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August 2011

Writing off your foreign taxes

Most of the foreign tax attention of late has been on the Internal Revenue Service's latest effort to get a handle on taxpayer money located outside the United States. The Offshore Voluntary Disclosure Initiative, or OVDI, deadline was to have expired today, Aug. 31, but because of Hurricane Irene, the IRS pushed the notification date to Sept. 9. But while the OVDI will cost a lot of taxpayers substantial sums, sometimes foreign taxes can help lower an IRS bill. And that's why the tax-saving option is this week's Weekly Tax Tip. When your diversified investments result in you paying foreign... Read more →

Popular, and costly, tax breaks that could be trimmed to help reduce the deficit

Congress returns to Washington, D.C., next week -- consider this fair warning! -- and lawmakers have their plates full. In addition to the jobs agenda that Obama wants them to address, there are 11 appropriations bills that need to be dealt with so federal agencies can continue to operate when the new fiscal year kicks in on Oct. 1. And we can't forget the Super Congress committee, officially named the Joint Select Committee on Deficit Reduction, that was created as part of the debt ceiling increase law and which is charged with finding ways to cut federal spending. While the... Read more →

Some words of, er, wisdom(?) from Texas Rep. Jeb Hensarling: "It's always a net positive to let taxpayers keep more of what they earn, but not all tax relief is created equal for the purposes of helping to get the economy moving again." Or, as Going Concern noted, All Tax Cuts Are Good But Some Are Gooder Than Others. Remember, Hensarling is the House Republican co-chair of the Joint Select Committee on Deficit Reduction, aka the Super Congress or super committee. Hensarling and his Senate Democrat counterpart Patty Murray of Washington issued a joint statement last week announcing that they... Read more →

Some nut jobs, folks who need lives, conspiracy theorists believe Kenneth Lay is living the good life on some faraway tropical island. They just don't buy that Lay, the former chief of Enron, died just weeks after being found guilty in May 2006 of 10 counts of fraud and conspiracy related to the collapse the energy company he founded. Lay's death meant that he didn't have a chance to appeal his convictions, so they ultimately were thrown out. And the erasure of the jury verdict meant that Lay's family (and if you go along with the fake death theory, the... Read more →

No, not that rich Seattle guy with his ginormous philanthropic foundation. This time it's Rick Steves. Steves, founder of the Edmonds, Wash.-based Rick Steves' Europe Through the Back Door travel conglomerate, has donated $1 million to his community's arts center. Steves was able to share his wealth thanks to the success of his travel writings, tours, radio show and speaking engagements. But he says the thing that's really allowed him to amass so much disposable wherewithal is the lower tax rates created by the Bush-era tax cuts. Steves on the air with his radio show, Travel with Rick Steves. (Photo... Read more →

Hurricane Irene is no more. She hit New York City this morning as a tropical storm and will continue to disintegrate as she moves northward. Now comes the clean up. Some folks are actually disappointed that Irene wasn't more destructive. These people are jerks. More than a dozen people have died because of Irene. More than four million homes and businesses are without power, not a pleasant condition with still steamy late summer temperatures hanging around. And early estimates are that total damages will run around $7 billion. Even when a storm's damage is relatively minimal, ask anyone who's dealing... Read more →

What a crazy busy time last week at my other tax blog! You'd a-thought a tax hurricane was blowing in alongside insistent Irene. It all started with schools welcoming back kids. That means parents are now dealing with education expenses. But there are some tax breaks that can help cover classroom costs. Then on Thursday, I just had had to address the tax storm brewing because bored politicians decided to start ranting about who is and isn't paying taxes. Guess what? Everyone avoids taxes. And speaking of trying to get away without paying Uncles Sam, on Friday I posted a... Read more →

Texas can continue to impose its $5-per-customer fee assessed strip clubs that serve alcohol. The so-called pole tax does not violate the clubs' free-speech rights, according to the Texas Supreme Court. The legal battle has been underway since 2007. That's when the state's Sexually Oriented Business Fee Act took effect. The law imposes the extra charge on establishments that offer exotic dancing and serve alcohol. Although the fee is based on the number of customers, the businesses must pay it. If I had to guess -- and guessing is what I'd be doing since I haven't visited a strip club... Read more →

When Indiana decided to use its tax laws to lower the boom on puppy mills, there was great hope that such efforts would spread nationwide. Under the Hoosier State's jeopardy tax assessment law, a state court filing alleging a breeder owes delinquent income and sales taxes would allow the state to seize the business' taxable assets. In these cases, that's puppies and dogs. The Indiana Tax Court, however, has ruled that this tax dog won't hunt. Judge Martha Wentworth found that the actions of the Indiana Department of Revenue and Attorney General exceeded their authority by using jeopardy tax assessments... Read more →

Hurricane Irene is on her way, so please, please, please take her seriously. Take the appropriate storm and financial steps to be safe. And if officials say leave, leave! Back in 2004, the hubby and I hunkered down in our South Florida home for two storms. It was not fun. You can find more disaster preparation and recovery tips and helpful links in my post from earlier this week on dealing with disasters. Stay safe! Read more →

