As reported earlier, I spent last Thursday and Friday in Atlantic City. The purpose of my visit was Friday’s all-day year-end tax update seminar presented by the National Society of Tax Professionals.
The seminar was originally scheduled for the Sands Hotel and Casino, but as the Sands closed its doors for good on November 10th (it will be replaced by a new $1.5 Billion, 2000-room mega-resort to open in 2010) it was moved to the Holiday Inn, a non-casino hotel between the Tropicana and the Hilton.
I stayed overnight at the Tropicana, which has been totally remodeled since my last visit to AC, in a very comfortable room in the North Tower with a “casino view” – when I looked out my window I could see the great unwashed feeding slot machines.
The new Tropicana has many, many dining choices, from a deli, ice cream stand, buffet, rib joint, and branch of “Hooters” in the Boardwalk-level “Market Place” to more high-end Italian, Irish, Oriental, Cuban and Russian themed restaurants in the “Quarter”. I chose to dine at “Carmine’s” in "The Quarter", which serves “family style”. My Chicken Saltimbocca was enough to feed at least 3 people – I can’t believe I ate the whole thing!
I looked at the menu of “Ri Ra”, the Irish pub, but was disappointed, although not surprised, to find that it’s Shepherd’s Pie was not Shepherd’s Pie. Like most Irish restaurants I have encountered in the US, what is advertised as Shepherd’s Pie is really Cottage Pie – ground beef, mashed potatoes and vegetables. True Shepherd’s Pie is sheep and mashed potatoes only!
I limited my slot losses to $10.00!
As my hotel was all the way at one end of the Boardwalk I did not have much chance to explore. I did notice one big change since my last time here – the Ocean One mall, where I used to dine at a German Restaurant with a very extensive international “beer menu” on the third level, has become the much more upscale “Pier Shops at Caesars”.
The seminar, like the NATP one last month, was merely a “refresher” for me. Below are a few items of interest from the seminar, for your information -
* We reviewed comparisons between tax year 2003 and 2004, from the most recent IRS Statistics of Income Bulletin. Here are some facts for tax year 2004 returns:
- Taxable Income increased by 10.6%.
- Total Tax Liability increased by 10.5%.
- Wages increased by 6%.
- Adjusted Gross Income (AGI) increased by 6%.
- Net Capital Gains increased by 53.2%.
- Net Capital Losses decreased by 12%.
- Qualified Dividends increased by 29.2%.
- Taxable Pensions and Annuities increased by 5.5%.
- Taxable Social Security Benefits increased by 12.8%.
- Premature Withdrawals from Pension Plans increased by 41.6%.
- The Average Total Itemized Deductions increased by 4.8% (the average was $21,038).
- 5.7 Million taxpayers lost a total of $34.9 Billion in itemized deductions as a result of the “read my lips tax” – the phase-out of itemized deductions based on AGI.
- The number of returns that fell victim to the dreaded Alternative Minimum Tax (AMT) increased by 31.7% - and the total amount of AMT paid increased by 38.1%.
The average amount of AMT paid by taxpayers with AGI of between $100,000 and $200,000 was $5,498.
* We also discussed the “tax gap” – the difference between what taxpayers should pay and what they actually do – which is estimated to be over $300 Billion per year.
More than 80% of the tax gap is from under-reporting of net income. Non-filing of returns and underpayment of taxes each make up about 10% of the total. 80% of the 80% comes from understated income and not overstated deductions, and 43% of the 80% is from small business taxpayers.
* The IRS has reported that there will be more audits of entities that generate “net earnings from self-employment” (i.e. sole proprietors and one-man LLCs that file Schedule C and partnerships) in the future.
* It looks like it will be “more better” to claim the standard amount for the refund of federal telephone excise tax than to claim the actual amount of tax paid.
* While IRS will now allow you to have all or part of your federal refund directly deposited into an IRA, it is best not to do this if you are relying on the refund to fund a 2006 IRA deduction. There are too many potential problems – if the refund is reduced or increased by the IRS, or if the direct deposit does not physically take place by April 16, 2007, or if the trustee applies the deposit to tax year 2007 instead of 2006. If you are expecting a federal refund of $5,200 and you want to use $4,000 of this refund to fund your 2006 IRA contribution, you should write a check for the contribution and mail it to the trustee, making sure to indicate that the contribution is being made for tax year 2006.
I have just one negative comment about the seminar – the continental breakfast consisted of only bagels and cream cheese or butter (plus, of course, coffee or tea and juice). Lately the continental breakfasts at tax seminars have been getting skimpy. I look forward to the one at the NJ-NATP January seminar, which is usually much more extensive.