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April 2011

As states struggle to come up with as much money as possible to balance their budgets, many are turning to hikes in existing taxes, noticeably tobacco levies. The Mackinac Center for Public Policy reports that from 2007 to 2010, 27 states raised their cigarette taxes. And that has led to an increase in organized cigarette smuggling. According to Mackinac, the five smuggling destination states with the highest cigarette smuggling rates last year were: Arizona, 51.8 percent of the state's total consumption New York, 47.5 percent Rhode Island, 40.5 percent New Mexico, 37.2 percent and California, 36.3 percent. Not only has... Read more →

I hear from a lot of folks wanting to know how they can turn in someone they're convinced is cheating on their taxes. Some of these people are looking for a possible reward for ratting out a tax cheat. That system has improved over the years, but it still takes a while and requires the actual collection of substantial unpaid taxes before the IRS Whistleblower Office says thanks to tax tattletales with cash. Others are just irked that someone is getting away with not paying their fair tax share and simply want to ensure that the scofflaws are caught. I'm... Read more →

Marriage, taxes and the royal wedding costs of William & Kate

Did you take a nap this afternoon so you can get up at o'dark thirty and watch Prince William and soon-to-be Princess Kate Middleton tie the knot? The hubby is laughing (well, it's really more like a sad grin while shaking his head), but I'm going to set the alarm and watch the royal wedding. I watched Charles' and Diana's nuptials, although that was because I worked the 3 p.m. to midnight shift at the newspaper, then helped colleagues close down a bar or two and was already up when the wedding march started. So I might as well take... Read more →

Most people view tax refund money as a forced savings account

Most people get tax refunds. Despite conventional wisdom and the continued advice of tax professionals, most apparently plan it that way. I look at this decade-long trend in my latest Bankrate Taxes Blog post, Reasons for a refund glut. Do you intentionally have too much in payroll taxes withheld so you'll get a big check from the IRS each year? I'd love to hear why, at both the Bankrate post and here. Related posts: Tax refund spending tips, withholding effects $3,003: By the Numbers average 2010 tax refund amount Talking Taxes: Adjusting withholding Give yourself a tax-related raise Withholding lessons... Read more →

As I write early this morning, a massive storm system is pushing eastward. Earlier today, it spawned deadly tornadoes in Alabama and Georgia. The most devastating was the giant super-cell twister that plowed through Tuscaloosa, Ala. I have friends in Tuscaloosa. I've heard from one, who happens to be in California on business. He reported his neighborhood was spared. But I'm still waiting for word from the others who live in or near that central Alabama city. And I have friends in the Washington, D.C., area, which also is in the storm's path, so it's going to be a long... Read more →

Have you missed me giving you the finger? Hey! Don't even go there. I'm talking about the friendly index finger to the right directing you to a helpful tax tip. Yes, during the recent high tax-filing season that same hand and digit pointed to the Daily Tax Tip that appeared at the top of the ol' blog's right column. That feature began Jan. 6 and wrapped up with a post-April 18 bonus tip for late filers. Now, as promised (or threatened depending your your attitude about taxes), the tip is back. This time, though, it's a Weekly Tax Tip. From... Read more →

Do you like where you live? Did you choose your location because of its tax system? Would a change in how you're taxed at the state and/or local level be enough to make you call a moving company? Anti-tax politicians tend to argue that their jurisdictions need to keep taxes low or risk losing all their rich residents. New Jersey Gov. Chris Christie is the latest lawmaker to sound off, or at least get a lot of attention, on this topic. The Garden State, in fact, opted to offer its richer residents some tax relief. But are the relocation fears... Read more →

The Defense of Marriage Act, the 1996 law under which the federal government -- including the IRS in processing tax returns -- only recognizes as legal marriages those between a man and a woman, has produced a couple of splits of its own. King & Spalding, the law firm hired by Republicans to defend the federal government's ban on recognizing same-sex marriages, withdrew from the case Monday. That decision then prompted the lead counsel for the case, Paul D. Clement, to resign from the firm. Clement, who also served as solicitor general under President George W. Bush, said he will... Read more →

Regular readers know that in our precious free time, the hubby and I go birding. We started following birds recreationally when we lived in Maryland, and most of our vacations are a combination of attending some sporting event and visiting a bird habitat. The Midatlantic was a great training ground, with the mountains to the west, the spectacular Chesapeake Bay and Maryland's great Eastern Shore to the east and a nice variety of birding spots in between and within easy driving distance. I'm talking about you, Hawk Mountain, Pa. While Maryland residents, we also took frequent vacations to Florida for... Read more →

While doing some seemingly endless post-Tax Day clean-up, I realized I never posted info on the Executive Branch occupants' tax returns. So here's the deal. The Obamas were much poorer in 2010 than in 2009. Of course, poor is a relative term. Barack and Michelle O reported $1.7 million in adjusted gross income last year, down about 69 percent from the previous year's total of $5.5 million. 2010 also was the couple's lowest-earning year since 2006. So what was the IRS damage on 2010's smaller AGI? $453,770 in federal taxes. But with estimated tax payments and withholding, the First Couple... Read more →

