Wednesday, May 16, 2012

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

* At the invitation of blog author Peter J Reilly I provided my 2+ cents on his earlier post Divorce Lawyers - Frequently Not the Best Tax Advisors” with a guest post titled “Wandering Tax Pro On The Tax Aspects of Divorce”.

* Kay Bell reports on a recent analysis by Thumbtack.com that tells us “Friendliest States for Small Businesses? Idaho,Texas, Oklahoma and Utah” over at DON’T MESS WITH TAXES.

Small businesses are made the most welcome in Idaho, Texas, Oklahoma and Utah, according to a recent analysis by Thumbtack.com, in partnership with the Ewing Marion Kauffman Foundation.

Those four states each got an A+ grade from small business owners and managers.

Disappointing report cards went to California, Hawaii, Vermont and Rhode Island, each of which received an F.

New York eked out a D.”

For a change NJ was not last on the list, although “small businesses rank New Jersey among the top ten least friendly states for small business”. It got a grade of D+, which is better than NY!  Perhaps Chris Christie is making some progress.

* And Kay also tells us “Tax Refunds Smaller in 2012”.

This is actually misleading.  I believe the main reason for the reduced refunds is the disappearance of BO’s Making Work Pay credit, which was replaced for 2011 (and 2012) returns by the 2% reduction in employee Social Security withholding, and the mess it made of withholding. 

When taking the 2% reduction into consideration taxpayers actually put more money “in pocket”.  I found that many of my clients got twice as much or more via the reduction – and some taxpayers who did not get the credit due to level of income got $4,000+ “in pocket” via the reduction!

I posted on this topic on Tuesday at my THE TAX PROFESSIONAL blog.

* Trish McIntire provides a good overview of “Limited Parnerships” at OUR TAXING TIMES.  She ends the post with some good advice (highlight is mine) –

Limited partnerships are not for most investors. They are tax complicated and too often the broker selling them really doesn’t understand what they’re selling. It’s easy to get drawn in by the guaranteed distribution and assume that your investment is increasing in value when it’s actually decreasing because you’re just getting your money back.

Investor Beware!

Regular visitors to TWTP know that I hate Limited Partnerships because waiting for the K-1 often delays the return, and carrying the various K-1 items over to the various schedules and forms of the1040 is often a real PITA for the tax preparer. 

* Bruce, the MISSOURI TAX GUY, provides a “Blog Guide for New Small Business Owners”.

While you are there you should visit his Store.

* Prof James Maule discussed the new book “Tax Cheating: Illegal – But Is It Immoral?” by Donald Morris in his post “Tax Cheating and Tax Complexity” at MAULED AGAIN.

Jim once again eloquently describes the trouble with our current Tax Code (highlight is mine) -

There is no doubt, as Morris and many others assert, that the tax law is woefully complicated. There is no doubt it ought not be so complicated and need not be so complicated, and that at least some of the complexity is attributable to the campaign and other political games played by the legislators entrusted with the fiduciary duty of providing the nation with the best possible tax law. There also is not doubt that the pervasive complexity of the tax law causes taxpayers to make mistakes, even when they are putting forth their best efforts to comply.”

* Mary Beth Franklin provides some good advice in “Retirement: Avoid the IRA Tax Trap” at CHICAGO TRIBUNE BUSINESS.

She correctly points out that “when it comes to taxes, not all income sources are created equal” and joins many financial advisers in recommending “you diversify the taxability of retirement assets by spreading them among taxable, tax-deferred and tax-free accounts to manage cash flow during retirement”.

* If you suffer from BUZZ withdrawal between the Wednesday and Saturday entries there is always Joe Kristan’s “Tax Roundups” over at THE ROTH AND COMPANY TAX UPDATE BLOG.

THE LAST WORD:

Monday night Jay Leno told us about a study that indicates talking about oneself can provide as much pleasure as eating or sex.

In related news it was announced that Donald Trump is the happiest man on Earth.

TTFN

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