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May 2010

You thought you were through with the IRS. Then that letter showed up. Uh-oh! Audit time. Yep, that's always in the back of every taxpayer's mind. Even when we have simple taxes. Even when we get external assurance, for example from our tax software in the form of the graphic shown below. We really wish that bar was totally to the left. Since it isn't, we can't quite shake that tiny nagging voice that warns the tax examiner might have a question or two about our 1040. The good news is that for most individual filers, the risk of audit... Read more →

The soul of tax wit is brevity

That Shakespeare. He truly was well ahead of his time, penning Polonius' famous phrase celebrating succinctness more than four centuries before Twitter. Now some modern-day tax wits have taken the Bard's words to heart. The TaxProf challenged his fellow legal academicians to come up with six-word stories about tax. My favorite: "Really? Money found in piano income," from Ann Murphy of Gonzaga. Two that shed light on the confusing matter of dependents tied for a close second: "The dog is not a dependent," from Jim Maule of Villanova and "You can't deduct your inner child," from Chris Hoyt of Missouri-Kansas... Read more →

A new take on Robin, romance and taxes

I've always loved the Robin Hood legend. The story of a noble individual standing up for the downtrodden brightens my usually dim perspective of humanity. Add in the tax component -- the official evildoers gave their despicable acts a veneer of authority by characterizing their thievery as a form of government taxation -- and my romantic tax heart leaps! I'm not, however, a fan of Russell Crowe. So I don't plan on going to his latest movie in which he sort of portrays the outlaw of Sherwood Forest. But I couldn't resist reading A.O. Scott's review of Robin Hood in... Read more →

As the April 15 filing deadline neared did you take advantage of the one tax break that still enabled you to cut your prior year's tax bill? I'm talking of course about contributing to a traditional IRA. Lot's of folks do that each filing season so they can claim a deduction for the previous tax year. And lots of folks also take improper advantage of the individual retirement account tax break. The Treasury Inspector General for Tax Administration (TIGTA) says that hundreds of thousands of individuals are making excess contributions to their IRAs while thousands of others aren't taking the... Read more →

Tax proposed on carry-on bag fees

A group of Senators and Representatives want to tax airline carry-on bag fees. But don't worry travelers. This tax isn't aimed at you. Rather, it would be levied against the airlines who collect the added charges. Currently, airlines pay a 7.5-cent federal excise tax for every dollar they collect in fares. No tax, however, is collected on charges for "non-essential" services. Guess what? The Treasury Department has deemed our overhead compartment or under-seat bags are non-essential for air travel. In fact, all luggage, per Treasury, flies tax-free. So airlines are off the tax hook when it comes to any revenue... Read more →

Have you made your Memorial Day long weekend plans? Congress apparently has. It looks like Washington, D.C., lawmakers will be able to enjoy some time off because they will finally pass a measure to extend tax breaks that expired at the end of 2009. The House last December passed a measure keeping the tax breaks on the books beyond 2009, but the Senate didn't act on the bill until this March. Both bodies had slightly different ideas about the extenders and how to pay for them, so they've been working on ways to reconcile their opposing views. One thing Senators... Read more →

Today I have a great reason for being slow to post. I'm pecking at the keyboard one-handed. I fell during my neighborhood walk this morning and broke my left wrist. In the grand scheme of things, that's as good as can be hoped for since I'm right-handed. It was one of those situations that you actually see in your mind as a sort of an out-of-body spectator as well as feel. When I hit a slick spot on the sidewalk that I had thought I had stepped over, I knew immediately I was going down hard. My first thought was... Read more →

As details emerged about Faisal Shahzad, the man who allegedly tried to set off a car bomb on May 1 in Times Square, much was made of the fact that, for a while, he lived a typical American lifestyle. Sadly, that nowadays means that he encountered trouble holding onto his home. Before Shahzad made his inept attack on New York City, he apparently walked away from the mortgage on his Connecticut house. Defaulting on those payments seems like the least of Shahzad's worries right now, but TaxProf points out that the accused bomber also is likely to face a tax... Read more →

Tax breaks for Mom

Happy Mother's Day! A lot of moms, in addition to all their other tasks both at home and in many cases at an outside-the-house job, also are in charge of their families' finances. I know you're not thinking about money or taxes today. Good. You deserve a day off. But when you again focus on all your many responsibilities, here's a collection of tax and financial considerations from the ol' blog, my stories on and other sources. Tax joys of parenthood, Getting full tax credit for your kids, Let the IRS help you look after the kids,... Read more →

Last week we received our annual home appraisal notice from the county. Two days later, we got the first in a series of mailings from folks who want to help us protest that assessment. Some of the offers are quite elaborate, like the mailer from Texas Protax. That company's flier, the cover of which is pictured below, assures us that it s the "largest and most successful property tax representation firm in Central Texas." If we use its services, we'll have access to its "state-of-the-art database" and assistance from staff that have "over 200 years of combined experience" in appealing... Read more →

