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February 2011

Charlie Sheen, star of the popular CBS sitcom Two and a Half Men, continues to speak out from what has been described as at-home rehab. Two pieces of advice. First, shut up Charlie. We all have run-ins with our bosses from time to time, but burned bridges, even in today's bottom line, crazy showbiz world where anything goes, can be hard to rebuild. Second, check into a real rehab facility and stick with the program. It will help you clean up your act sooner. Some of the costs might even be tax deductible. Of course, the key word regarding a... Read more →

The Academy Awards will be presented tonight. You know what that means. Swag bags! These bags -- sometimes actual totes, other times just a general reference to the loot -- represent a tradition of giving goodies to people who don't really need it. The giving of gifts to awards show presenters and other participants began in the 1970s and over the years became an increasingly lavish tradition. In 2006 the tax man got involved. That year, the IRS decreed that the goody bags were not actual gifts, but rather compensation and that the recipients would owe taxes on the value... Read more →

Sometimes when folks are desperately seeking tax deductions, they take allowable write-offs a little too far. Case in point, the tax returns of Anietra Y. Hamper. When Hamper was an anchor for morning and noon news programs at WBNS, Channel 10, in Columbus, Ohio, she was required to maintain a specified professional appearance as described in the television station's Women's Wardrobe Guidelines. To comply with the wardrobe requirements of her job, Hamper purchased the appropriate attire and at tax-filing time claimed on her Schedule A unreimbursed employee business expenses of of $20,713, $18,604, $22,602 and $21,759, for 2005, 2006, 2007... Read more →

Sin taxes have always been a popular way to raise money. They tend to adversely affect a relatively small group, which makes the legislators enacting the taxes, and the majority of folks who don't have to pay them, more comfortable. They are usually presented as "it's for everyone's good" campaigns. The catastrophic results of the sin are emphasized and at least part of the new tax money is targeted to programs tied to the specific bad habit. That's the case with cigarettes. When tobacco taxes are hiked, the health dangers to both smokers and breathing bystanders are regularly cited. And... Read more →

News coverage of late is full of stories of state lawmakers confronting taxpayers over ways to close huge budget deficits. Most of the attention in state capitals lately has been on cutting services and, as evidenced by the daily videos of teacher protests in Madison, Wisc., public service payrolls. But maybe taxpayers in every state need to think about paying more taxes. Go ahead. Send you scathing comments and e-mails my way. But hear me out first. The Tax Foundation says that combined state and local tax burdens fell slightly in fiscal year 2009. It's the first drop in the... Read more →

As I mentioned earlier this week, tax filing season is like a big scavenger hunt for tax deductions. Most of the time, when people hear the word "deduction" they associate it with itemizing expenses on Schedule A. But there are more than a dozen so-called above-the-line deductions available directly on Form 1040. Four of them are found on Form 1040A. Technically, these are adjustments to income. You use them to whittle your gross income down to a smaller adjusted gross income level. Each step you take in reducing your overall income means your taxable income, and therefore your tax bill,... Read more →

'Can you hear me now?' Your cell phone's state and local taxes are huge!

Just how much do we love our cell phones? So much so that, in most places across the United State, we're willing to put up with astronomical taxes to stay connected. An analysis of cell phone taxes by the Tax Foundation finds that the levies on the devices are significantly higher than many other common consumer items. And while we tend to complain about the IRS, in this case the tax damage is more local. The average U.S. wireless customer pays taxes and fees of 16.26 percent, says the Tax Foundation, with state-local charges accounting for 11.21 percent of that... Read more →

I file our tax returns (that's my working method pictured below, and yes, the television remote is critical to the process), but the hubby contributes to the annual task. Every year as I slog through our 1040, he periodically stops by to look over my shoulder and chant "Deduct! Deduct! Deduct!" He has a point. Deductions help cut your overall income level to a smaller taxable income amount. And less taxable income typically means less tax owed. Even better than deductions are credits. This type of tax break lets you reduce your actual tax bill dollar for dollar. A few... Read more →

President Obama released his fiscal year 2012 budget earlier this month. For every president, the annual budget is like a kid's long Christmas wish list. It's what an Administration would like for Congress to OK. And just like how Mom and Dad Santa picks and chooses which goodies actually show up under the tree, Congress has its say on every Commander in Chief's myriad budget requests. One Representative immediately denounced any money to hire more IRS "goons." But the annual fiscal exercise is how the system works (or doesn't, depending on your point of view). And it provides insight on... Read more →

Don't be the tax client from hell

I've posted recently about the importance of selecting the type of tax pro that meets your financial and tax-filing needs. I've also talked about ways to check out your tax preparer, regardless of which type your choose, to make sure he or she is competent, ethical and will do the job you expect. But tax filing is a two-way street. Your tax professional depends on your help to file an accurate return and get your the most legitimate tax breaks. So don't be the tax client from hell. It is, after all, your taxes that are being filed, not your... Read more →

