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June 2010

With the first round of the World Cup winding down, I thought you sports nuts would like a financial reason to justify your viewing, especially Western Hemisphere fans who have to sneak the programming in during work hours. The Trading Goddess has just what we're looking for: A World Cup stock portfolio. It lists several publicly traded companies that are either official World Cup partners or sponsors and which could be used to build a soccer (or for folks residing outside the U.S., football) portfolio. Those immediately recognizable to me include such such globally known companies as Adidas, Coca Cola,... Read more →

How are you feeling? That's a question that can apply to the well-being of not just you, but also your workplace medical flexible spending account (FSA). Melissa takes care of her FSA (and herself, too, I'm sure!) by reviewing her spending account now so she can begin planning how to use the funds so that she doesn't lose them. Her advice is our second Midyear Tax Moves feature. FSAs are a great employer-provided benefit. The money comes out of your paycheck automatically and goes into the spending account before you a have a chance to miss it. Even better, the... Read more →

Are BP payments taxable income?

That's a question folks on the Gulf Coast who've already received checks from BP or expect to are asking. So what's the answer? Yes. Probably. But maybe not. We're waiting to find out. Depending on who's asked, those are the answers you get. One tax attorney, however, says the tax situation, unlike the oil-fouled waters off the Gulf Coast, is crystal clear. "This is not a difficult call," says Tax Lawyer's Blog. "The tax code has long considered payments made to individuals in the form of compensation for lost wages or as a substitute for what would have otherwise been... Read more →

Apparently Gail Posner didn't. The daughter of the late corporate raider Victor Posner passed away in March, leaving millions to her three dogs and hired help. Her son, however, received only a nominal (compared to the chihuahuas) inheritance. Now he's trying to overturn the will. Again, I must ask: Didn't the Leona Helmsley situation -- millions to Trouble, cutting some relatives out of her will -- teach us (or rather, Gail Posner) anything? I understand loving your pets. They are indeed furry family members. And I agree that often they contribute more to some people's lives than do human relatives.... Read more →

Midyear tax tip #1: Welcome summer with energy-related tax breaks

How's your first day of Summer 2010 going? If this longest day of the year is already too sweltering, here's a tax tip that could make it more comfortable, from both temperature and financial perspectives. Connie, our first contestant in the ol' blog's Midyear Tax Moves contest, reminds us that the $1,500 tax credit for home-energy improvements is still available for this tax year. It could be extended -- you never know with Congress -- but just in case, if your A/C system is on its last legs and just not doing the job efficiently, let Uncle Sam help you... Read more →

Happy Father's Day 2010

Being a father has changed a lot since the days my dad was expected mainly to just bring home a paycheck. All the day-to-day parenting duties back then were left to mom, who occasionally had to utter that ominous phrase, "Wait until your dad gets home." Of course, I knew that was an idle threat. Dad was really a softy. And although the times were different, he contributed in his own valuable (and quiet) way to our upbringing. Dad's no longer around for me to send a special card each third Sunday in June, but I hope he knows he's... Read more →

That headline is a good general rule for all tax situations. And the U.S. Tax Court reinforced that requirement last week in a ruling against a taxpayer who claimed charitable deductions but didn't have the proper substantiation. The summary judgment in the case of Edmund Douglas Roberts v. Commissioner meant that Roberts is liable for more than 10 grand in additional tax produced by the loss of those deductions, along with some levies for late fling. The problem was with Robert's 2005 tax return's Schedule A, where he claimed $200 in cash that he said he donated to panhandlers and... Read more →

Today's episode of Tax Extenders Folly

I know, I'm diving into the deep end of the tax wonk pool with my repeated posts about the tax extenders legislation. But there are a few of us out there (here?), so welcome to today's installment of what is becoming a tax version of those serialized tales of yore. When last we left our plucky band of tax writers, Senate Finance Committee Chair Max Baucus (D-Mont.) was trying to convince his colleagues in the full legislative body that his second, slimmed down version of the American Jobs and Closing Tax Loopholes Act of 2010, officially known as H.R. 4213,... Read more →

IRS not cashing checks fast enough

About the same time Uncle Sam was announcing that next spring he was going all electronic when it comes to federal benefits, a watchdog agency was chastising the IRS for not cashing tax payment checks more quickly. IRS slowness in processing paper payments is costing the Treasury hundreds of thousands of dollars in interest earnings, says the Treasury Inspector General for Tax Administration (TIGTA). As you recall, the IRS was exempted from the upcoming total e-payment edict, meaning tax refunds will continue (at least for now) to be issued in the old-fashioned paper form to taxpayers who prefer that method.... Read more →

Limited small biz capital gains tax break

Y'all saw the headline, right? On Tuesday, the House approved a tax incentives measure for small businesses under which capital gains taxes would be eliminated on some company investments. Pay close attention to that word "some." First, total exclusion from capital gains taxes would apply to certain small business stock purchased between March 15, 2010, and Jan. 1, 2012. And in addition to the specific window, to qualify for the exclusion the stock must be held for at least five years. But here's the biggest limitation. Because of their structure, most small businesses won't qualify for the tax break. "The... Read more →

