Home is where the heart, and tax savings, are for Facebook co-founder Eduardo Saverin. That home now is in Singapore. Today's Facebook initial public offering could make Saverin around $4 billion richer. By renouncing his naturalized U.S. citizenship last September and relocating to the Asian city-state, Saverin will escape an estimated $67 million Internal Revenue Service bill. While Twitter posters like The Daily Edge are having fun at Saverin's expense, some folks don't think there's anything amusing about the former U.S. citizen's tax-saving move. Targeting tax expatriates: On the eve of the IPO, Democratic Sens. Charles Schumer of New York... Read more →
May 2012
When Congress was debating whether to extend the 2 percent payroll tax cut, one of the key arguments for keeping the rate at 4.2 percent through 2012 was that the extra money would help the country's economic recovery. That, of course, presumed that we'd all take the extra money -- estimated to be about $1,000 a year for a family earning the annual median income of slightly more than $50,000 -- and pump it back into the economy. So how's that working out? So-so, based on data collected by Liberty Street Economics, the blog by economists working at the Federal... Read more →
I can't watch Hoarders. First, those people are scary. And their houses are gross. But I also avoid the show because I am a bit of a pack rat and I don't want to be reminded of what could happen if I go over the "it could be useful one day" edge. That said, when it comes to taxes there are some documents you need to keep. Some only need to be stored for just a few years. A few, however, you should hang onto forever. Determining which tax material falls into what category is today's Weekly Tax Tip. Atop... Read more →
Sen. Charles Grassley is blowing the whistle on the federal tax whistleblower office. The Iowa Republican, a long-time supporter of rewarding those who help track down tax cheats, thinks the Internal Revenue Service's relatively new Whistleblower Office isn't doing its job. Under revisions to the tax cheat tracking mechanism, rewards to whistleblowers are no longer discretionary. They are to receive 15 percent to 30 percent of the collected proceeds. But that's not happening, at least not to the extent that whistleblowers and Grassley, a member of the Senate Finance Committee who in 2006 led the rewriting of law that created... Read more →
Family farms are among the most iconic of American symbols. That's why these patches of agrarian productivity often are invoked in tax fights, most notably by folks who want to do away with the federal estate tax. This tax is often cited, usually incorrectly, as a killer of family farms. Internal Revenue data show that only a fraction of the millions of estates left each year involve farm assets. And the New York Times reported that in 2001 the pro-repeal American Farm Bureau Foundation could not cite a single case of a family farm lost due to the estate tax.... Read more →
If you got a federal tax refund the last two filing seasons, chances are that your check from Uncle Sam this year was smaller. The average tax refund amount through the end of April was $2,716. That's $106 less than the average refund amount issued at around the same time last year, according to the latest Internal Refund Service 2012 tax filing season data. It's also this week's By the Numbers figure. Taxpayers who had their refunds directly deposited averaged slightly larger checks: $2,923. [1]Results for 2011 vary from those posted last year because certain results were totaled on different... Read more →
Happy Mother's Day! I'm spending this Sunday with my mother. Like most moms, she doesn't want anything extravagant on her special day. Just spending time together is the best gift, or so she says. I'm taking her at her word! Mother's Day gift that keeps giving photo by Katatonic28 / Flickr Visiting with Mom is much more manageable since she moved closer to the hubby and me about a year and a half ago. Getting together is the easiest it's been since I was in college. For most of the time that Mom's been here in Central Texas, we've been... Read more →
The taxes facing new Facebook millionaires and the impending end of the adoption tax credit were the topics last week at my other tax blog. Mother's Day is just hours away and moms soon will be getting lots of presents. But some mothers also get a tax break gift from Uncle Sam thanks to the adoption tax credit. Unless Congress acts, however, this tax break will become much less beneficial in 2013. Without the adoption tax credit, some parents will find they will need much more money to add to their families this way. Of course, everyone -- with or... Read more →
Small businesses are made the most welcome in Idaho, Texas, Oklahoma and Utah, according to a recent analysis by Thumbtack.com, in partnership with the Ewing Marion Kauffman Foundation. Those four states each got an A+ grade from small business owners and managers. Disappointing report cards went to California, Hawaii, Vermont and Rhode Island, each of which received an F. New York eked out a D. Click map for a larger, interactive version, as well as a text links to the states. The grading system was designed by Thumbtack.com, a San Francisco-based online marketplace of service professionals, and the Kauffman Foundation,... Read more →
This post was updated March 30, 2018. When the end of matrimony leads to the start of alimony, each parting partner can feel the tax effects. If you are the ex-spouse getting alimony payments, the money is taxable to you as income in the year it is received. This added income calls for a couple of additional tax considerations for the recipient. In traditional man and woman marriages, this usually meant that the husband made spousal support payments to his ex-wife. But the changing world -- including, but not limited to, things like more women working and the nationwide legalization... Read more →
