* AccountantsWorld.com Tax Headlines reported on Rudy Giuliani’s tax plan. According to the article Giuliani said he would "make sure" the Bush tax cuts, scheduled to expire on 12/31/2010, are made permanent. He would index the dreaded AMT to inflation "so it doesn't begin to grow and affect more Americans in a way that it was never intended to do so." Giuliani also vowed to permanently repeal the estate tax and to create new tax saving accounts, as well as new health savings accounts that he said would help people buy insurance on the private market.
Another AccountantsWorld.com headline reports “Which States Are Best for Business? The 2008 State Business Tax Climate Index”, referring to the annual ranking determined by the Tax Foundation. While not quite last on the list, New Jersey is #49 – with the next to worst business tax climate (no surprise here). Wyoming is #1 and Rhode Island is #50.
* Speaking of presidential tax plans, the Tax Policy Center has developed a “matrix” of the 2008 presidential candidates’ tax proposals. According to the Center, “This matrix provides a side-by-side comparison of the 2008 presidential candidates' tax proposals, as gleaned from their websites and public statements. It outlines their proposed tax cuts, as well as adjustments to existing credits, capital gains taxation, corporate taxes, tax administration and more. The matrix will be updated as new information and proposals are released.” I have not had a chance to review it in detail. When I do I will provide comments.
* TAX GIRL Kelly Philips Erb gives some good examples of “Fearing the Taxman: When Not To Be Scared” with a list of “the top five things that taxpayers are irrationally afraid of - and shouldn’t be”. They are, with my comments –
· Being aggressive when it come to deductions: Do not audit your own return! If you spent the money and it is deductible you should deduct it.
· Audits: I do about 400 returns each tax season and I haven’t been to an office audit in probably ten years. The last actual audit I had to deal with was part of the National Research Program (see my October 6th “What’s the Buzz” post).
· Not having enough money to pay your bill: As I have said in previous posts, it is very important to get your tax returns in the mail on a time even if you cannot pay all, or any, of the tax due to avoid multiplying your penalties ten-fold.
· Correspondence from the IRS: More than half of all notices from “Sam” are incorrect. As soon as you get a notice from “Sam” you should send it to your tax professional ASAP. See my post “Oh No - A Letter from the IRS!”.
· Making a mistake: Hey, even I make a mistake on a 1040 every now and then. And nobody makes more mistakes than the IRS (except perhaps the NJ Division of Taxation).
Another AccountantsWorld.com headline reports “Which States Are Best for Business? The 2008 State Business Tax Climate Index”, referring to the annual ranking determined by the Tax Foundation. While not quite last on the list, New Jersey is #49 – with the next to worst business tax climate (no surprise here). Wyoming is #1 and Rhode Island is #50.
* Speaking of presidential tax plans, the Tax Policy Center has developed a “matrix” of the 2008 presidential candidates’ tax proposals. According to the Center, “This matrix provides a side-by-side comparison of the 2008 presidential candidates' tax proposals, as gleaned from their websites and public statements. It outlines their proposed tax cuts, as well as adjustments to existing credits, capital gains taxation, corporate taxes, tax administration and more. The matrix will be updated as new information and proposals are released.” I have not had a chance to review it in detail. When I do I will provide comments.
* TAX GIRL Kelly Philips Erb gives some good examples of “Fearing the Taxman: When Not To Be Scared” with a list of “the top five things that taxpayers are irrationally afraid of - and shouldn’t be”. They are, with my comments –
· Being aggressive when it come to deductions: Do not audit your own return! If you spent the money and it is deductible you should deduct it.
· Audits: I do about 400 returns each tax season and I haven’t been to an office audit in probably ten years. The last actual audit I had to deal with was part of the National Research Program (see my October 6th “What’s the Buzz” post).
· Not having enough money to pay your bill: As I have said in previous posts, it is very important to get your tax returns in the mail on a time even if you cannot pay all, or any, of the tax due to avoid multiplying your penalties ten-fold.
· Correspondence from the IRS: More than half of all notices from “Sam” are incorrect. As soon as you get a notice from “Sam” you should send it to your tax professional ASAP. See my post “Oh No - A Letter from the IRS!”.
· Making a mistake: Hey, even I make a mistake on a 1040 every now and then. And nobody makes more mistakes than the IRS (except perhaps the NJ Division of Taxation).
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Kelly also weighs in on the issue of tax forgiveness for debt forgiveness in her excellently titled post “Suddenly, Being Financially Irresponsible Pays Off!”. As Kelly puts it “Great. Now homeowners have yet another incentive to spend beyond their means - as if interest only and subprime mortgages aren’t enough.” And my answer to her Fix The Tax Code Friday question is, in a word, no. Stupidity should not be rewarded.
