Saturday, October 10, 2009


* Trish McIntire tells it like it is in her post “October 15th Is Not April 15th” over at OUR TAXING TIMES. Be sure to read my comment on the post.

* Chad Bordeaux begins “a long series of posts that will explain the rules around Roth IRAs, as well as what the recent changes in the law means” at BEANCOUNTER RAMBLINGS.

* The TAX GIRL, aka Kelly Phillips Erb, brings up the issue of filing status at “Ask the Taxgirl: Filing Single When You’re Married” in which she is asked, “Can you file single if you are married?”.

Kelly properly answers the question thusly –

Easy answer: no. Your filing status is determined as of the last day of the tax year. So if you’re married on December 31 under the laws of your state, you’re married for tax purposes. Exceptions apply for same sex marriages (the feds don’t recognize these), widows and widowers, annulments and married persons who live apart but meet very tailored criteria.”

But then she goes on to say – “why would you want to file single? Generally speaking, it tends to be more advantageous to file as married filing jointly.”

There are a lot of reasons why a married couple would want to be taxed as two Single taxpayers. While there is in many instances a “marriage benefit” in the Tax Code, the “marriage penalty” is also alive and well, for the most part invoked when both spouses work.

* While we are talking about Kelly – FYI, she now also writes “for AOL’s finance site at”.

* Joe Kristan hits the nail on the head with the bottom line to his post “Tax Credits For All Good Things”.

Too many people think that if they want a good thing, all they have to do is pass a law, or a tax credit, that encourages the good thing, and good things will happen. It really doesn't work that way. If it did, we could just pass a ‘happy fun times tax credit’ and send Congress home. Though if they stayed home, it would be progress.”

* The New York Times reports that “Democrats May Extend Tax Credit for Homes”.

According to the item -

Extending and possibly expanding the popular home-buyers credit, which is due to expire after November, is high among options for further stimulating the economy and creating jobs, Congressional aides said, though a White House official said it was only briefly mentioned on Wednesday in an Oval Office meeting between President Obama, Speaker Nancy Pelosi of California and Senator Harry Reid of Nevada, the Senate majority leader.”

I guess a new batch of money trees have been located.

On this topic - this just in: According to “House Votes to Extend First-Time Home Buyer Tax Credit for Service Members” from US NEWS AND WORLD REPORT –

The House of Representatives voted 416 to 0 to pass the Service Members Home Ownership Tax Act of 2009, which pushes the credit's current November 30 deadline back an additional year for members of the military, Foreign Service, and intelligence corps who served at least three months of qualified overseas duty in 2009.”

* Robert W. Wood gives a good primer on the IRS statute of limitations rules and exceptions in “Even The IRS Has Time Limits” at FORBES.COM.

* Russ Fox has moved his blog TAXABLE TALK to a new location. Check out his new look, and, of course, the great information he provides.

* In addition to reporting on the NYS tax preparer registration program, which I discussed yesterday, the NATP weekly email tax newsletter also tells us that “IRS Sends Erroneous Form 941 CP Notices” –

Employers filing the paper Form 941, Employer's Quarterly Federal Tax Return, may have received erroneous CP207/207L notices.
The IRS discovered that during the scanning process, not all the information was collected on the Schedule B, Report of Tax Liability for Semiweekly Schedule Depositors, attached to Form 941 that caused a significant number of the CP207/207L notices to be mailed in error.

The problem has been corrected and should not be an issue for third quarter filings. The IRS asks that employers who received a CP207/207L notice in error to please resubmit the appropriate Schedule B along with the notice to the IRS as soon as possible to avoid additional erroneous notices

The weekly email newsletter is just one of many, many benefits of membership in the National Association of Tax Professionals. If you prepare taxes for a fee, regardless of your “credentials” or “initials” you should seriously consider membership. Click here for more information.

If you do decide to join, please mention my name (Robert D Flach) as a referral and I will get a gift!

*The Tax Foundation has released a “Fiscal Fact” report (No. 194) on “Where Do State and Local Governments Get Their Tax Revenue?”, which tells of the various state sources of income for fiscal year 2007.

The great Garden State, aka New Jersey, gets 41.7% of its revenue from property taxes, 22.7% from the state income tax, 16.8% from the general sales tax, 7.2% from “selective” sales tax, 6% from “licenses and other taxes” and 5.6% from the corporate income tax (actually a franchise fee).



Kelly said...

Hey Robert,
Thanks for the mention. I agree that there are reasons why you might want to not file jointly but in this case, she said she was a student and that she got married for insurance - the fact pattern leads me to believe that only her husband works. That's a classic "file jointly" scenario. ;)
See, that's the Nancy Drew in me...

Robert D Flach said...


Right you are - the taxpayer who posed the question would probably become a beneficiary of the "marriage benefit" by filing a joint return. Or if not her specifically then her husband.

More like Sherlock Holmes.