Saturday, December 10, 2011
WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’
Another FU by Republican presidential candidate Rick Perry -
Yesterday’s USA TODAY reported that Perry wisely bowed out of the upcoming Donald Trump-hosted debate. However, instead of “calling a spade a shovel” like some of his fellow candidates (“I’m not going to kiss his ring and I’m not going to kiss any other part of his anatomy. . . The Presidency of the United States of America is more important than the silly game shows and reality shows.” – Huntsman), Perry offered a lame excuse, and said that he “respects” Trump.
Any person who “respects” the Donald, and does not publicly acknowledge him for the useless egomaniac he is, has no place in the White House. But I would not want Perry as President anyway. Read my lips – no Texas governors! The last one that occupied 1600 Pennsylvania Ave was a disaster.
+ Check out the December issue of LOIS.
+ And check out my “slide show” on “10 Tax Deductions to Squeeze In Before 2012” at MAINSTREET.COM.
+ Trish McIntire tweets, “Not again! April 15th is April 17th because of weekend and emancipation day.”
+ Kay Bell covers several related topics in her post “Payroll Tax Could Postpone Congress' Christmas; Solve the Problem by Eliminating the Social Security Wage Base” at DON’T MESS WITH TAXES.
First off – the idiots in Congress deserve a Blue Christmas for their laziness and inability to work together. They should get nothing but coal in their stockings!
As for raising, or eliminating, the Social Security wage base –
When I first started doing payroll the wage base was $14,100, and it applied to both the Social Security and Medicare components of the FICA tax. It was common back then for employees to exceed the wage base (FYI - the upper wage limit for the Medicare component was eliminated in 1994). The additional money in employee paychecks for November and December were like a Christmas bonus.
If the wage base for the Social Security component is to be eliminated it would only be fair that either the retirement benefits for upper income individuals be increased accordingly or the tax rate be reduced.
+ Kathy Bylkas, YOUR TAX LADY, talks about the 2011 Residential Energy Credit in “IRS Issues Energy Reminder”.
She brings up an important point for those looking to claim the credit (the highlight is mine) -
“The IRS cautions homeowners to check the manufacturer’s tax credit certification statement before purchasing or installing any of these improvements. The certification statement can usually be found on the manufacturer’s website or with the product packaging. Not all energy-efficient improvements qualify for the tax credits. The manufacturer’s certification is different from the Department of Energy’s Energy Star label, and not all Energy Star labeled products qualify for the tax credits.”
Here is what I say about the topic in my annual January memo to clients –
“When sending me your stuff do not just include a copy of the bill for one of the above items, or a note that you “spent $800 for a new hot water heater”, and expect me to determine if the purchase qualifies for the credit. You must verify that the purchase qualifies if you want me to claim a credit!
When you purchase any of the listed items ask the salesperson for a Manufacturer’s Certification Statement - a signed statement from the manufacturer certifying that the product or component qualifies for the tax credit.
If you have already purchased an item that you think may qualify, but do not have a Manufacturer’s Certification Statement, go back to the where you purchased the item and ask one. You may be able to go to the website of the item’s manufacturer and download a Certification Statement.
You can go to the Energy Star website to find out what the specific qualifications are for individual items –(http://www.energystar.gov/index.cfm?c=tax_credits.tx_index).
You are not required to attach a copy of the Manufacturer’s Certification Statement to your tax return – but you are required to send me a copy of the statement, or some other verification that the item qualifies, if you want me to claim a credit.”
+ Kathy also covers gift tax rules in “There’s Still Time to make 2011 Tax-Free Gifts”.
+ Richard Wolf goes into more detail on temporary tax cuts in “'Temporary' Tax Cuts Plentiful, and Often Long” at USA TODAY.
The article quotes CCH analyst Mark Luscombe -
"Some have even suggested that the growing list of regularly expiring provisions is an effort to keep lobbyists having to come back to curry favor with congressmen and provide campaign donations.”
Congresscritters may be idiots, but they ain’t necessarily stupid!
Temporary tax cuts (except perhaps those in response to natural disasters), like refundable tax credits, are bad.
+ Over at FORBES.COM TWTP fan Peter J Reilly gives us the word that “Hawaiian Civil Unions Will Be Same as Marriage for State Income Taxes”.
“The Attorney General of Hawaii has issued an opinion on the income tax filing requirements of civil union partners for years beginning after December 31, 2011. The AG ruled that civil union partners will be treated as if they were married.”
+ Also as FORBES.COM Kelly Phillips Erb, aka TAX GIRL, says that “IRS Moves Ahead Assuming No Change in 2012”.
“This week, the IRS released Notice 1036 (downloads as a pdf) outlining the percentage method income tax withholding tables and the Social Security withholding rate for 2012.”
A consequence of the idiots in Congress being unable to work together and waiting until literally the last minute to deal with “extenders” is the fact that IRS must waste money reprinting and distributing such notices and publications with corrected information after the idiots finally act.
And it causes delays in software revisions, which could cause errors in paychecks and unnecessary agita for payroll processors and managers.
Just another problem with temporary tax breaks.
+ Christopher Bergin makes some good points in “What's Fair? A Dangerous Game” at TAX.COM.
For example –
“If a billionaire paid a 1% effective income tax rate, that would mean that he or she paid $10 million in income taxes alone, assuming they had one billion dollars in income.”
“I’m also not sure it’s fair that many of us who earn income pay no income taxes. In other words, is it fair that almost a majority of income earners don’t pay their share – whatever that is – for government services?”
And his bottom line -
“So what’s my point? My point is that fairness in our tax system is not a simple issue and shouldn’t be treated as one. The more we voters know about the tax system the better it is for all of us.”
THE FINAL WORD:
A driver is stuck in a traffic jam in Washington DC . Nothing is moving! Suddenly, a man knocks on the car window.
The driver rolls down his window and asks "What's going on?"
“Terrorists down the road have kidnapped all the members of our Congress”, the man explains. “They're asking for $10 million in ransom. If they aren’t paid they are going to douse them with gasoline and set them on fire! We're going from car to car taking up a collection."
The driver asks "How much is everyone giving, on average?"
''Most people are giving about two gallons!"
FYI – I am off to Atlantic City for the annual NATP year-end tax update workshops. I will be gone all next week – so no posts here or at THE TAX PROFESSIONAL. I will report on what I learned when I return.