Kelly also weighs in on the issue of tax forgiveness for debt forgiveness in her excellently titled post “Suddenly, Being Financially Irresponsible Pays Off!”. As Kelly puts it “Great. Now homeowners have yet another incentive to spend beyond their means - as if interest only and subprime mortgages aren’t enough.” And my answer to her Fix The Tax Code Friday question is, in a word, no. Stupidity should not be rewarded.
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* NATP’S “Tax Tip of the Week” reminds us not to forget that “the new 2008 model year cars include hybrid vehicles that qualify for the Alternative Motor Vehicle Credit". Eligible 2008 model vehicles and the maximum credit include:
* NATP’S “Tax Tip of the Week” reminds us not to forget that “the new 2008 model year cars include hybrid vehicles that qualify for the Alternative Motor Vehicle Credit". Eligible 2008 model vehicles and the maximum credit include:
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· Ford Escape 2WD Hybrid — $3,000
· Ford Escape 4WD Hybrid — $2,200
· Mercury Mariner 4WD Hybrid — $2,200
· Mercury Mariner 2WD Hybrid — $3,000
· Chevrolet Malibu Hybrid — $1,300
· Saturn Aura Hybrid — $1,300
· Mazda Tribute 2WD Hybrid — $3,000
· Mazda Tribute 4WD Hybrid — $2,200
· Ford Escape 2WD Hybrid — $3,000
· Ford Escape 4WD Hybrid — $2,200
· Mercury Mariner 4WD Hybrid — $2,200
· Mercury Mariner 2WD Hybrid — $3,000
· Chevrolet Malibu Hybrid — $1,300
· Saturn Aura Hybrid — $1,300
· Mazda Tribute 2WD Hybrid — $3,000
· Mazda Tribute 4WD Hybrid — $2,200
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And don't forget - victims of the dreaded AMT do not get the credit.
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* TICK MARKS’ Dan Meyer discusses what will prove to be an unsuccessful attempt to pass a special “war tax” surcharge to fund George W’s mess in Iraq, rather than passing the cost on to “our” grandchildren (not mine – no children) via continued increased national debt. He makes a good point about a possible “return next year as a potentially effective election-year campaign tactic”.
* TICK MARKS’ Dan Meyer discusses what will prove to be an unsuccessful attempt to pass a special “war tax” surcharge to fund George W’s mess in Iraq, rather than passing the cost on to “our” grandchildren (not mine – no children) via continued increased national debt. He makes a good point about a possible “return next year as a potentially effective election-year campaign tactic”.
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* The Market Watch daily email newsletter reports that “IRS Steps Up Scrutiny of Tax Strategy” – that tax strategy being like-kind exchanges (aka “1031 Exchanges”). According to the article, “The use of like-kind exchange has surged over the past decade as real-estate investors searched for legitimate ways to postpone, or avoid, taxes on big gains. According to the Treasury report, taxpayers filed more than 338,500 forms reporting like-kind exchanges in 2004, deferring more than $73.6 billion. That represented a doubling of the number of like-kind exchanges reported in 1998. The total dollar amount deferred 'more than tripled' in that time period.”
* The Market Watch daily email newsletter reports that “IRS Steps Up Scrutiny of Tax Strategy” – that tax strategy being like-kind exchanges (aka “1031 Exchanges”). According to the article, “The use of like-kind exchange has surged over the past decade as real-estate investors searched for legitimate ways to postpone, or avoid, taxes on big gains. According to the Treasury report, taxpayers filed more than 338,500 forms reporting like-kind exchanges in 2004, deferring more than $73.6 billion. That represented a doubling of the number of like-kind exchanges reported in 1998. The total dollar amount deferred 'more than tripled' in that time period.”
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As usual my timing is perfect – I haven’t done a like-kind exchange of real estate in over 20 years and now just when I have to deal with the issue on my big remaining multi-year project the IRS decides to look more closely at them! BTW Joe Kristan of ROTH AND COMPANY TAX UPDATE BLOG also discusses this issue.
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* The MILLIONAIRE MOMMY NEXT DOOR has compiled “110 Personal Finance Calculators: Fast Answers For Your Financial Questions” - a comprehensive collection, organized by category, of 110 personal finance calculators and helpful tools. As MMND puts it, “They're free, found online and designed to help you find fast answers to your financial questions”. A tip of the hat to Key Bell of DON’T MESS WITH TAXES for bringing this compilation to my attention.
* The MILLIONAIRE MOMMY NEXT DOOR has compiled “110 Personal Finance Calculators: Fast Answers For Your Financial Questions” - a comprehensive collection, organized by category, of 110 personal finance calculators and helpful tools. As MMND puts it, “They're free, found online and designed to help you find fast answers to your financial questions”. A tip of the hat to Key Bell of DON’T MESS WITH TAXES for bringing this compilation to my attention.
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