Don't Mess With Taxes

If you plan to work on taxes this summer, be it business filings or estimated taxes or finishing up your 2012 tax return for which you got an extension, mark these days on your calendar: May 24 June 14 July 5 July 22 Aug. 30 The Internal Revenue Service will be shut down those days, and possibly two more days in August or September. That's the word that went out in an email Friday from IRS Acting Commissioner Steve Miller to his employees. These are the five-for-sure days that IRS personnel will be furloughed as the agency deals with its... Read more →

We're into April, meaning that tax season is in high gear. So are the politics of taxation. And both topics were covered last week at my other tax blog. Most taxpayers every year get money back from Uncle Sam. And they are planning many different ways to spend their tax refunds. Various surveys say we, and I'm using the collective "we" even though the hubby and I don't expect a refund, will save the money, use it to pay basic necessities, pay down debt or splurge. Those refunds might come in hand to cover day-to-day expenses of people who are... Read more →

The wide ranging federal budget cuts known as sequestration have been in place for a month now and some folks definitely are starting to feel the effects. It's possible that Congress could come up with a budget that would ameliorate some of the $85 billlion in sequester pain being felt across the country. But don't expect it to be an easy process. Several fiscal year 2014 budget proposals have been released so far, including the Republican version from the House (Rep. Paul Ryan's "The Path to Prosperity") and the Democratic proposal out of the Senate (Sen. Patty Murray's "Foundation for... Read more →

Republicans in the House and Democrats in the Senate today unveiled their budgets for Fiscal Year 2014, which begins Oct. 1. Each side declared the other's proposal dead on arrival. The president was supposed to have, by law, delivered his budget on the first Monday in February. In case you don't have a calendar handy, that was Feb. 4. But the White House now says it will have its financial wish list ready on April 8. That date is significant because it's the day that Congress returns to work after its spring break. Capitol Hill watchers speculate that the Administration's... Read more →

Sequester is a hot topic, especially for folks who might lose some income because of the spending cuts. Their tax refunds sure could come in handy in those cases. And both issues were topics covered last week at my other tax blog. First, those refunds. The late start of the 2013 filing season meant that folks had to wait longer than usual to get their returns to the Internal Revenue Service. So some might have opted for a refund-based loan or similar product. That's generally not a good idea. While the refund anticipation loans, or RALs, of a few years... Read more →

We're starting our first full week of sequestration 2013. Before the $85 billion in spending cuts kicked in on March 1, the White House issued fact sheets detailing what sequester might mean to each state. For folks who haven't read those predictions yet, Saturday Night Live's Obama, portrayed by Jay Pharoah, boils down what areas might suffer in this weekend's opening skit. Now I dare you to try to make it through the rest of the day without the Village People's "YMCA" playing on a continuous loop in your head! You also might find these items of interest: Despite sequester,... Read more →

Sequester is here. Has your life changed materially yet? In the run-up to the March 1 sequestration deadline, the possible effects of the $85 billion in spending cuts were a big topic last week at my other tax blog. There was a lot of initial concern that the loss of funding for the Internal Revenue Service could could delay tax refunds. But the acting IRS commissioner told employees that furloughs would be postponed until after tax season. While there is immediate interest in the short-term operation of the IRS under sequestration, a group recently gathered in Washington, D.C., to discuss... Read more →

Sequestration 2013 arrives today, but if things go as the Internal Revenue Service plans, most taxpayers shouldn't notice. This filing season already has been crazy, delayed for weeks because of late passage of fiscal cliff tax laws that required the updating of IRS forms and its computer system. Then came sequester, $85 billion in broad automatic spending cuts scheduled to take effect at 11:59 p.m. today, March 1. To meet the mandated reductions, which cover the last seven months of the 2013 fiscal year, most federal agencies, including the IRS, will have to make do for a while with fewer... Read more →

Actually, tax reform will be H.R. 1. Speaker John Boehner (R-Ohio) has reserved that numerical designation for rewriting the tax code, according to The Hill newspaper's On the Money blog. Boehner has dibs on the first 10 bill numbers for the 113th Congress, but H.R. 1 generally is reserved for a signature legislative issue by the party that controls the House. "Reforming our tax code to get our economy going again and create jobs is a top priority for House Republicans,” Boehner spokesman Michael Steel told blogger Bernie Becker. Talking tax reform: It seems that tax reform, or at least... Read more →

Sequester, the implementation of automatic federal spending cuts to both domestic and defense programs, is set to take effect Friday, March 1, unless Congress acts. We've been here many times before, in a political game of fiscal chicken that usually ends with some sort of uneasy compromise before the worst-case scenario fully kicks in. Will that happen this time? My Congressional crystal ball is so shattered I am not venturing any prediction. But this time there's a new player in the game. Actually, there are 51 new players: the 50 states and the District of Columbia. And the state leaders... Read more →

