And the post explains why if you could put your home in the name of your business you certainly wouldn’t want to.
* I announced that there is a “New Director for NJ Division of Taxation” at my NJ TAX PRACTICE BLOG.
* I also announced that the NJDOT has begun to mail out Property Tax Reimbursement checks in the NJ TAX PRACTICE BLOG post “The Check Is In The Mail!”.
* The Tax Foundation’s TAX POLICY BLOG tells us that “Seniors Earn Lion's Share of Dividend Income According to New IRS Data”.
“Overall, taxpayers over age 55 account for 71 percent of all dividend income earned. The lion's share of dividend income - 48 percent - is earned by those over 65, and dividend income accounts for 6 percent of all the income earned by these taxpayers.”
The post points out that this information – “sheds light on how seniors will be impacted if the current 15 percent tax rate on dividend income is allowed to expire at the end of 2010 and dividends revert to being taxed at the personal income tax rate, which could go as high as 39.6 percent”.
* Perhaps in response to the above referenced IRS data, according to BNA SOFTWARE, “Baucus Sees Need to Prevent Dividends From Being Taxed at Ordinary Rates”.
“Senate Finance Committee Chairman Max Baucus (D-Mont.) said July 13 that he intends to seek middle ground with other lawmakers in the coming months in an attempt to keep dividends tax rates from returning to the ordinary income tax rate at the end of the year.”
* A “tweet” led me to this article from KIPLINGER.COM – “Six Tax Breaks for Small Business” – which discusses tax relief for small business that Congress is considering.
"Self-employeds would also get help, in the form of a long awaited easing. They would be allowed to deduct their medical coverage on Schedule C, lowering their SECA tax. Right now, they can deduct it only against income tax. But this would be a one-year break -- for 2010 only .”
One of the methods to pay for the bill gets a definite “thumbs down” –
“The 1099 filing rules would be applied to landlords. Starting in 2011, they’d have to issue a 1099 if they paid a service provider $600 or more a year.”
Another income generator is certainly worth considering –
“And balances in 401(k)s could be rolled directly into the plan’s Roth 401(k). Ditto for 403(b)s and 457 plans. As when an IRA is converted to a Roth, the income from a 2010 conversion could be deferred, with half of it taxed in 2011, the rest in 2012.”
* TAX GIRL Kelly Phillips Erb reports on a bi-partisan estate tax proposal in her post “Federal Estate Tax Gets Some Interest”.
This proposal sounds pretty good to me. I especially like the part where “Basis for assets would be ‘stepped up’ at death, just as it was before 2010.” For me this is the only reason to keep some kind of estate tax in place. Carry-over basis would be disastrous for all involved.
And I do agree with Kelly that it is good someone in Congress is trying to do something about the estate tax. As she says – “I mean, it’s better than the ‘let’s do nothing and keep them guessing’ plan that we’ve gotten used to…”
* The CCH daily tax headline e-letter indicates “Same-Sex Married Couples Allowed to File Joint Returns”.
According to a US. District Court decision in N. Gill v. Office of Personnel Management, DC Mass., 2010-2 USTC –
“Same-sex married couples were allowed to file joint federal income tax returns and have access to other federal benefits available to married couples.”
Same-sex couples who have been legally married under state law have not been able to file joint federal income tax returns because section 3 of the Defense Of Marriage Act “defines, for federal law purposes, a marriage as a legal union between one man and one woman, and a spouse as a person of the opposite sex who is a husband or wife”. However, the court found –
“Section 3 of the Defense of Marriage Act (DOMA) violates the equal protection principles of the Fifth Amendment's due process clause.”
I am surprised that there has not been more discussion of this court decision around the tax “blogoshpere”.
So now same-sex couples have the same right to pay the “marriage tax penalty” as “traditional” married couples.
* A subsequent CCH e-letter advised that “Senate Tax Panel Discusses Future of 2001 and 2003 Tax Cuts”.
“A panel of economic experts testified before the Senate Finance Committee on July 14 on the pros and cons of extending the tax cuts enacted in 2001 and 2003.”
Check out the item to see what they had to say.
* No BUZZ would be complete without a visit to DON’T MESS WITH TAXES. Speaking of the SFC hearing, Kay Bell comments on what these “economic experts” had to say in her post “Tax Cuts or Total Tax Reform?”.
My vote goes to total tax reform!
* Tonya Moreno gives us “Tax-Free Shopping in 2010: A List of Sales Tax Holidays This Year” over at ABOUT.COM: TAX PLANNING: US.
I don’t see New Jersey, New York, or Pennsylvania on the list, and the Texas sales tax holiday is too late to do me any good.
* WEBCPA provides the word that “IRS Undeliverable Mail Costs Millions”.
According to the article a May report by the Treasury Inspector for Tax Administration “found that the IRS sends out approximately 200 million notices and letters each year to individual and business taxpayers and their representatives at a cost of $141 million. In 2009, approximately 19.3 million of those mailings were returned to the IRS at an estimated cost of $57.9 million.”
And, as I have said often in the past, based on my 39 tax seasons of experience more than half (I am being conservative) of IRS notices are incorrect to begin with.
* There has much talk about “sin taxes” around the tax blogosphere lately as a result of the new tanning tax. REUTERS tells us that “U.S. Pockets $20.6 Billion in Sin Taxes”.
* Professor Annette Nellen looks at “Hope vs. Opportunity: Higher Education Tax Incentives” and compares both credits to “reality” in her article at the AICPA TAX INSIDER. She also looks at tax credits for college tuition in terms of recognized principles of good tax policy.
She ends a brief post about her article at her 21st CENTURY TAXATION blog with the following opinion –
“I'd like to see these incentives pulled from the tax law where they really don't work well. The funds aren't available when tuition is due, they provide benefits to many people who really don't need them while others struggle to get to and stay in college, the federal government already has various programs for helping students pay for college, and they complicate the tax law.”
She then asks, “What do you think?” – and I echo the question.
I am off to Austin TX tomorrow afternoon, returning on Friday. “Talk” to you when I get back!