You can learn a lot about your neighbors just by walking around the area. Take the kids who live seven doors down from us. Their driveway chalk art prompted a speculative haiku: Hopscotch? Much too tame. These kids are C.S.I. fans or quite macabre. OK, maybe it's me who's the television crime show aficionado. I'm sure (hope!) the children had much less ominous reasons for drawing chalk outlines of themselves. But the line artistry also got me thinking about that inevitable meeting of death and taxes. Yeah, that kind of A to B to taxes thinking tends to happen in... Read more →
With Mother's Day coming up this Sunday (there's still time to get a card in case you forgot!), today's Weekly Tax Tip is a celebration of parenthood, specifically the tax joys of having kids. One way to add a child to a family is through adoption. And yes, Uncle Sam does offer some tax help here, too, although unless Congress acts, the adoption tax credit could be seriously limited when Jan. 1, 2013, rolls around. But some mothers aren't afforded any official recognition, either by the greeting card companies, restaurants offering special meal deals on Sunday or the tax code.... Read more →
You've probably heard that Amazon reached deals with Nevada and Texas to start collecting sales taxes from customers in those states who buy online products. That's good news for the treasuries of these two no-income-tax states that rely heavily on sales tax revenue. And it's bad news for the many previously untaxed customers in those states of the online retail giant. But as the agreements were being struck, an interesting online conversation (how appropriate!) was going on among tax professionals about why the push to add a new tax when there's already a mechanism in place to get this sales... Read more →
Vice President Joe Biden was at it again this weekend being voluble Joe Biden. Appearing on NBC's "Meet the Press" on Sunday, the veep said he is "absolutely comfortable" with same-sex couples getting the same rights at heterosexual married couples. Lucky for Biden, a second top Obama Administration official today deflected some heat from the veep by echoing that position. On the "Morning Joe" program on MSNBC, Education Secretary Arne Duncan said that he supports gay marriage rights. Obviously, the political ramifications are getting all the buzz. But Biden's and Duncan's remarks also offer a chance to remind folks of... Read more →
Is the charity you just donated to still on the Internal Revenue Service's OK list? The answer is important not only to donors, but also to the nonprofits. If the answer is no, it means that individual taxpayers' contributions to those groups are not tax deductible. As for the organizations, they may be required to pay income taxes. The IRS keeps track of charities and when they fail to meet the tax requirements, it revokes the tax-exempt status of the noncompliant groups. Apparently, though, Uncle Sam has had some issues with its tracking process. A recent Treasury Inspector General for... Read more →
Tax scams and tax avoidance are always noteworthy. And they were the topics last week at my other tax blog. It's usually the tax scam itself that gets attention, but this time it was the guys allegedly involved. Three former National Football League players, a couple of them first-round draft choices, were charged with identity theft and tax fraud. Some other folks took their own identities and officially moved them to other countries to avoid taxes. Yep, the number of tax expatriates who are dumping U.S. citizenship to avoid the Internal Revenue Service is increasing. You can check out new... Read more →
Happy Cinco de Mayo. Today is the commemoration of Mexico's victory in 1862 at the Battle of Puebla over the invading French forces of Napoleon III. Over the years, the holiday spread from Mexico, through the American Southwest and eventually across the United States. And perhaps America's recognition of Cinco de Mayo is fitting: The United States was a major cause of France's attack on Mexico. The war America recently won over Mexico leveled the Mexican treasury and led to financial disaster. Thus, Juarez suspended payment to France and incited Napoleon III, ruler of France, to act. U.S. President Abraham... Read more →
This week's employment report was blah at best. The Labor Department today reported that hiring slowed for the second straight month and the U.S. economy added just 115,000 jobs in April. Overall, the unemployment rate dropped to 8.1 percent, down fractionally from 8.2 percent. But that tick downward was because nearly 350,000 people quit looking for work. In such a sluggish hiring atmosphere, a resume that stands out is key. The proper paperwork could help you nab a new, better and higher-paying job. The obvious tax/resume connection is that more money also might mean that you move into a higher... Read more →
Maryland Gov. Martin O'Malley on May 2 signed 294 bills passed by the legislature into law. Guess which one got the most press? The flush tax. The new law's official name is the Chesapeake Bay Restoration Fee, but flush tax is a catchier name and invokes the despised T word. That's always handy rhetoric, especially in an election year. Under the environmental law, the annual fee will double from $30 to $60 effective July 1. The charge generally will show up in monthly water and sewer bills, but those with septic systems could see the higher fee included in their... Read more →
If anyone doubted that the excise tax on tanning would pay off, they only need look at Patricia Krentcil. She appears to have single-handedly contributed hundreds of dollars to the U.S. Treasury via the tax that was enacted as part of health care reform. The 44-year-old New Jersey woman, whose skin looks much darker than her mug shot (at right, courtesy The Smoking Gun) in other photos and TV interviews, was arrested for allegedly putting her 5-year-old daughter in a tanning booth where the child reportedly suffered serious burns. New Jersey state law prohibits children younger than 14 from using... Read more →