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June 2011

Music and video downloads on Rhode Island's potential tax list

Not only were the Beatles great musicians, Rhode Islanders are probably thinking the band was prophetic. After all, "The Taxman" lyrics are a long list of taxable items that used to seem outrageous. But as states cope with dwindling treasuries, we're seeing levies added to a lot of things we never expected to be taxed. That's the case in Rhode Island, where residents might soon face a 7 percent tax when they buy online content. That's right, downloading a personal copy of the Beatles tax anthem from iTunes could soon cost a Rhode Island music lover 9 more cents. In... Read more →

The battle by states to collect sales tax money from online retailers continues to be fought on various fronts with varying degrees of success. The tax collection proposals would apply to all online sellers, but they're known as Amazon taxes because the giant bookseller-turned-general-electronic-retailer is leading the charge against the taxes. In California, a bill incorporating portions of three earlier measures designed to make out-of-state online retailers to pay sales tax on goods sold in the Golden State late last week made it to Gov. Jerry Brown's desk. There is similar legislation on the books or in the legislative pipeline... Read more →

My neighborhood's spring garage sale was last month. It seemed to go well. And by well, I mean that none of our neighbors put out anything to sell so the hubby and I were spared the early morning hubbub of junk browsers. But summer is a prime time to clean out closets and garages and wherever else you stash stuff that you don't use and try to make a few bucks. Jean Murray looks at this annual (or more often) ritual in a recent U.S. Business Law/Taxes article. I am pleased she cited my discussion of capital gains and... Read more →

On this Father's Day, here's a special shout out to the dads who are raising their families on their own. The U.S. Census Bureau reports that in 2010 there were 1,762,000 men across the country who were raising kids solo. So on this day when we celebrate fatherhood, those dads represent this week's By the Numbers figure: Of the almost 1.8 million single dads, almost 46 percent are raising their kids alone because of divorce. Almost 30 percent were never married, almost 18 percent were separated and 6 percent were widowed. Most of these dads will file their returns as... Read more →

Happy Father's Day 2011

I got a bit of a head start on Father's Day last Wednesday with the Weekly Tax Tip about tax help in taking care of dad as he gets older. Those of us lending a hand to aging parents will need all the financial assistance we can get, according to a new report that says Americans who take time from work to look after (or even just look in on) an older dad or mom lose an estimated $3 trillion in wages, pension and Social Security benefits. The MetLife Study of Caregiving Costs to Working Caregivers: Double Jeopardy for Baby... Read more →

You win some. You lose some. That's how it went last week at my other tax blog. The winners were higher-income taxpayers who found ways to avoid paying tax when they filed their 2008 returns. It's no surprise that they used the same technique that lower-paid (and corporate) filers did and do: taking every available tax break. On the losing side were around 275,000 nonprofit organizations that had their tax-exempt status revoked by the IRS. Among the big names that showed up on the IRS no-longer-eligible list were several branches of AARP and the National Organization for Women. On the... Read more →

Victims of major natural disasters often get special tax consideration. But some members of Congress think that this year's incredibly destructive weather across much of the United States calls for added help. Sen. Richard S. Shelby (R-Ala.) has introduced the Southeastern Disaster Tax Relief Act of 2011. It would provide a variety of temporary tax help to individuals, businesses and governments in the bill's title region that were affected this year by severe storms, tornadoes and flooding. Tornadoes that swept through the southeastern United States on April 27, 2011, left homes destroyed and overturned vehicles in the Cedar Crest neighborhood... Read more →

The agency in charge of collecting the money needed to run the U.S. government and its programs has taken an early hit in the Congressional appropriations process. The House Appropriations Committee's subcommittee on financial services and general government has signed off, by voice vote, on a $19.9 billion bill to pay for financial services and general government costs through Sept. 30, 2012. Specifically, the House panel's budget calls for the IRS to get more than half of the total spending allocation. But the proposed $11.5 billion for the tax enforcement and collection crew is $606 million less than the IRS... Read more →

As I sat down to my bowl of corn flakes this morning, I couldn't help but wonder about the future price of a box of cereal. My breakfast food cost musings were prompted not only by my plans later today to do our weekly grocery shopping, but also by the Senate's surprisingly bipartisan vote yesterday to end tax credits for ethanol and trade protection that benefits the corn-based industry. Critics of government agriculture subsidies have long argued that part of the reason we're paying more at the store is because food crops are being supplanted by fields designated for fuel.... Read more →

What in the world am I doing wrong? It seems like everyone -- low-to-middle income filers, big companies and now folks earning more than $200,000 a year -- is able to avoid paying taxes. OK, so not every person is having a happy April 15. It just seems like it to those of us who tend to owe, even when we plan it that way. But data included in the latest IRS Statistics of Income (SOI) report show that higher-income folks (the agency's statutory definition is that $200,000 adjusted gross income threshold) are good at taking advantage of the tax... Read more →

