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November 2013

Be on the lookout tax preparers. If you were sloppy in seeking the Earned Income Tax Credit (EITC) for your clients, you could be soon hearing from, both via correspondence and in-person visits, the Internal Revenue Service. The EITC is one of the most expansive uses of the tax code to fight poverty. It was created in 1975 as a way for lower-paid workers to offset the Social Security taxes that take a relatively big bite out of their paychecks. The EITC also is problem every tax-filing season. Not only does it confuse taxpayers who might qualify for it, but... Read more →

Washington State on Monday, Nov. 11, enacted the largest corporate tax break any state has ever given to a single company. Boeing, the giant aerospace company from which Seattle gets its Jet City nickname, is the beneficiary. Boeing's Everett, Wash., factory as seen from above in October 2011; Photo by Jeremy Elson via Wikimedia Commons The new law extends a business and operating tax cut for the aerospace giant through 2040, streamlines the permitting process and invests in a transportation package the company had sought. The hurried crafted tax package, estimated to be worth a total $8.7 billion over the... Read more →

Today, Nov. 12, 2013, is a big day for all sorts of gamblers. For traditional gamblers, it's MegaMillions drawing day. The jackpot is $132 million (a $71 million lump sum payout option). It's also lottery day for many state games of chance. And let's not forget folks who are in Nevada, Atlantic City or casinos across the country. They are sure to include today's numerical representation of 11-12-13 in their bets. Gamblers tend to be superstitious and anything, and I mean anything, that might help produce a win is embraced. "Dates are significant to a lot of players," Danielle Frizzi-Babb,... Read more →

Folks receiving federal help buying groceries are making do with a little less. The increase in Supplemental Nutrition Assistance Program (SNAP) benefits, or food stamps (although most programs are via debit cards), ended on Nov. 1. Calculations by the Center on Budget and Policy Priorities (CBPP) show that for families of three, the cut will be $29 a month, or a total of $319 for November 2013 through September 2014, the remaining months of fiscal year 2014. CBPP says the reduction means that SNAP benefits now will average less than $1.40 per person per meal in 2014. In dinner table... Read more →

12 charitable groups that would love to take your
tax-deductible Typhoon Haiyan relief donations

Super Typhoon Haiyan has done its worst, literally, to the Philippines. The archipelago nation took a direct hit from what many meteorologists are characterizing as the most powerful typhoon ever. Towns have been destroyed and it's feared that 10,000 or more could be dead. "It is too early to tell what exactly we will need, but definitely after the relief operations there is going to be a lot of work in terms of reconstruction and rehabilitation, particularly for people who have lost their homes," Jose Cuisia, Jr., the Philippines ambassador to the United States, told Voice of America. United States... Read more →

Good news compulsive tax planners! You now can get to work on your 2014 federal income taxes. The Internal Revenue Service has issued updated information for the 40 or so tax code provisions affected by inflation. To get the tax party started, below are tables of the 2014 individual income tax brackets. Single Taxable income: Tax rate: Up to $9,075 10 percent $9,076 to $36,900 15 percent $36,901 to $89,350 25 percent $89,351 to $186,350 28 percent $186,351 to $405,100 33 percent $405,101 to $406,750 35 percent $406,751 or more 39.6 percent Head of Household Taxable income: Tax rate: Up... Read more →

After a great 7 and 0 start, my Texas Tech Red Raiders have stumbled a bit. Going into today's game with Kansas State, they were 7-2. As I type, it's still early in the second half, but right now it's looking like we'll fall to 7-3. Still, Tech fans are thrilled with the possibilities that arrived when former star quarterback Kliff Kingsbury (pictured with a young fan paying Halloween costume homage to his favorite coach), who set multiple school records when he was a Double T quarterback, took over as head coach this season. I won't bore you with the... Read more →

Super Typhoon Haiyan (also known as Yolanda) slammed into the Philippines this morning. It is too soon to know the full extent of the damage, but given the strength of the storm -- it was a Category 5 as it neared the island nation -- things are likely to be dire. Typhoon Haiyan/Yolanda makes landfall early today in the Philippines. Click image for storm, damage updates. One report is that at least 33 people have died in the storm, which meteorologists say is possibly the strongest storm of its kind in history. Reuters reports that 12 million people, more than... Read more →

