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August 2010

July 2010

Debunking 5 Bush tax cut myths

Sorry to be a broken record on the soon-to-expire tax cuts that we got in 2001 and 2003 when Dubya was in office, but lots of folks seem fixated on the upcoming Dec. 31, 2010, deadline of late. The most recent piece I've seen is from William G. Gale, senior fellow at the Brookings Institution and co-director of the Urban-Brookings Tax Policy Center. Gale debunks five myths about the Bush tax cuts in an article for the Washington Post. I'll let you go there for details, but as a quick preview, here are the myths themselves: Extending the tax cuts... Read more →

Effort to repeal 1099 reporting fails

House Democrats today tried to repeal the new Form 1099 requirements set to go into effect in 2012 as part of the health care reform law. Republicans, however, objected to the way the bill was introduced and how the majority party planned to pay for the change. The provision in question would require businesses to file a Form 1099 with the IRS to for each supplier or service provider to which they make payments of more than $600 in a single year. While Republicans have introduced bills in both the House and Senate to repeal the new 1099 filings, Democrats... Read more →

Colbert: Defusing the coming 'tax bomb'

Congress remains stuck in political gridlock. Senate Republicans yesterday blocked a final vote on a small business jobs bill. The extenders legislation has been going nowhere fast for months. The estate tax is still dead. And it seems like Congress just can't kill the alternative minimum tax. And every day that passes means we're closer to the sunsetting of Dubya's tax laws. Unless Congress acts, Dec. 31, 2010, will be the last day of the 10 percent lowest tax bracket, the 35 percent instead of 39.6 percent top tax bracket, the 0 percent and 15 percent long-term capital gains and... Read more →

Just a quick reminder that Mississippi kicks off the 2010 back-to-school tax holiday season today. The Magnolia State's no-tax shopping on certain clothing and footwear items started at 12:01 Friday, July 30, and runs until midnight Saturday, July 31. Fifteen other states will be holding their back-to-school tax holidays in August, with most starting next Friday, Aug. 6. While you can save some money at these gimmicks events, you'll fare better fiscally if you go into your shopping trip with a plan. Frugal Dad turns to his frugal daughter for a guide to back-to-school shopping. Studenomics also looks at how... Read more →

Online gambling bill gets initial OK

Attention all gamblers. Uncle Sam thinks you could help him cover some of his operational costs. The House Financial Services Committee yesterday approved a bill that would effectively legalize some types of online betting. But bettors shouldn't get too excited. The bill is specifically limited to online poker and other nonsports betting. And remember, it would also make it easier for the IRS to get its cut of your winnings. Supporters of the legislation say that could mean as much as $42 billion in additional federal tax revenue over 10 years. The panel's vote to approve H.R. 2267, the Internet... Read more →

UPDATE 8/4: Details on the upcoming Bay State tax holiday I'm seeing a lot of folks clicking on prior year blog posts about a sales tax holiday in Massachusetts, so I just wanted to make sure all y'all have the latest information. Right now, early afternoon on July 29, the Bay State does not have a sales tax holiday officially scheduled for this year. However, hopes are high among election-conscious lawmakers and retailers seeking anything to attract more customers that the Massachusetts Senate soon will OK a 2010 tax-free event. The state House already passed a measure calling for a... Read more →

Lawmakers seek repeal of new 1099 forms

Shortly after health care reform became law in March, a small ripple showed up in the vast tax-law ocean. Today it has become, if not a tsunami, as least a decent sized wave of opposition to new Form 1099 reporting requirements that businesses will soon face. Starting in 2012, part of the Patient Protection and Affordable Care Act (Public Law 111-148) will force companies to file a Form 1099 for payments for goods or services that total more than $600 annually to a single business. The current law only applies to the purchase of services, not the purchase of goods.... Read more →

Politicians always say they understand the worries and frustrations of rank-and-file working folk, but as Forbes notes, poor men don't become president. The magazine, whose current wealthy head honcho tried a couple of times to win the Republican nomination for president, has compiled a list of the 10 richest U.S. presidents. George Washington was the big winner, thanks, says Forbes, to "the largely tax-free environment that characterized colonial America." That, along with Washington's shrewd business sense, a marriage to a well-to-do widow and several inheritances place the Father of Our Country first in wealth, too. Rounding out the rest of... Read more →

Kerry to pay "sails" tax on yacht

OK, Sen. John Kerry is tired of all the yacht tax questions. Kerry announced this afternoon that he's paying all Massachusetts taxes due on his new $7 million yacht even though it's docked in Rhode Island, where he bought it and which doesn't collect sales tax on luxury vessels. Rough calculations mean that Kerry will hand over to Bay State tax officials $437,500 in state use taxes, the companion to state sales taxes when an item is purchased in one jurisdiction but brought into another for regular use. Massachusetts' senior U.S. Senator also will owe another $70,000 thanks to the... Read more →

If Mass. asks, Kerry will pay yacht tax

In the wake of all the negative publicity surrounding potential state sales tax on his new yacht, Sen. John Kerry (D-Mass.) says he'll pay Massachusetts taxes on the vessel … if the state asks. To give the one-time presidential candidate a break, he's in the clear right now when it comes to Massachusetts sales and use tax on his $7 million sloop. The boat was built in Rhode Island and currently is berthed there. From a tax standpoint, that's great for Kerry, since in 1993 the Ocean State eliminated its sales tax on yachts. But if Kerry sails the Isabel... Read more →