Tax help when you help out your aging dad (or mom)

Father's Day is Sunday. Cards will be mailed, special dinners prepared and a variety of gifts presented to the men who mean so much to us. Many of us also will be dealing with things that go beyond one special day. Some folks with an aging dad are helping him out on a more regular, and in some cases daily, basis. Others soon will be providing that extra attention. If you are or expect to be caring for an elderly dad (or mom), the tax code offers some help. And that's this week's (#8) Weekly Tax Tip. Some things you'll... Read more →

Today is the filing deadline for American taxpayers living abroad. However, some folks no longer have to worry about the IRS. They've become "taxpatriates;" that is, they have surrendered their citizenship to avoid paying U.S. taxes. For the first three months of this year, 499 individuals renounced their citizenship for tax purposes. Andrew Mitchel, a tax attorney who follows such things in his International Tax Blog, says that while 499 isn't the largest number of quarterly tax expatriates in recent history (that was 560 in the second quarter of 2010), the quarterly average continues to increase. Graph courtesy International Tax... Read more →

Most taxpayers wrapped up their 2010 tax duties in April. But today, June 15, is the filing deadline for payers of estimated taxes. The second payment for the 2011 tax year is due today. It's also the deadline for some taxpayers who automatically were granted two more months to finish filling out their tax returns: U.S. citizens or resident aliens who are living and working outside the country, as well as for members of the military who are posted abroad. These folks still had to pay any due tax back in April. But they didn't have to send in the... Read more →

It's been a crazy June 14. But I couldn't let the day pass without a nod to the Stars and Stripes, and especially to my little brother. As long-time readers of the ol' blog know, this day is special to me not for the Red, White and Blue reasons, but because it was my younger brother's birthday. We lost him at a much too young age. But I often remember his good heart, disarming smile and the time when he was a preschooler who thought the all the flags flying on this mid-June day were in celebration of his birthday.... Read more →

I've been to enough cultural events to know that there is a very wide range of what is deemed artistic. The hubby and I have some heated interesting discussions after each museum exhibit or live performance we attend. A gentleman's club in Latham, N.Y., is hoping that such divergent opinions on art will work to its tax advantage. So far, though, Nite Moves has run into some tough critics in its effort to convince the tax and legal communities of the artistic merits of its offerings. The club contends that it shouldn't have to collect sales tax on the fee... Read more →

Americans are more pessimistic about the economic recovery. A report late last month from the Conference Board, a business research association, found that consumer confidence fell in May to its lowest level since last November. "Consumers are considerably more apprehensive about future business and labor market conditions as well as their income prospects," said Lynn Franco, Director of The Conference Board Consumer Research Center. "Inflation concerns, which had eased last month, have picked up once again." I see those inflation concerns on every grocery shopping trip I make with my mother. She's a senior citizen living primarily on Social Security... Read more →

The Internal Revenue Service borrowed a phrase from a popular fast food franchise in announcing that it had served more than 1 billion taxpayers via electronic filing, but I suspect the tax agency is bit behind in corresponding "happy returns." Still, 1 billion-plus e-filings since 1986 is a momentous number. So that threshold has earned this week's recognition as the featured By the Numbers figure: When electronic tax return filing started, it was simply a pilot project to gauge public acceptance and evaluate the costs. It went nationwide in 1990 "The one billion milestone means e-file has delivered real services... Read more →

What do you want from government?

Exactly what we want from our government -- actually, let's go plural, since we all pay taxes to our state and local governments as well as to Uncle Sam -- is a continual, and frustrating, question. Yet we still long for answers. So just in case you're having too much fun this weekend and wanted to ponder larger, more serious, issues for a while, I thought I'd ask. Last summer, the Center for American Progress conducted a person-on-the-street poll and produced the Public Opinion Paradox video. "There's a sort of paradox to America's public opinion on government," said Ruy Teixeira,... Read more →

Last week at my other tax blog: Tax cuts turn 10; Employer payroll tax break?

Did you throw a tax party last week? What? You missed the 10th anniversary of the Bush tax cuts? No worries. They're in place through 2012 so you have more chances to celebrate. But should you? The ramifications of the tax cuts enacted on June 7, 2001, were discussed last week in my Bankrate Taxes Blog post Tax cuts turn 10. It's been a mixed bag and one that, thanks to (or blamed on, depending on your political and economic perspective) the continuation last December of the tax breaks, we'll be dealing with until Dec. 31, 2012. Also last week... Read more →

Two summer recreational staples are involved in this week's Follow-up Friday, although at much more intense levels than you and I participate. Let's start with golf. You might recall that a couple of professional golfers were fighting with the Internal Revenue Service over how to classify their earnings and just how much they owe Uncle Sam for what they made on U.S. golf courses. Retief Goosen, a South African by birth and a current resident of England, has received a ruling from the U.S. Tax Court, and it's not what he had hoped to hear. The Court determined that Goosen,... Read more →