly categorized and filed. Yeah, me neither. Well, here's one instance where procrastination pays off (but don't tell the hubby that I said that!). To help you get your 2009 tax records under control and give you a head start on your 2010 taxes, I am giving away a NeatReipts mobile scanner. Readers who've been around for a while might remember The Neat Company provided one of these nifty products last year. The scanner not only... Read more →

Bank tax to fund extenders?

On April 15, millions of taxpayers took advantage of some tax breaks for the last time. Technically, that is. In the tax law and political world, these tax deductions and credits will be back on the books as soon as Congress can agree on how to pay for them. Known as extenders because they officially are temporary tax laws that get renewed, or extended, usually retroactively by lawmakers who just can't seem to get their legislative acts together in a timely fashion. Both the House and Senate have passed separate pieces of legislation to put $26 billion in tax cuts... Read more →

Did you spend the weekend sorting through the tax material you used last week to file your 1040? Me neither. But it's time to do just that. Getting your post-filing records in order is just as important as having them handy when you fill out your return. The main reason is that you might need them to persuade an auditor that all your claims are legitimate. That's my tax filing paperwork there to the left. As I mentioned in an earlier post, I do a down and dirty paper return before transferring the data to my PC tax software. In... Read more →

Show Me sales tax savings

Missouri kicks off the 2010 sales tax holiday season today with its second Show Me Green Sales Tax Holiday. Show Me State shoppers won't have to pay the state's 4.225 percent sales tax on eligible Energy Star appliances. Some Missouri cities, counties and special taxing jurisdictions also will forgo collection of their sales during the tax holiday, which runs through Sunday, April 25. Qualifying appliances include clothes washers, refrigerators, freezers, dishwashers, water heaters, furnaces, air conditioners and heat pumps. Some appliances, however, will not receive tax-free treatment because they are not Energy Star rated. They are clothes dryers, trash compactors,... Read more →

The tax man waits for no one (except Form 4868 filers). That means that even U.S. leaders had to deal last week with the April 15 filing deadline. The Obamas and Bidens, though, were up to the task. Both the prez, veep and their wives (or more accurately, their accountants and/or tax attorneys) got the First and Second families' returns in on time. Actually, they filed a bit early. And, thanks to Tax Analysts' Tax History Project, we now get a chance to inspect the official presidential and vice-presidential tax paperwork. I'll let you explore the Obama and Biden filings... Read more →

How in the heck did I miss this tax form? It certainly would have helped in my personal filing, since it's designed for me and my fellow "marginally employed" freelancers. I might just have to amend my tax return and take advantage of Schedule BFaS, which was created by graphic designer Sam Potts for the New York Times and which you can see in its entirety here. Do check it out. The "deductions," such as for Twitter, the rent you pay a friend so can live in his or her closet and for the cost of indispensable pajamas you wear... Read more →

John Stossel's tax accountant issue

This year's anti-tax rant winner is Fox News' John Stossel. But it's not just taxing jurisdictions that make Stossel's list. He also has no love for his accountant. The complexities of the tax system, Stossel said last week during an appearance on colleague Bill O'Reilly's show, forces him to pay "several thousand dollars" to Bob, his accountant. If he didn't pay for tax accounting help, Stossel figures that he could be spending that cash on 200 steak dinners, 100 massages, a motorcycle, a cruise. Stossel has a point about the complexities of the tax code. No one anywhere on the... Read more →

NOTE: This tax tip was updated July 4, 2017. I know. You're tired of taxes. Tax Day was yesterday and you don't want to think about the topic again for at least a few days weeks months. But since you did just complete your annual tax task, now is the perfect time to look at what worked and what didn't turn out so well when it came to filing your return. A perennial complaint is that all the effort you put into collecting receipts was for naught. When you added up all your expenses, they came in just short of... Read more →