Most of America's taxpayers finished up their federal tax returns on April 18. But a Washington, D.C., tax think tank says that for tax year 2010 almost half of us don't owe the federal government any income taxes. Around 45 percent of U.S. households, or about 69 million, will end up in this envious tax position, say Tax Policy Center researchers. Some of those folks will even get money back from Uncle Sam. Percentage points wise, that's slightly fewer folks who don't owe the IRS than in 2009. That year, the Tax Policy Center estimated that around 47 percent didn't... Read more →

If you got an extension to file your 2010 tax return, you essentially hit the snooze button on the tax alarm clock. It started ticking again on April 19. And if you've checked the tax countdown clock there in the left column of the ol' blog, you'll see that as of today (Sunday, April 24), you have 176 days to finish up your 2010 Form 1040. And that's this week's By the Numbers figure. This latest countdown clock will run until midnight on Oct. 17. Yes, it's the 17th this year because the usual Oct. 15 deadline is on a... Read more →

I attended my first professional hockey game in 1981. The hubby and I were living in Washington, D.C. (yes, the city proper, a basement apartment near Capitol Hill) and he wanted to introduce me to another sports first. Thirty years ago that summer I had already attended my first Major League Baseball game, at now-gone Memorial Stadium in Baltimore to see the Orioles, still my favorite MLB American League team. Sorry Texas Rangers, but you know how it is with first loves. When fall rolled around, it was time for a trip to the Maryland suburbs and the Capital Centre... Read more →

What a difference a year makes. The nation's capital has collected $29 million so far this year in estate taxes. Actually, that's just money taken in through February. And it's already very close to District of Columbia chief financial officer's projection that the city would collect a total of $35 million this year. "I hesitate to say we will collect more estate taxes because that would mean some untoward happening in certain parts of the city," D.C. CFO Natwar Gandhi told the city council last week. Gallows humor aside, the money is quite welcome by the leaders of America's capital... Read more →

Earth Day was created 41 years ago as a day to inspire awareness of and appreciation for our planet's natural resources. Earth Day Network says that Earth Day is now observed on April 22 in almost every country across the world. U.S. lawmakers in recent years have used tax policy to promote energy savings, which are designed to help protect the environment. The debate continues as to whether such tax laws really work. Are electric cars really better environmentally since the current they need to operate is generated in many cases by burning the uber pollutant coal? Then there's the... Read more →

Like its counterparts in the 50 states, the District of Columbia is scrambling for money. And what better source than the rich athletes that show up to play inside the federal enclave's boundaries? However, the imposition of a jock tax in D.C. will take some support from folks who aren't always big fans of letting the nation's capital run its own affairs, members of Congress. The Home Rule Act or 1973 prohibits D.C. from imposing a tax on nonresidents. It was created to keep the capital city from taxing commuters who come from their homes in adjacent Maryland and Virginia... Read more →

The spring storm season is upon us with a vengeance. Last night, another round of tornadoes and severe storms lashed the Midwest and South. The one bit of good news is that there were no fatalities. Sadly, that wasn't the case last weekend. The severe weather outbreak a few days ago killed at least 47 people. North Carolina was the hardest hit, with homes and businesses flattened and 24 people losing their lives. This latest tragedy comes only about six months after the state took a hard hit last fall from strong storms and flooding. The North Carolina Department of... Read more →

I admit it. I didn't do much of anything yesterday. I was glad April 18 was over, even though I filed for an extension and will be working on our 1040 in the coming weeks. What about you? Did you get your return (or Form 4868 extension request) filed on Monday? No? So what now? Don't panic, but don't delay. Penalty charges are adding up: Penalties and interest are accumulating as I type and you read. The current IRS interest rate isn't so bad, but depending on how much you owe, the penalties could quickly add up. You can put... Read more →

Where does your tax money go? White House offers its own taxpayer receipt

I hope all y'all came through Tax Day relatively unscathed. Even though most people get refunds when they file their returns, it's still no fun to fill out the forms detailing how much of our money goes to Uncle Sam. Exactly how that money is and will be spent is the prime topic nowadays on Capitol Hill. Congress finally agreed last week on a budget to keep federal offices open through Sept. 30. Discussions on the next fiscal year budget, however, are likely to be more difficult. A lot of the debate centers on which programs get how much money.... Read more →

Feeling left out because the whole tax world seems to have gone electronic? Don't. There are still some taxpayers who rely on old-school snail mail filing. Some folks refuse to e-file for a variety of reasons. They don't trust the system when it comes to protecting their personal tax and financial data. Others don't trust the software, preferring to pull out the calculator and tote the numbers themselves. A good number of folks who file real paper returns owe the IRS and don't want to pay the extra fees associated with most e-payment methods. Plus, although the IRS is generally... Read more →