Saturday, December 1, 2007

WHAT’S THE BUZZ – TELL ME WHAT’S A HAPPENNIN’

* Republican Presidential candidate Fred Thompson, of LAW AND ORDER FAME, has announced his tax plan.

Thompson would repeal the estate tax, repeal the alternative minimum tax, lower corporate rates considerably, permanently extend all the Bush tax cuts, permanent extend more expensing for businesses, and adjust depreciation schedules (presumably providing even more upfront deduction for long-term assets) for the “regular” tax and offer an optional alternative flat tax system.

It appears that Thompson is talking about the Taxpayer Choice Act that I talked about in my posting “Verrrry Interesting….” back in October.

As I said in my original posting on the proposal, why should taxpayers have a choice of tax “systems”? Why not just make the new flat system apply to everyone?
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* Kelly Phillips Erb, the TAX GIRL, agrees with me that the federal government should institute a Tax Amnesty program, similar to those successfully run by the states for years now, to collect back taxes in her posting “Does Amnesty Make Sense?” See my various comments to the post.
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* Oi vey! Kay Bell of DON’T MESS WITH TAXES reports that Mark Everson, who quit as Commissioner of the Internal Revenue Service to become President of the American Red Cross, was fired by the Red Cross because “he had engaged in a "personal relationship" with a subordinate employee”. Click here to read an article on the subject. KPE at TAX GIRL also discusses the issue.
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* The 20-something grad student who writes the blog INTERESTING MONEY provides some help for “
Opening a Roth IRA on a Budget”. While someone just starting out in the workplace can contribute up to $5,000.00 for 2007 and $6,000.00 for 2008, many such individuals cannot afford to set aside such a large chunk of their take-home pay. The important thing is to get into the habit of making an annual contribution. Depositing $500.00 or less for the first few years is a great idea, with annual contributions increasing as your income goes up. Even if you only contribute $500.00 each year to a ROTH IRA you will generate a substantial tax-free retirement nest-egg, as long as you start young and make the contribution each and every year. Lower-income taxpayers may be able to have “Uncle Sam” finance 10% to 50% of their IRA contribution via the Retirement Savings Contributions Credit.
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* CNN discusses both Democratic and Republican
Presidential candidates' views on Social Security reform in its article “The 3rd rail: Candidates take on Social Security”.
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* Kathy Howell, author of the TAX Q+A blog at OregonLive.com, answers a question that we tax professionals are often asked – “Can My Fiances Claim Me On His Tax Return?”. Actually, the question is generally asked as “Can I claim my girl friend?”. In the case of the person asking the question, the fiancĂ© would not be able to claim her as a dependent because her earnings, $8,000, is more than the $3,400 limitation. This limitation is based on the personal exemption amount, which is $3,400 for tax year 2007.
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TTFN

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