Wednesday, August 22, 2012
WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’ – WEDNESDAY EDITION
* Did you see my article “Yes It’s Tax Deductible, But . . .” at THESTREET.COM?
* Congratulations to Kay Bell, the yellow rose of taxes, for having her blog DON’T MESS WITH TAXES named a 2012 Association for Women in Communications Clarion Award winner!
* Joe Taxpayer has a great idea at his ROTHMANIA blog – “Let’s Kill All the Lawyers!”. When do we start?
This post is another reason for what I consider my best tax advice – DON’T ACCEPT TAX ADVICE FROM ANYONE OTHER THAN A PROFESSIONAL TAX PREPARER.
Joe discusses a question from a reader. Included in the explanation of the reader’s situation is the totally incorrect advice given by a lawyer – which would have cost the taxpayer over $100,000 in current income taxes unnecessarily.
The IRS tax preparer regulation regime may consider all lawyers to automatically be tax experts, and therefore exempt from testing and CPE requirements in order to prepare tax returns for compensation – but we know full well that this is pure “basuda” (a word I remember from my high school Spanish – though I am not sure of the spelling).
Joe correctly points out –
“Unfortunately, I don’t know how many people are getting this kind of bad advice, I just know it’s all too common. Fortunately, I was contacted before a bad mistake was made, too often I hear these stories well after the fact. People go to a pro thinking they are doing the right thing, only to find out the pro is shall we say, uninformed.”
If I may be permitted to repeat myself - DON’T ACCEPT TAX ADVICE FROM ANYONE OTHER THAN A PROFESSIONAL TAX PREPARER!
* The TAX FOUNDATION’S “Monday Map” this week answered the question “Does Your State Have a Marriage Penalty?”.
Nick Kasprak explains -
“In a progressive tax system, higher incomes are taxed at higher rates, and in states where the same tax brackets apply to both single and married filers, the effective tax rate on the combined income of two earners can be significantly more than if the two incomes were taxed separately. In 2011, sixteen states had some form of marriage penalty in their income tax system.”
The map shows that the state income tax of my former state of residence, New Jersey, has a marriage penalty, while my new state of residence, Pennsylvania, does not. That is not one of the reasons why I moved (my filing status is Single). I have found, however, that many NJ married taxpayers can avoid the marriage penalty by filing separately – but, generally, one must file separate federal returns in order to file separate NJ state returns.
* While on the subject – check out “TPC’s New Marriage Bonus and Penalty Calculator” at TAXVOX.
* PLANET MONEY from NPR has some interesting facts in “From Abe Lincoln To Donald Duck: History Of The Income Tax”.
* Patrick Temple-West and Kim Dixon of REUTERS provide another reason why I will never refer to the members of Congress without calling them idiots - “Inaction In Congress Could Delay Tax Refunds”.
“Congress could delay billions of dollars in 2013 U.S. tax refunds, dealing a blow to the economy, if it waits too long after the November 6 elections to finalize tax law, a top tax oversight official said.”
Can you think of a better word to describe them?