The good employment news: More people got jobs last month. In fact, in April the U.S. economy added jobs at the fastest pace in four years. The bad employment news: Since more people were looking for jobs last month, the overall unemployment rate inched up a bit to 9.9 percent. Economists had expected it to hold at March's 9.7 percent level. Those numbers from the Bureau of Labor Statistics underscore the value of my Careers Over Coffee group that gets together each month to offer advice and encouragement to each other. It's an offshoot of the Austin chapter of Association... Read more →

A tax break Lady Heather would love

I'm a big fan of charitable donations. I'm also a big fan of cultural events and organizations. And, of course, I am a tax geek have personal and professional interest in how the tax system works. So I love it when all these things come together. Over the years, my financial gifts to various museums have gotten me gift shop discounts, access to special exhibits and, of course, tax deductions. But the gift of Ann Marie Coughlin to a New York City museum puts a whole new twist on the traditional tax and culture connection. Coughlin is a dominatrix who... Read more →

Welcome to the fifth day of the fifth month, or as we Tex-Mex loving, margarita-mad Lone Star Staters know it, just another reason to hoist a few Cinco de Mayo. It's definitely an unofficial holiday here in Texas. And, yes, it's a pretty big celebration elsewhere. The California Avocado Commission says that around 84 million pounds of avocados are expected to be consumed in connection with the holiday this year. Sales of other food associated with Cinco de Mayo have spiked, too. And don't even get me started on margaritas! Really, don't get me started. I have work to do!... Read more →

Don't freak. The IRS website wasn't one of them. But three Treasury sites connected to the U.S. Bureau of Engraving and Printing's home page were hit. Hackers inserted code that redirected visitors to a website in the Ukraine that then launched a variety of Web-based attacks. The Ukrainian Web site has been associated with similar attacks in the past. Those attacks targeted a handful of known software bugs, including flaws in Adobe's Reader software. As of late Monday, security vendor AVG researcher Roger Thompson said all three federal websites were still actively serving malicious software. The best advice is to... Read more →

George Orwell, Pennsylvania tax collector

Hey, Pennsylvanians, if you owe back taxes the state wants to make sure you know that it knows all about you. It's May 2010, but the Keystone State revenue office has been airing this "1984" style television ad promoting its tax amnesty program that runs through June 18. I don't know how many folks the commercial has prompted to participate in the amnesty, but judging from reaction I'm reading online, it has succeeded in creeping people out. Yes, we know that based on our past tax returns, various government-issued licenses we hold and even our credit records, Uncle Sam and... Read more →

How was your Tax Day 2010? I hope all y'all made it through the final filing chaos relatively unscathed. Now it's time to either 1) think about your Oct. 15 responsibilities if you decided to get an extension to file or 2) start working on ways to cut your 2010 tax bill. Actually, even if you still have to finish your 2009 return, you need to also be thinking about your 2010 taxes. To help you take care of whatever tax task(s) you still face,the 70th Carnival of Taxes this first weekday of May takes as its theme the many... Read more →

Estate tax is still dead, but dual options for heirs being considered

If you're of a certain age, that headline probably has you replaying in your mind the continuous Weekend Update report from Saturday Night Live's first season telling all that Spain's Generalissimo Francisco Franco is still dead. The same thing can be said about the estate tax. In case you've forgotten, the federal estate tax was temporarily eliminated on Jan. 1. And folks are beginning to get antsy. The longer the fate of the estate tax remains unknown, the more it becomes a political liability for lawmakers. The possibility of any retroactive reinstatement, however, is causing even more worries. "The move... Read more →

Kentucky Derby bettor, IRS big winners

Viewers of the NBC broadcast of the Kentucky Derby got to see the excitement of Glen Fullerton as Super Saver won the iconic horse race. OK, we were forced to watch the stocky Houstonian jumping up and down since he was part of a Derby-related contest sponsored by Churchill Downs in conjunction with NBC's financial news cable channel CNBC. Or, as Richard Sandomir noted in The Rail: "NBC's first reaction shot after [jockey Calvin] Borel guided Super Saver (pictured at left) to victory? Glenn Fullerton, who won the sweepstakes that let him put down a $100,000 bet on Super Saver.... Read more →

Our neighborhood is a typical sleepy suburban community, especially on weekends … except for one Saturday each May and October. On those two days, traffic picks up considerably as people drive the streets to check out who's selling what in the community-wide garage sale. The hubby and I don't participate, either as buyers or sellers, for several reasons. Yes, we have stuff we could get rid of, but we don't necessarily agree on the same items. Things I want to sell, the hubby wants to keep and vice versa. OK, it's usually vice versa, since I'm a bit of a... Read more →