Did you sleep in this Saturday morning? If you did (and good for you!), you probably awoke in your house or apartment bedroom, not sacked out in your office. A lot of U.S. Representatives, however, are literally calling their offices home. And a Washington, D.C., political watchdog group wants the practice, which is says violates federal tax law, to stop. "House office buildings are not dorms or frat houses," said Melanie Sloan, Executive Director of Citizens for Responsibility and Ethics (CREW). "If members didn't want to find housing in Washington, they shouldn't have run for Congress in the first place."... Read more →

By now, every taxpayer knows that the IRS offers ways to check on tax refund status. There's the old-fashioned telephone. Just call 1-800-829-1954. For folks who spend most of their time online, offer its popular Where's My Refund? tracking tool. The latest tax money tracking option is the new IRS2Go smartphone app for your iPhone or Android device. But wait, there's more! The IRS has additional refund info that will help e-filers know just when they need to start worrying about delivery of their refunds. It's a nifty chart that details the expected processing time for electronically filed tax... Read more →

As planned, the IRS on Monday, Feb. 14, began accepting tax returns that had been delayed while the agency got its computer system up to speed with tax law changes enacted in December. Now, however, the IRS is asking for one more favor from e-filers. Slow down! The Council for Electronic Revenue Communication Advancement (CERCA), the association founded 15 years ago at IRS request to deal with the electronic filing of tax returns, says that although the IRS is now processing delayed returns -- primarily ones that include Schedule A itemized deductions -- there will be some continued delays in... Read more →

The recent purchase of The Huffington Post by AOL prompted renewed attention to online searching. While much of the world is looking for celebrity-focused material or directions or a movie review (two out of three of those are me!), accountants have much more specific inquiries during tax-filing season. Intuit, the maker of a variety of tax software, took a look last month via its ProLine Tax Research at the most-sought-after tax research terms that accountants were plugging into their computers. The results, compiled between Jan. 20 and Jan. 26, are displayed in the keyword cloud image below. The larger the... Read more →

Just when you think you've seen everything, something like this listing for an out of the ordinary tax filing service shows up: Yep, Steve certainly has the bases covered. If taxes are driving you to drink, then head on over to his Wilmington, Del., liquor store to quench your literal and tax thirsts. Once you fulfill your annual IRS filing duties, reward yourself by picking up a six pack or, depending on just what the final tax bill damage was, something a little stronger. Mary O'Keeffe, on whose blog Bed Buffaloes in Your Tax Code I ran across this cross-discipline... Read more →

If you've been flipping through Obama's fiscal year 2012 budget -- Admit it. You're a tax geek. You've at least given it a glance. -- you've noticed that it's essentially a rehash of prior tax law proposals. Given the make-up of the 112th Congress, the prez's proposals are going to be a hard sell. We saw what happened at the end of 2010 with the Bush-era tax laws. Now Obama is facing more lawmakers, especially in the House, who are hostile to his points of view when it comes to the economy, government programs and taxes. Many of these more... Read more →

It's official. The nation's capital is heartless. OK, I know that Washington, D.C., will never have a reputation for romance, like, say Paris or Venice. But really, guys. You can't take Valentine's Day off? Not only does the IRS choose today to start processing returns that were on hold due to last-minute tax law changes, but the president just released his Fiscal Year 2012 budget. Some of us wanted to skate through Feb. 14, knock off work early and get home sooner for some extra quality time with our significant other. Thanks a lot, D.C. denizens, for throwing a wrench... Read more →

Valentine's Day is tomorrow. This year will be the the 32nd Feb. 14th that the hubby and I have spent together, 30 of those as a married couple. So I got to wondering, especially in light of recent surveys that say marriage is no longer the relationship goal of many folks, how many taxpayers share our status. The latest complete numbers available from the IRS are for tax year 2008. That year, more than 56 million returns were submitted by married couples. The precise number, and the By the Numbers figure this week, is: That number is almost 40 percent... Read more →

Making Congressmen do their own taxes

It's a common refrain every tax season. If Representatives and Senators had to fill outhteir own 1040s, the tax code would be much simpler. The unlikely possibility of those who write tax laws actually dealing with them gets another look in Could Your Senator Conquer the 1040? Former Minnesota governor Tim Pawlenty, a potential Republican presidential candidate, is the latest to call for personal tax accountability from the occupants of Capitol Hill offices. And does Pawlenty do his own taxes? "No way!" Not surprising. Related posts: Rangel resigns Ways and Means post McCain's eight-house property tax problem Obama and McCain... Read more →

Check out your tax preparer

You've decided to hire someone to file your taxes this year. You've looked at your tax pro options and decided which kind of paid preparer fits your needs. Now the next step: Thoroughly vetting the tax professional. Remember, regardless of who fills out your 1040 and sends it on to the IRS, when you sign your tax return, you are legally responsible for everything on it. So it's crucial to hire a tax pro who's not only knowledgeable, but also ethical. Most tax preparers are honest and provide quality service. But as with any consumer transaction, it's up to you,... Read more →