Did you buy Twitter stock today when the Internet company went public? Neither did I. I am hoping, though, that the tech mutual fund I own did pick up some shares. And I hope the Twitter folks are successful, not only because of my possible future earnings potential, but because the 140-character online connector is my favorite of the social media offerings -- despite this very long sentence and my overall tendency toward lengthy blog posts! (BTW, I'm @taxtweet.) Today's stock market twittering attention got me thinking about an annual year-end tax-planning rite, the evaluation of portfolios. In most cases,... Read more →

The last hurdle in Colorado's legalization of small amounts of recreational marijuana passed electoral muster yesterday. Voters in the state that's home to the Mile High City approved Proposition AA, a ballot measure that on Jan. 1, 2014, will add taxes totaling 25 percent to the cost of pot. That overwhelmingly "yes" vote, which around midnight Mountain Time was 65 percent for to 35 percent against, for the tax increase is enough to win 25 percent this week's By the Numbers honors. Excise plus sales taxes: Proposition AA actually authorized two taxes. There's a 15 percent excise tax assessed when... Read more →

The elections are over. You're coming down from the sugar high of "helping" your kids finish their haul of Halloween candy. That makes it the perfect time to seriously think about your taxes, both moves that could lower your 2013 taxes and steps to take so that 2014's Internal Revenue Service bill is even less. I know you don't want to mess with taxes right now. You're starting to worry about your general finances as you make your holiday shopping lists. But some quick tax planning might help you get your hands on a few more dollars to spend on... Read more →

All eyes have been on Colorado since its voters last year legalized recreational use of marijuana. This election day, we get to see if Colorado voters will agree to impose a 15 percent excise tax on weed. The tax would be on the average wholesale price of retail marijuana. It would apply when the plant product is first sold or transferred by a retail cultivation facility. The marijuana excise tax is just one part of Proposition AA. The measure also asks voters whether they want to add a 10 percent sales tax on retail sales of the herbal tobacco --... Read more →

So what did you do with the hour you got when Daylight Savings Time ended early Sunday morning? If you've still got those 60 minutes in your time bank, here's a good use of it. Check out Tax Carnival #122: Return to Standard Tax Time. Let's get the tax clock started with a look at a topic that's consumed a lot of hours of late, the Affordable Care Act, also known as Obamacare. Michael Kitces says that while the new Premium Assistance Tax Credit for health insurance can make coverage a lot more affordable, rising income can quickly phase out... Read more →

Several members of Congress are applauding Treasury's decision last week to allow a $500 annual rollover of unused medical flexible spending account (FSA) money. You should find rolling over unused FSA money easier than this puppy finds simply rolling over! Not surprisingly, they are Representatives and Senators who have introduced legislation to do the same thing. And a bipartisan pair of lawmakers is still calling for the total elimination of the FSA use-it-or-lose-it rule. As I noted both here on the ol' blog and over on, if you have $500 or less in your medical FSA at the end... Read more →

Are you still finding timepieces that are wrong this morning? I always miss a clock or two every time we switch, as we did earlier today, from Daylight Saving Time to Standard Time and vice versa. Like most folks, I prefer the return to Standard Time when we, as the mnemonic phrase reminds us, fall back and get (presumably) an extra hour of sleep. And like most folks, I credit (or blame, depending on how tired I am) Benjamin Franklin for coming up with the clock adjusting idea. The primary purpose of Daylight Saving Time (DST), or "Summer Time" in... Read more →

What with the continuing debate over the Affordable Care Act, aka Obamacare, and the recent easing of the medical flexible spending account (FSA) use-or-lose rule, most of the attention during this fall's workplace benefits enrollment season has been on the health-care options. If you have kids, however, you also should check out your company's child care FSA. In most cases, businesses that offer workers the medical FSA option also provide a similar plan to help them cover child care costs. And like its medical companion, a child care FSA saves you tax money because you put money into the account... Read more →

Attention medical flexible spending account (FSA) shoppers. The good news is that Uncle Sam is making it easier for you hang onto to the pretax money you put into this workplace benefit. The bad news is that if you are now perusing your company's benefits during open enrollment season, the FSA change probably won't affect your spending account in 2014. Yesterday, Oct. 31, the Treasury Department announced that employers now can offer FSA holders the option of rolling over up to $500 left in their spending accounts at the end of the benefit year. That's right. If you have $500... Read more →