Saturday, July 12, 2008

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

* A MarketWatch.com article has some good advice - “Rollover For Retirement: If You're Switching Jobs, Don't Be Tempted To Cash Out Your 401(k)”. Your 401(k), or other retirement funds, should be the very last place you turn if you need money.

I remember years ago when there was a slump in the construction industry. Our office was across the street from the local Ironworkers Union office and many members became clients. In order to “make ends meet” several took withdrawals from their union retirement annuity fund, of course with no or minimal income tax withholding. When tax time came around and they did not have the money to pay the federal and state income taxes, plus the 10% premature withdrawal penalty, on the distribution they had taken these guys dipped into the fund again, which resulted in additional federal and state taxes and premature withdrawal penalty. And so on.

* Bruce THE TAX GUY discusses “The Envelope System” of tax record keeping in his post “Audit Insurance”. This "Envelope System” is one that I, and many other tax preparers, have been telling our clients to use to keep track of possible deductible expenses during the year. I have even toyed with creating and marketing a loose-leaf book version of this system – and may still do this at some point in the future.

* Joe Kristan of the ROTH AND COMPANY TAX UPDATE BLOG reports on the volume of changes to the Tax Code during the Bush the 2nd years in his post “That’s How They Say They Aren’t A 'Do-Nothing' Congress”.

* A couple of years ago one of my clients, a fireman, ran for Mayor of his local suburban municipality. While the client himself did not pose the question, I myself did consider whether or not any of his “out of pocket” campaign expenses were deductible – from the point of view of “job-seeking”. I came to the same conclusion as TAX MAMA Eva Rosenberg in her post “Political Candidate Expenses”.
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* As you know, or should know, I neither post to my various blogs nor do I read postings to other tax blogs during the tax filing season (February 1 – April 15). In the course of my daily “wanderings” on the web on Friday I came across the title of an entry from this past February by TAX GIRL Kelly Phillips Erb on a listing of posts related to the “stimulus” rebates that caught my eye – “Money for Nothing and Your Checks For Free: Is There Something More to Tax Rebates?
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The post looks at the question of why individuals have to file a 2007 federal income tax return in order to get their rebate check and wonders, “Is it possible that the filing requirement is actually meant to “encourage” more taxpayers to file?
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I agree with her conclusion that “I don’t believe that Congress puts all that much thought into the best method to lure taxpayers into filing tax returns”. To be perfectly honest I don’t think Congress puts all that much thought into most of the legislation they write. However the post brings up some interesting questions and issues and reports some interesting statistics on non-filers and non-payers – for instance “The Tax Foundation reports that the total of the non-filers and those that paid nothing comprise 41% of the US population.”
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* Kay Bell does a thorough job of bringing us up-to-date on various tax and rebate-related scams in her post “They're Baaaaccccckkkkk!” over at DON’T MESS WITH TAXES.

* FYI, my ASK THE TAX PRO post “Using the IRS As Your Bank” has appeared in 2 Blog Carnivals so far this week - “
Money Hacks Carnival #19 — Personal Finance Destinations” at MONEY HACKERS NETWORK, and “Finance Fiesta: No Debt Plan Edition” at NO DEBT PLAN, a personal finance blog teaching you how to live debt free and use credit wisely, where it received an “Honorable Mention”.

* Did you check out my answers for two (2) New Jersey state income tax questions in Friday’s post to ASK THE TAX PRO?

TTFN

2 comments:

Bruce said...

Hello Robert,
Thanks for the mention.
Bruce
"the tax guy"

Robert D Flach said...

Bruce (aka TTG) -

I only recently discovered your tax blog, and have found it to be interesting and informative.

As you can see I have included it in my "blogroll" of tax blogs.

TWTP