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July 2010

Are you ready for a Roth?

If you're anything like me, summer brings back fond memories of three months of fun. No classes or homework; just long days of doing exactly what you wanted. OK, doing what Mom and Dad said you could do. Those memories are probably why every summer I think about retirement. Nowadays, the only way to get a retirement anywhere near the security of your carefree summer days of yore is to sock away cash now, either in your workplace 401(k) or similar plan, as well as in an individual retirement account. This year, because the $100,000 income limit no longer prevents... Read more →

IRS wants to limit whistleblower rewards

Hopes were high when in 2007 the IRS opened its new whistleblower office. New, more generous incentives for tips that help nab tax cheats were announced. A new director for the office was installed. Now, however, it seems that the IRS is trying to get out of paying folks who have info on tax evaders. Changes to the whistleblower provisions in the Internal Revenue Manual say that informants aren't entitled to any cash rewards unless the tips lead to payments to the IRS. That means that whistleblower information that simply halts an improper refund or reduces a too-large credit --... Read more →

A message is showing up in e-mail boxes alerting folks that the recently-enacted health care reform law means they'll soon be paying income tax on the value of the health insurance they get through their jobs. One big problem, though. The e-mail is wrong. I haven't personally seen the e-mail. Either I'm not part of the sender's target audience (hallelujah!) or my spam filter works a lot better than I realized (although you couldn't prove it by the other junk I do get). But Michael Rozbruch, who blogs at Tax Resolution University, got the false warning and he reprinted it... Read more →

State-by-state pain index

How much pain does your state inflict upon you? As states have suffered during the recession, the answer for most folks is "a whole lot," either through increased taxes to try to plug budget gaps or reduce services that can no longer be paid for because of declining revenues. Rick Newman at U.S. News & World Report wasn't content with such a vague answer. Using data from the National Association of State Budget Officers, he combined said tax increases and spending cuts in each state since 2009 and came up with each location's pain index. A state surprise at #1:... Read more →

Since it's the weekend, how about some more news on another actor who had a run-in with the IRS? On Friday, the 11th Circuit Court of Appeals in Atlanta determined Wesley Snipes' three-year sentence to federal prison was proper. Snipes was acquitted of the more serious federal tax fraud and conspiracy charges, but found guilty in 2008 of failing to file tax returns. The IRS said that the action film star's failure to file had cheated Uncle Sam out of around $17 million in taxes. Snipes' attorneys had appealed his sentence, arguing that it was "unreasonable." The 36 months of... Read more →

Trouble, tax trouble

That headline could be the operative phrase for the actor that many, including me, consider the best cinematic James Bond. Media worldwide report that Sir Sean Connery is being investigated by Spanish authorities for alleged tax fraud involving the sale of two large tracts of land. A property firm linked to the 79-year-old actor allegedly failed to pay around $2 million (1.6 million euros) in taxes on land near Malaga, Spain, that Connery and his wife, Micheline Roquebrune, sold in 1999. This is the second property sale problem that Connery and his wife have faced this year. In May, Spanish... Read more →

Time to hike the federal gas tax?

Now that it looks like BP might be actually making progress on shutting down the oil pouring from the damaged Deepwater Horizon rig, we can't let our cautious optimism get the better of us. Yes, the cap is on and the pressure readings are, so far, encouraging. The relief wells to permanently plug the oil source are being drilled. Or work on the additional wells will resume as soon as engineers are confident that the cap will hold while the ancillary drilling is done. But there's still a whole lot left to do as far as cleaning up the worst... Read more →

While some of their colleagues were pondering extension of tax cuts set to expire on Dec. 31, a couple of Senators were trying to rally support for their effort to revive a tax that died last December. In one of Capitol Hill's rare bipartisan efforts, Senators Blanche Lincoln (D-Ark.) and Jon Kyl (R-Ariz.) this week introduced a bill to permanently reform the federal estate tax. The measure also has a nifty political appeal. It provides lawmakers a chance to make everyone -- OK, all voters, but probably not the Treasury -- happy by giving estates the option of using this... Read more →

Tax cuts or total tax reform?

The Senate Finance Committee's hearing yesterday ostensibly was about whether and how to extend the 2001 and 2003 tax cuts that are expiring at the end of this year. But as the testimony was presented and the Q&A followed, there was a sense that many folks see the impending tax laws deadline as a great opportunity to tackle a total tax system overhaul. Comprehensive tax reform is the political Holy Grail. Everyone is searching for a tax system that's fair, simple and raises enough money to pay for programs that the citizenry wants without making them feel like they're over... Read more →

So Bristol and Levi are finally getting married. Yes, that Bristol and Levi, as in Palin and Johnston. The same attractive, young and ostensibly engaged couple we met during the Republican National Convention two years ago when Bristol's mom, then Alaska Gov. Sarah Palin, was introduced (along with her family) to the nation. It's so wonderful to see true love prevail. Or true media savvy if you're a cynic, since Bristol and Levi's latest engagement was announced not in the Wasilla, Alaska, newspaper but Us Weekly magazine's latest cover story. But honestly, I'm trying to suspend my more skeptical side.... Read more →