Tax extenders Senate saga continues

In an effort to get enough votes to move the tax extenders legislation, Senate Finance Committee Chair Max Baucus (D-Mont.) has revised the bill's contentious carried interest and S corp provisions. And as a sop to housing industry lobbyists, home purchasers who qualify for the first-time homebuyer tax credit have more time to seal the deal. Baucus was forced to make more changes to H.R. 4213, the American Jobs and Closing Tax Loopholes Act of 2010, after the substitute he introduced last week wasn't able to overcome a procedural point of order in the Senate. That is, most of his... Read more →

The Coast Guard can now spend more than $100 million from a federal trust fund if that's what it takes to pay cleanup costs related to the BP Deepwater Horizon oil spill. The spending limit was removed as part of a an emergency measure signed into law yesterday by the prez. The Oil Spill Liability Trust Fund, from which the cleanup money comes, is paid for by an 8 cents per gallon tax on oil companies. But when it came to increasing taxes on Big Oil, there weren't enough votes yesterday on Capitol Hill. A measure offered by Vermont Independent... Read more →

On the heels of some Texans' qualms (OK, anger) about tax breaks for a satirical immigration-themed movie, comes news that other states also are more closely reviewing movies eligible for government money. Michigan has decided not to provide tax money for the horror film The Woman, a sequel to the icky Offspring. According to the New York Times, the state's film commissioner,Janet Lockwood, sent the director a note informing him that the film's extreme depictions of "realistic cannibalism; the gruesome and graphically violent depictions described in the screenplay; and the explicit nature of the script" were the main reasons for... Read more →

Actually, it's New Yorker desk diary time, in which you can jot down important tax dates, as well as enjoy the great cartoons. An online friend I met years ago through blogging is now with Condé Nast, publisher of the magazine (and calendars). He dropped me note asking, what with 2010 about half over, did I have any ideas on distributing some of this year's calendars? Being a big fan of the calendars -- Santa has brought the hubby and me one of our own monogrammed diaries for as long as I can remember -- and a tax geek, I... Read more →

Some of my neighbors have U.S. (and Texas) flags flying year round, but for the rest of the country that's not so banner happy, today offers the perfect reason to display the Stars and Stripes. Yep, it's Flag Day again. Since I've been blogging, I've have a special Flag Day post. It's not because I'm not an overt nationalist; I'm not. And I usually talk a bit about how many states exempt the purchase of U.S. and their state flags from sales taxes. But June 14 also is special to me because it was my late brother's birthday. So on... Read more →

If you've been a holdout when it comes to getting government payments electronically, you're out of luck. Uncle Sam is going to force you into direct deposit The Obama Administration is expected to announce today that soon all government payments to consumers will be made electronically. If you have a bank account, the your federal benefits such as Social Security, unemployment insurance, veterans benefits and railroad retirement will go there. If you don't have an account at a financial institution, Uncle Sam will issue your benefits via plastic using the the Treasury Department's Direct Express Debit MasterCard program. The feds... Read more →

If your summer vacation includes catching up on your reading and you're a tax geek, here are some tax books to take with you. I must admit I haven't read most of them. I'm taking the word of Laura Saunders in her recent Wall Street Journal article."Believe it or not, two recent books manage to present the history of taxation in ways that not only fascinate but amuse," writes Saunders. She highly recommends The Sex of a Hippopotamus (Twinset Inc.) by Atlanta CPA Jay Starkman. Calling it "the only readable book about taxes that this longtime tax reporter has ever... Read more →

Love 'em or hate 'em, it seems that state tax breaks for the film and television industry are here to stay. Unless, of course, Quentin Tarantino and Robert Rodriguez make a controversial movie in your state. That's what's happening here in Texas. Tarantino is producer and Rodriguez director of Machete, a view of politics and immigration through the skewed lens of the guys who brought us From Dusk to Dawn and Grindhouse. Born from one of the fake film trailers in Grindhouse, Machete is the story of a renegade Mexican federale who flees to Texas and is hired to assassinate... Read more →

Tax policy and the American homeownership dream

Joe Nocera in his Wake-Up Time for a Dream column today looks at whether the "financial crisis might well have been avoided if we as a culture hadn’t invested so much political and psychological capital in the idea of owning a home." The question isn't new (I blogged about the madness of the mortgage interest deduction back in 2006), but it's worth reconsidering since this past week some lawmakers again began pushing for legislation -- and tax benefits -- that ostensibly make homeownership possible for more people. Nocera's New York Times piece looks at the political history of the American... Read more →

It's true, politics does indeed make for strange bedfellows, or in this case, tanning-bedfellows. The Jersey Shore diva Snooki, aka Nicole Polizzi, and erstwhile GOP presidential candidate Sen. John McCain apparently are new social media BFFs, bonded by their common dislike of the 10 percent tax on UV tanning bed services. The bronzing bed levy is part of the funding for the new health care reform law. Collection of the tax kicks in July 1. In a preview for the next installment her MTV show, Snooki notes that she doesn't use tanning beds anymore because "Obama put a 10 percent... Read more →