Sales tax holidays 2010

It seems like only yesterday that parents were longing for the time that their kids would be back in class. Good news, Mom and Dad! That day is almost here. And to help you get ready, 16 states are holding back-to-school sales tax holidays. Most of the holidays, during which certain purchases are exempt from state and sometimes local sales tax collection, are in early August. Mississippi, however, couldn't wait. The Magnolia State's sales tax holiday is this coming Friday and Saturday, July 30 and 31. A few other tax holidays -- in Connecticut, Florida, Illinois, Maryland and Texas --... Read more →

Torched home not allowable deduction

A federal court in Ohio has extinguished the charitable tax deduction hopes of an Ohio couple who donated their home to their local fire department so it could be burned as part of a training exercise. The problem in this case was not the controlled arson issue that caught everyone's fancy, but rather basic tax law requirements in such pricey donations. The court's finding means that James and Lori Hendrix of Upper Arlington, Ohio, now owe the IRS an additional $100,590 in tax, plus interest and penalties. The problem with the donation the Hendrixes made back in 2004 was, according... Read more →

Homesteading to increase tax base

In the face of shrinking revenue, some towns are hoping that a page from the past can help ensure their futures. Almost a century and a half ago, Beatrice, Neb., helped launch the country's original Homestead Act effort, whose goal was to provide free or low-cost land to settle the West. Today, Beatrice officials are hoping that by handing out city land, they can ensure future property tax revenues. I don't have much faith in such a plan. Perhaps I'm just too cynical, but I fear that folks who would jump at the offer would be too fixated on the... Read more →

Need a job? Contact the IRS for work
as well as job-hunting tax help

I know it's not everybody's ideal place to work, but at least the IRS is hiring. And, hey, the agency got better marks than Facebook on a recent customer satisfaction survey! Uncle Sam hires new tax office employees throughout the year for various positions. Right now the IRS says it has open slots for revenue agents, revenue officers, criminal investigation special agents, financial analysts and economists. If you're interested, check out the IRS Careers website. The video below has info on being a Criminal Investigation (CI) Division special agent. I can tell you that at IRS Forums, the CI exhibit... Read more →

Sen. John Kerry avoids "sails" tax

Why isn't Massachusetts Sen. John Kerry's 76-foot sloop tied up at a Bay State dock? The senator's office says it's because Kerry bought the sailboat in Rhode Island and it will be based at the Newport Shipyard for long-term maintenance, upkeep and charter purposes. Some are wondering, however, if the fact that the Ocean State has no sales tax was the motivation. Rhode Island repealed its Boat Sales and Use Tax in 1993, reports the Boston Herald, "making the tiny state to the south [of Massachusetts] a haven -- like the Cayman Islands, Bermuda and Nassau -- for tax-skirting luxury... Read more →

Hot new housing trend: Renting

NPR's Morning Edition had an interesting story yesterday about the hot new personal real estate trend: renting instead of buying. There are several reasons for the housing change of heart. Government data show that with so many homes and apartments on the market, rents are relatively low. Some former homeowners who got stuck with house that fell in value are finding renting more to their liking nowadays. And even Uncle Sam, which via the tax code and other programs has been a advocate, partner, enabler -- you pick or add your own term -- of the housing industry is starting... Read more →

Here's something fun to do this weekend. Figure out just what your tax bill will be next year with or without the current tax laws. The Tax Foundation has created a calculator that will let you compare your 2011 federal income tax liabilities under three possible tax collection scenarios. At you can look at your potential IRS bill if: All Dubya's tax cuts expire completely at the end of this year, Those current tax laws are all extended into 2011 or made permanent, and Obama's budget, which includes a combination of some tax laws expiring and other continuing, is... Read more →

Tips are part of the restaurant business. But your favorite eatery is not the only place where satisfied customers hand over a few extra dollars for good service. Tips, and their tax ramifications, are common in several industries. Aside from tipping the taxi driver when he drops you off at the hair salon, you do give your stylist a gratuity for that nice cut, don't you? Tips also are regularly handed to airport skycaps, hotel bellhops, delivery people, valet parking attendants, bartenders, pet groomers, gym attendants, hotel housekeeping staff, casino workers, golf caddies, manicurists, masseuses and ministers for their services... Read more →

Facebook: As fun as doing your taxes

It's no secret that although I use it, I'm not big fan of the social media site that I like to call FaceySpace. Its goofy games and contrived intimacy of "friends" I don't know tend to annoy me. Well, it now appears that I have company in my antipathy toward Facebook. The American Customer Satisfaction Index (ACSI) E-Business Report, produced in partnership with ForeSee Results, found that on a 100-point scale, Facebook got just 64. That ranking puts Facebook in the bottom 5 percent of all measured private sector companies. It's in the same range as airlines and cable companies,... Read more →

Senate rejects permanent estate tax death

Most Senators want to resurrect the estate tax. They made it official yesterday by soundly rejecting, 59 to 39, a proposal to permanently abolish the estate tax. Sen. Jim DeMint (R-S.C.) tried to kill the estate tax once and for all by attaching his proposal to the unemployment benefits extension that the Senate finally passed on Wednesday. DeMint argued that his proposal was "not a tax cut" but simply a continuation of current policy since Congress let the tax lapse this year. He got two Democrats to support him: Blanche L. Lincoln of Arkansas and Ben Nelson of Nebraska. However,... Read more →