IRS announces oil spill meeting sites

If you've been affected by the Gulf Coast oil spill, the IRS has finalized meeting places where you can go this Saturday, July 17, for face-to-face help with your tax issues. IRS representatives will be at following locations from 9 a.m. to 2 p.m. Central Time: 1110 Montlimar Drive, Mobile, Ala. 651-F West 14th St., Panama City, Fla. 7180 9th Ave. North, Pensacola, Fla. 2600 Citiplace Centre, Baton Rouge, La. 423 Lafayette St., Houma, La. 1555 Poydras Street, New Orleans, La. 11309 Old Highway 49, Gulfport, Miss. IRS staff will answer questions about the tax treatment of BP claims payments,... Read more →

The Boss' estate tax bonanza

The latest hit to the U.S. Treasury because there's no federal estate tax comes with the death yesterday of the New York Yankees' owner. From a tax perspective, George Steinbrenner's passing was impeccable. Or, as the Associated Press put it: "By dying in 2010, the billionaire and long-time New York Yankees owner's wealth avoids the federal estate tax, likely saving his heirs enough money to field an entire team of Alex Rodriguezes." With an estimated value of $1.1 billion, the Steinbrenner estate would have faced, depending on how the estate was structured, federal taxes of almost $500 million if The... Read more →

Finally! Some movement on the myriad tax cuts set to expire at the end of this year. The Senate Finance Committee is holding a hearing on The Future of Individual Tax Rates: Effects on Economic Growth and Distribution. In preparation for the hearing, the Joint Committee on Taxation prepared an analysis of the expiring tax provisions. The document also examines the president's fiscal year 2011 budget proposals related to the tax provisions. The Joint Committee's calculations indicate that continuation of the tax cuts would cost $2.5 trillion from 2010 to 2020. Scheduled witnesses are: Carol Markman, CPA with Feldman, Meinberg... Read more →

Which tax do you hate the most? And no, "all of them" is not an option. According to a compilation of various public opinion polls by the American Enterprise Institute (AEI), we Americans really, really detest getting our annual property tax bills. "Surveys suggest that the local property tax is now seen as more onerous than the federal income tax," reports AEI in Public Opinion on Taxes. "Thirty-six percent in February-March 2003 told Kaiser/NPR/Harvard that local property tax was the tax they disliked the most, followed by 29 percent who chose the income tax. Gallup shows a substantial jump since... Read more →

Look out for these taxes while vacationing

Spontaneous getaways definitely are appealing, but for most of us, vacations take planning. Not only do we have to reach a family consensus on where to go and when to take the trip, we also have to make financial arrangements. If you're in the midst of summer break budgeting, you'd better factor in a few more dollars for taxes. This year, added car rental levies are the most daunting expenses, according to Deborah Weinstein in Travel tax traps to avoid this summer. Weinstein cites research by the National Business Travel Association that shows the national average tax rate on car... Read more →

Lights, cameras, state tax credits!

Academy Award nominee John C. Reilly was asked recently about his experiences in Cedar Rapids, Iowa, for filming of the movie of the same name. But there was one problem. The film wasn't made there. "I was excited to go. I was doing research, I was checking out the city," Reilly said in the June 28 issue of New York magazine. "And then Iowa abolished their tax credit for movies and we had to shoot in Ann Arbor." Well, the Hawkeye State had a good reason for closing down its movie production tax break. The Iowa film credit program was... Read more →

Sales tax collection on online purchases: legislation to ease it, lawsuit to stop it

Sales taxes on online purchases have always been problematic. For years, states have been working to get a critical mass of members in the Streamlined Sales and Use Tax initiative (SSTI). Basically, this multistate group wants to create a nationwide system that makes it easier for the more than 7,500 taxing jurisdictions across the United States to collect their appropriate sales taxes on products purchased from "remote sellers," or what you and I call Internet and catalog vendors. While the SSTI is a state-driven effort, it still needs federal intervention. That's because the 1992 Supreme Court decision that ruled on... Read more →

I'm a bit late blogging today because I finally got around to potting some herbs for our patio. The hubby is the gardener in the family, but I make a nominal contribution to our backyard flora by tending to a few plants that also offer culinary contributions. Our colder-than-normal winter took its toll on some of them, so I replaced our frozen-out basil with the plants shown there at the left. Actually, the pot now holds two types of basil, the standard sweet variety and a variegated type that the herb seller at the Barton Springs Farmers' Market told me... Read more →

IRS opens toll-free oil spill hotline

If you have tax issues related to the Deepwater Horizon oil spill, you now can call the IRS directly for answers at 866-562-5227. The special toll-free telephone line will be open weekdays from 7 a.m. to 10 p.m. local time. You can ask specific oil spill related tax questions, as well as discuss your options if you're having difficulty filing or paying your taxes because of the disaster. In certain cases, says the IRS, collection and examination actions might be suspended. The key here is to let the IRS know and ask for the special help. Remember, though, that even... Read more →

Did taxes affect LeBron's decision?

Sorry, Cavaliers, fans that the LeBronathon didn't turn out like y'all had hoped. I don't follow hoops, but I am a fan of other sports so I know how awful LeBron James' decision to ditch his hometown Cleveland team for the Miami Heat feels right now. But don't take it personally. Professional sports is a business, a big business. And sentiment, I have learned the hard way over the years, has no real place in any major league. What does come into play, however, is the potential taxes due on all those high-dollar contracts. That's why Kyle Gillis of the... Read more →