It kind of was overshadowed by yesterday's Super Bowl, but Sunday, Feb. 3, was a big day in the tax world. It marked the 100th birthday of the modern tax code. Actually, it was the day 100 years ago that the 16th Amendment, the one that authorized the federal income tax as we know it, was approved by Delaware. The anniversary also gets By the Numbers honors this week. That vote on Feb. 3, 1913, by Ocean State lawmakers gave the amendment the requisite 36 state approvals, making it constitutionally legal. It's no secret that many folks, including some in... Read more →

President Obama is working on his annual budget, but we know one thing that he won't be asking Congress to approve: construction of a Death Star. Death Star by Krischan at Blitz Research Planet Creator forum The main reason is because building a "Star Wars" style space station/super weapon would cost an estimated $850,000,000,000,000,000. The Lehigh University students who arrived at that spectacular amount say it is roughly 13,000 times the world's gross domestic product and is for just the steel needed to complete the project. $850 quadrillion (yes, I looked up the name for 15 zeros) also is this... Read more →

When Congress and the President return to Washington, D.C., Obama wants lawmakers to consider a stripped-down measure -- dare we call it Plan C? -- that he says will keep taxes at their current rates for all but the wealthiest Americans. While it will definitely be welcome by most taxpayers, it is far from the grand bargain that Obama and House Speaker John Boehner, who saw his own Plan B fiscal cliff proposal killed by the insistent anti-tax faction in his own party, tried to reach in 2011. As envisioned, such an agreement would be a political tax and spending... Read more →

OK, it's an easy joke, but you knew it was coming. It's also quite possible that Dec. 20, 2012, marks the beginning of the end of Rep. John Boehner as Speaker of the House of Representatives. Last night, Boehner was unable to quell the rebellion among GOP conservatives and abandoned his alternative tax plan, deciding to not put it to a vote. The so-called Plan B would have increased taxes on millionaires but permanently installed the lower Bush-era tax rates (and other provisions) for other taxpayers. The Ohio Republican has had a tough time marshaling his troops after the 2010... Read more →

You've got to give House Speaker John Boehner credit. He's united a diverse group of lawmakers, lobbyists and policy groups in their disdain for his fiscal cliff Plan B solution. House Speaker John Boehner making a fiscal cliff point on the House floor, Dec. 13, 2012. Photo courtesy the Speaker's office. So what's got folks shaking their heads? Among the proposals highlighted on the Speaker's web page are: Permanently extend the current income tax rates -- 10 percent to 35 percent -- for everyone making less than $1 million; for millionaires and more, the top rate would be the 39.6... Read more →

Alan Simpson, longtime U.S. Senator who's now better known as part of the Simpson-Bowles budget deficit reduction plan, belies (and defies) his 81 years and takes to new media to encourage young people to get involved in federal debt reduction efforts. And if that means going Gangnam Style in the video for the Campaign to Fix the Debt and The Can Kicks Back, then Simpson doesn't have any issue with, as he put it, making "a perfect ass" of himself. So all you whippersnappers, Uncle Alan wants you to "stop Instagramming your breakfast and Tweeting your first-world problems and getting... Read more →

Those numbers geeks at the Tax Policy Center are at it again. They've come up with a fiscal cliff tax calculator (based on the version created back in the 2010 lame duck session when the Bush-era tax cuts were first set to expire) that gives us an idea of what our taxes might be depending on what happens with Congress and the president between now and the end of the year. Since there are so many options floating around Capitol Hill on how to deal with this impending fiscal fall, TPC has given us several options to mull over. We... Read more →

You know it's a wacky election year when folks from disparate parts of the political world start seeing things the same way. Bill Kristol, editor of the neocon Weekly Standard, agrees with my assessment from almost a year and half ago that the Republican Party needs to know when to learn out to declare victory and run with it. The newly reelected President Obama has said he's willing to work on changes to some federal domestic programs, known as entitlements in the spending hawks' dictionary, but that for his part he wants the top two Bush income tax rates to... Read more →

A little over a year ago, the House and Senate failed to reach a deal on how to cut the federal deficit by $1.2 trillion over 10 years. In the wake of that epic Congressional fail, bipartisan majorities in both chambers voted for sequestration, a financial threat that was supposed to force lawmakers to eventually act. That threat also appears to have failed. Sequestration, or automatic across-the-board cuts applied equally to defense and nondefense programs, is set to kick in on Jan. 2, 2013. How bad will the budget cuts be? Pretty bad, because, as the 394-page Office of Management... Read more →

There's no question that when tax rates are lowered, the U.S. Treasury collects less money. And everyone agrees that when taxes are cut in one place, they need to be raised somewhere, on on someone, else or spending cuts must be made. Coming up with a way to do exactly that is the issue before Congress, the White House, every candidate running for every federal office this year and all of us taxpayers. The counter below gives us an alarmingly graphic idea of how much money the current tax rates, enacted in 2001 under the Bush 43 Administration and extended... Read more →