* Joe Kristan is right on when he quotes from “The best summary of the ills of the federal income tax” in his post “How the Tax System Has Gone Off the Rails” at the ROTH AND COMPANY TAX UPDATE BLOG.
* And check out Joe’s post “Learning at the Feet of the Master” which illustrates how “The boss sets the office culture”.
* I almost missed this item from back in April. Russ Fox tells us “Another List, Another Bad Score for California”.
“Another list of business climate, this one from the Small Business & Entrepreneurship Council, ranks the best and worst states for small business owners”.
Russ mentions that California is on the bottom - #48. But New Jersey is #50 – the absolute worst business climate for small business owners New York is #49). Only the District of Columbia is worse. No surprise there.
South Dakota and Nevada are #1 and #2.
Russ points out “the top six states share a common factor”. Check out the post to find out that factor.
* “High-Earning Households Pay Growing Share of Taxes”, a WALL STREET JOURNAL article by John McKinnon, tells us –
“A 2008 study by the Organization for Economic Cooperation and Development, for example, found that the highest-earning 10% of the U.S. population paid the largest share among 24 countries examined, even after adjusting for their relatively higher incomes. ‘Taxation is most progressively distributed in the United States,’ the OECD study concluded.
Meanwhile, the percentage of U.S. households paying no federal income tax has been climbing, and reached 51% for 2009, according to a new analysis by the Joint Committee on Taxation. That was the first time since at least 1992 that more than half of households owed no federal income tax, according to JCT estimates.”
And further the JCT analysis “concludes that about 30% of taxpayers received money from the government through tax credits”.
* Andy at SAVING TO INVEST discusses the oft-asked question “Should You Pay Off Your Mortgage Early or Invest The Extra Cash?”
Personally I have always tended toward paying off your mortgage early.
I have also had clients in the past who actually took out a home equity loan to get money to invest in mutual funds. While this may work if you can get a return on the investment that is several points higher than the mortgage rate, and if the return is realized via capital gain distributions and long-term capital gain taxed at the lower rate, and if the market doesn’t suddenly tank, it is a dangerous game and one that is not for the serious and experienced investor.
I must point out that an addition to the CON about losing the tax deduction is the fact that interest on acquisition debt is deductible up to $1 Million of principal, while interest on home equity debt is deductible only up to $100,000. Once you pay off your mortgage in full you no longer have acquisition debt (unless you borrow to substantially improve the residence) and if you need to borrow against the property again interest will be deductible only on up to $100,000 or principal.
* The IRS provided a good reminder to taxpayers in “Five Tips if You Changed Your Name Due to Marriage or Divorce”.
If you have changed your name due to marriage or divorce, and used the new name on your Form 1040 (or 1040A), but did not change your name with the Social Security Administration you are open to much potential agita from the IRS.
* Trish McIntire has announced she is "Starting A Business Series" of blog posts at OUR TAXING TIMES.
“This series should provide insight into the basics of starting your own business. It won’t answer all of your questions but it will point you to resources and give you things to think about.
I will be focusing on a 'mom and pop' type startup. The owner could be a guy starting his own repair service after years of working for someone else, the great cook who wants to open a catering business, the local retail shop, or a tax preparer. Full or part time, the basics are the same. And this series will stick with the basics.”
I look forward to following the series as it unfolds.