Super committee co-chairs are laying deficit reduction groundwork

You thought members of Congress were just screwing around on their August recess district work session recess, didn't you? It's a common assumption, since lawmakers always seem to futz around when they are ostensibly officially at work on Capitol Hill. Well, some Representatives and Senators might indeed be keeping their heads down and trying to decompress after the debt ceiling debacle. But the co-chairs of the Joint Select Committee on Deficit Reduction, aka the Super Congress or super committee, swear they and their colleagues have been working on their appointed task since they left D.C. earlier this month. Sen. Patty... Read more →

Tax help to ease educational costs

What's that cheering I hear? Oh yes, parents sending their kids back to class. Of course, the joy vanishes when the school bills arrive. But your dear old Uncle Sam wants to help with the ever-increasing cost of getting an education. And the many tax-favored ways to pay for school costs is our latest Weekly Tax Tip. The tax code is full of ways to save and pay for college and some elementary and secondary school expenses. They include 529 plans, Coverdell Education Savings Accounts, the tuition and fees and student loan interest above-the-line deductions, the American Opportunity and Lifetime... Read more →

Warren Buffett's call to tax the wealthy more continues to reverberate. Now some rich residents of France have issued their own "tax us more" plea. Sixteen French residents earning a millionaire (or much, much more) a year say their government should create a "special contribution" that would target the rich but in a way that wouldn't force them to flee to tax haven countries. Their increased tax request was published yesterday, Aug. 23, in the online version of the French weekly magazine Le Nouvel Observateur. The wealthy tax-seeking French petitioners already pay a top rate of 40 percent, along with... Read more →

What the heck is up Mother Nature? I know we humans are an annoying bunch, but do you really have to keep whacking us? In less than 24 hours, strong earthquakes have rattled the East Coast and the Rocky Mountains region. The 5.3 temblor that shook Colorado Monday night was the strongest recorded there in more than a century. It also was felt by residents of Kansas and New Mexico. Then this afternoon, a 5.9 quake centered in Virginia prompted evacuation of buildings in the nation's capital and shook folks from North Carolina to New Hampshire. It was the strongest... Read more →

A refrigerator is not a luxury

Everyone is entitled to his or her opinions. But some points of view, especially when it comes to politically-tinged issues, are mind boggling. Take the Fox News segment that in arguing for elimination of tax breaks for the poor cited Department of Energy data listing the modern conveniences that members of this lower-paid demographic own. Among the ostensibly unnecessary items were cell phones, air conditioning, cable television service, microwaves, dishwashers and, topping the list, refrigerators. That piece was included in a segment last week by Jon Stewart. It starts at the four-minute mark of the Comedy Central's The Daily Show... Read more →

Where to put your money, redux

In catching up on my reading this afternoon, I ran across an article on the hidden dangers in safe havens. Since it fits with my post this morning about low interest rates, I wanted to share. All the recent financial turmoil now has me wondering if when China became the United States' biggest creditor, the country was hit with a variation of that often-cited (faux?) Chinese curse: May you live in interesting financial times. Read more →

The interest rate we're getting from the bank for it to hold our money is pathetic. No, despite the whiplash produced by the stock market's recent gyrations, we're still in equities. But we also try to stay diversified. And since we think gold is a bit over valued right now, we, like lots of other folks, still have some cash stashed in certificates of deposit. One of the CDs came up for renewal last week and we rolled it over despite the infuriatingly low interest rate. And yes, I'm too embarrassed to even tell you how minuscule that rate is.... Read more →

It's no secret that folks in D.C. -- or at least on Capitol Hill -- have a different perspective about just about everything. And they definitely use a different dictionary when it comes to defining things. That sometimes skewed point of view and questionable lexicography is very evident when it comes to taxes. Take our current individual income tax rates, which start at 10 percent and top out at 35 percent. They're commonly called the Bush era tax cuts since they were put into the tax code when George W. Bush was in the Oval Office. However, since Obama made... Read more →

Maybe it's the constant running of my air conditioner, but last week at my other tax blog, I focused mainly on energy related tax issues. The week kicked off with a look at an effort to require federal loan agencies to assess the expected energy costs for mortgage loan applicants. Basically, the Sensible Accounting to Value Energy, or SAVE, Act would change mortgage underwriting practices so that they would consider how much an energy-efficient home could knock off of utility bills each year. Smaller bills mean more money to pay the mortgage and maintain the home. The energy trend blogging... Read more →

Did Internal Revenue Service Commissioner Doug Shulman get an invitation to Kim Kardashian's wedding? Or was the IRS release yesterday of tax tips for recently married couples just a coincidence? Yeah, I know, the IRS announcement probably doesn't have a thing to do with this evening's celebrity nuptials. But it certainly is timely, since taxes apply to Kim and her soon-to-be husband Kris Humphries, too. So let's look at the IRS' wedding gift of tax-themed advice for Kim and Kris and all young and young-at-heart lovers tying the knot. 1. File name change paperwork As soon as Humphries put the... Read more →