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June 2012

It was a high old time last week at my other tax blog. A study by the Institute on Taxation and Economic Policy (ITEP) found that states with high tax rates generally do better than no-tax states by most economic measurements. Go ahead readers in the nine no-income-tax states of Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming and those living in California, Hawaii, Maine, Maryland, New Jersey, New York, Ohio, Oregon and Vermont, the nine states deemed high-tax, sound off. I'm ready to hear why ITEP is right or wrong! Then there are the highly... Read more →

Attention Amazon shoppers in the Lone Star State. Get your orders in today if you want to save a few dollars. Tomorrow -- Sunday, July 1 -- the Seattle-based Internet retail giant begins collecting the state's 6.25 percent sales tax (plus local sales tax add-ons) from Texas shoppers. Amazon boxes by brendan-c via Flickr Creative Commons The added payments by purchasers is part of a tax deal Amazon cut with Texas officials. In 2010, the Texas Comptroller's office demanded Amazon pay $269 million in sales taxes that the state said should have been collected on purchases from 2005 to 2009.... Read more →

Nah, the Supreme Court's tax-based decision that the health care law is constitutional is not a new NBC sitcom, although the way the network has struggled recently, maybe I should pitch it. The decision and the law are very serious topics. But that didn't stop some on the Internet from having a little fun with the ruling and reactions. The always insightful Secretary of State Hillary Clinton cuts to the chase in her texts: Check out the rest of Hill's smartphone comments on the surprise ruling at UpWorthy. Then there are the thoughts of film heartthrob Ryan Gosling: The actor's... Read more →

An amazing thing happened while most of us were distracted by the Supreme Court rulings this week on immigration and health care. Congress actually did some work. Really! Before the Representatives and Senators break for the July 4 recess, they are expected to vote on a $120 billion highway bill to pay for construction of roads and bridges for the next two-plus years. The infrastructure measure also contains provisions to keep the student loan interest rate at 3.4 percent for another year and extend for five years the National Flood Insurance Program. UPDATE: The House this afternoon (June 29) passed... Read more →

Donald B. Verrilli, Jr., I apologize for dismissing your efforts before the U.S. Supreme Court in support of the Patient Protection and Affordable Care Act, aka Obamacare. Back in March's oral arguments when you, in your capacity as Solicitor General of the United States, wandered off the commerce clause to discuss taxes, you were right on the money. And I and many other armchair legal eagle wannabes were dead wrong. By a 5-to-4 decision, the nation's highest court deemed that the individual mandate -- the provision that will in 2014 require everyone to purchase health insurance or pay a tax... Read more →

Obamacare (and associated tax) upheld by Supreme Court

Breaking news: Tax serves as basis for health care act constitutionality. You heard correctly. Supreme Court rules that Congressional taxing authority makes Obamacare OK. Anti-tax, anti-Obamacare heads are exploding. Tax geeks everywhere are over the moon. Taking my mother to celebrate her 78th birthday. Post about historic health care/tax ruling will follow dessert. Read more →

Stephen Colbert offers possible (???) Supreme Court health care rulings

Are you ready for tomorrow's big health care act ruling? One Senate candidate is prepared. Richard Mourdock recorded three responses, planning to post the one that fit what the Supreme Court decides on the insurance purchase mandate portion of President Obama's signature legislation, the Patient Protection and Affordable Care Act. One problem. Someone on his staff jumped the gun and Mourdock's "healthcare is unconstitutional" video hit the Internet early. That gave faux conservative Stephen Colbert an idea, always a dangerous, and hilarious, thing. Check out the Comedy Central funny man's own health care ruling "presponses." The Colbert Report Mon -... Read more →

Are your kids too old, or think they're too old, to go to day camp? Maybe it's time they got jobs. Summer jobs for teenagers is a time-honored tradition, a first step in the passage to young adulthood. Employment typically ranges from the tried-and-true lawn mowing, baby sitting and life guarding to in-office work as clerks and assistants to helping out mom and dad in the family business. And part of that transition to income earner could, as the Weekly Tax Tip notes, include tax responsibilities for the teen employees. Yep, things can quickly go from being a source of... Read more →

The third time is definitely is a charm for the Internal Revenue Service when it comes to bringing bucks back home from foreign tax havens. The tax agency says that its latest offshore voluntary disclosure program, or OVDP which is the term the IRS prefers instead of tax amnesty, has pushed the amount collected in all its efforts to more than $5 billion. In 2009 and 2011, the IRS offered foreign account holders the chance to tell Uncle Sam about their accounts in exchange for lower penalties and the promise of no criminal tax evasion charges. But if folks didn't... Read more →

The Treasury Department is promising two Ways and Means members that it will get them answers about the failed plan to issue tax refunds on prepaid debit cards soon. We shall see. Fast start, but...: The tax refunds via debit cards plan was launched with much fanfare in January 2011 as a way to help taxpayers who don't have bank accounts. With a prepaid debit card instead of a paper tax refund check, argued Treasury, recipients wouldn't be at the mercy of check cashing companies. Even consumer advocates lauded the pilot program. Sending refunds via plastic was a logical move... Read more →

