WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’ – WEDNESDAY EDITION

AND I THOUGHT I WAS ADDICTED TO BLOGGING!

* JOE TAXPAYER’s “This Week’s Roundup” led me to an answer to the question “What is a Charitable Gift Annuity?”, a guest post written by Benjamin Clark at CHRISTIAN PF.

As Benjamin explains –

“The basic premise of the charitable gift annuity is the donor gives a gift to the charity and the charity agrees to pay an annual annuity to the beneficiary for the remainder of the beneficiary’s life. Upon the beneficiary’s death, the agreement terminates and the charity is under no further obligation.”

* Shannon Buggs of the HOUSTON CHRONICLE is correct when she says “It's Better to Break Even”.

She is, of course, talking about breaking even when you file your Form 1040 (or 1040A).

“If you get the withholding amount just right, you can wind up on Tax Day not having to write a check for additional taxes owed. In the end, the goal of tax planning is to pay as little in taxes as legally possible.

Please notice I did not write that the goal is to collect the biggest refund check you can.

But people with middle and high incomes who get refunds are making no-interest loans to the government and just getting back the money they could have been using sooner.

Yet about three of every four American households — more than 100 million taxpayers — get refunds averaging about $2,700.

That's a big chunk of money they could have been saving, investing, spending or giving to charities over the course of the year.

And if they had been using that money in any of those ways, those households would have been boosting the economy.”

While I do agree with what Shannon is saying, considering the pitiful state of interest on liquid savings I also do understand why some of my clients use excess withholding as a form of “forced savings”, and I also understand the, while illogical, psychological pleasure of a big refund.

* Kay Bell keeps us up-to-date on the status of health care “reform” in her post “Health Care Debate is On!” at DON’T MESS WITH TAXES.

She tells us that the already-passed House version of the Health Care bill is 2000+ pages, and the not-yet passed Senate version is “right now is more than 2,000 pages. What finally is approved, if anything, could be even bigger.”

* And over at her other blog – EYE ON THE IRS at Bankrate.com – Kay reports on some “Black Friday Tax Holidays”.

* Trish McIntire warns newly marrieds about an unexpected surprise that they may get at tax time in “Wedding Bell Blues” at OUR TAXING TIMES. The marriage penalty for a two-income couple is alive and well!

I have always advised dual income couples to marry early in the year. You are considered married for tax purposes for the entire year if you are legally married on December 31st. So, if you are going to pay the tax penalty for being married you might as well “get your money’s worth” and enjoy the “benefits” (such as they are) for as long in the year as possible.

* Tax lawyers usually are called upon to help taxpayers, especially corporations, with problem audits. But the corporations of tax lawyers can also be audited. So Kelly Phillips Erb tells us in her post “On the Other Side of the Table”. It seems that Kelly’s law firm is being audited!

Kelly has a healthy attitude about the whole thing. She says, “There’s no use being freaked out about it – advice that I give my clients (and my readers) and advice that I’ll stand by”.

And, “I’m trying to take something positive from the whole mess. Besides blog fodder (how convenient is that?), it is giving me some additional perspective from the client side – and that can only be good, right?”

Good luck, Kelly!

* Joe Kristan, author of the ROTH AND COMPANY TAX UPDATE BLOG, reminds business owners that, while a wink is the same as a nod to a blind horse, “'Bought' Isn't the Same as 'Placed in Service'”.

“Deductions for fixed assets -- depreciation and Section 179 deductions -- don't necessarily start when you buy an asset. They are only available when the asset is ‘placed in service’.’”

Joe goes on to tell about a court case where a taxpayer used this rule to his advantage.

The bottom line of the post is one that is especially applicable at this time of the year –

“That's a taxpayer victory here, but it also implies a warning to taxpayers: if your machinery is still in shipping crates needing to be put together at year-end, it's probably not yet eligible for depreciation or Sec. 179 deductions. If you want the deduction this year, get it out of the box and hook it up!”

* Don’t be surprised if the Social Security number that appears on a 1099 you receive next January looks like this – “XXX-XX-1234”.

Bill Perez tells us about an IRS pilot program in which “Your Social Security Number May Be Truncated” over at WILLIAM’S TAX PLANNING BLOG.

* I no longer exchange gifts – but when I did I stayed home on Black Friday and did my shopping online. If I were still buying gifts I would be checking out the items in this message I recently received.

TTFN