Today's Supreme Court split ruling on Arizona's immigration law isn't going to do anything to quell the debate on this topic, especially in this presidential election year. What's needed is Congressional action on immigration policy, which isn't going to happen in this presidential election. In the meantime, however, some immigration-related tax regulation and legislation is popping up in Washington, D.C. IRS immigration-related regs: First, let's hear from the Internal Revenue Service. The nation's tax collecting entity last week announced interim changes to strengthen its procedures for issuing Individual Taxpayer Identification Numbers, or ITINs. The IRS began issuing ITINs in 1996... Read more →

It's no secret that the very rich make up a very small percentage of America. It's also no secret that potentially bigger tax bills for the wealthy is the sticking point in the current national battle over what's to become of U.S. individual rates in 2013. Two tax policy research groups now have weighed in on the debate with calculations showing that only 1.9 percent of Americans would lose any part the current income tax cuts in 2013 under Obama's tax proposal. And that percentage is this week's By the Numbers figure. The Institute on Taxation and Economic Policy (ITEP)... Read more →

A change in property tax payment methods and what changes are ahead for federal income taxes were the subjects of posts last week at my other tax blog. Homeowners in an Indianapolis neighborhood were hit with higher property taxes to cover a new sewer system. They got to choose whether to pay the real estate tax in full or pay it off over 30 years. A small group paid the total tax. So when the city changed the payment system and forgave the unpaid tax still owed by the installment paying homeowners, the early payers sued, seeking a refund of... Read more →

It now is official. Smokers can puff away without having to pay more in California cigarette taxes. For a brief time after the June 5 vote, it looked like Proposition 29, which would have raised the state cigarette excise tax by $1 a pack, might have a chance at becoming law. But Golden State voters narrowly defeated the ballot initiative, according to full precinct results that were posted Friday, June 22, on the California Secretary of State website. The tax, which would have gone primarily to cancer research projects, lost by 50.3 percent to 49.7 percent. Around 100,000 absentee and... Read more →

UPDATE: Effective with the 2013 tax year, the Form TD F 90-22.1 has been replaced with an updated form, FinCEN Form 114. You can read more about FBAR and Form 114 here and here. If you have a nice chunk of change in a foreign account, you've got a week to tell the Treasury Department about it. Next Saturday, June 30, is the deadline to submit Treasury Department Form 90-22.1 (TD F 90-22.1), Report of Foreign Bank and Financial Accounts (FBAR). This annual report is required if you have foreign bank accounts or offshore financial accounts or signature authority over... Read more →

Summer officially arrived at 7:09 p.m. Eastern time Wednesday, June 20, and the heat wave was right on time. Eastern seaboard residents, used to early summer temperatures in the low 80s, watched in dismay as thermometers in many places climbed almost 20 degrees higher than that. Here in Texas, areas all over the state have already recorded 100-plus degree days and more are expected well into next week. And in Arizona, legendary for its triple-digit temperatures, residents have been coping with readings nudging 110 since late May. But at least it's a dry heat. Yeah, right. Hot is hot. Actually,... Read more →

It's mid-afternoon and I'm sitting at my desk wearing a T-shirt and shorts. Why am I sharing today's attire choice, which actually is what I wear every summer day? Because of an online conversation I've been having with some other home-based business people about dressing for success. Most of my fellow work-from-home colleagues admit to dressing down on the job. Thank you all for your honesty. Not worrying about what to wear is right up there with no commute on the list of why I will never get another "real" job. But according to many career counselors, we sartorially challenged... Read more →

Day camp, the tax advantaged summer child care solution for working parents

A couple of weeks ago on my neighborhood walk I found myself wondering if every parent in my suburban community home schooled their kids … and if they were all at early recess! Then I realized that Austin area schools were out for the summer. On today's walk there was nary a child-related sound. Then I realized that school's been out for a while and kids, and their frazzled parents, have discovered day camps. When I was a kid, we didn't have day camps. Of course, that was a while back and I grew up in a small West Texas... Read more →

John Edwards, now Roger Clemens. Before that we had the reversal of the bungled corruption case against the late Sen. Ted Stevens. The Department of Justice avoided courtroom complications but not controversy with its settlement agreement in its antitrust case against Apple and two publishers over alleged e-book price fixing. And let's not even get into the the DOJ's oral arguments before the Supreme Court on health care. Regardless of where folks stand on this law, almost everyone agrees that the government's presentation before the justices was not one of its best moments. So what is up with federal lawyers?... Read more →

When we talk about taxes, most of the time we focus on the amount of federal income tax we pay. That's understandable. We're all concerned about our take-home pay and Uncle Sam's portion of our earnings is substantial. But he's not the only tax collector getting some a lot of our money. Now you can get an idea of how much of your money is going to the Internal Revenue Service and other tax offices. The American Institute of Certified Public Accountants (AICPA) has developed an online tax calculator called Total Tax Insights that provides a breakout of your annual... Read more →