Saturday, September 22, 2012
WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’
* Jason Dinesen reinforces his good advice from an earlier post in “Tales from the Tax Field: Don’t ‘Start a Business’ Just to Get Tax Deductions” at the DINESEN TAX TIMES.
Jason talks about a client who “wanted to ‘start a side business’ to ‘get deductions’ to wipe out the $1,500” he owed the IRS.
The bottom line (the highlight is Jason’s) –
“Economically, it’s a horrible idea. Deductions don’t result in a dollar-for-dollar tax savings. The client was in the 25% tax bracket, so each dollar of tax deduction saved 25 cents. Even if they could have proven a profit motive, they would have had to generate business losses of $6,000 to eliminate a $1,500 tax liability. Spending $6,000 to save $1,500 makes no sense when you can just pay $1,500 and be done with it.”
* Learn the “10 Tax Questions the Candidates Don't Want You to Ask” and five common tax myths and misperceptions from John O. Fox.
* Joe Kristan explains “Why the Tax Law is So Picky About Documenting Travel Deductions” at the ROTH AND COMPANY TAX UPDAGE BLOG.
“The Moral? If you want to deduct travel, meal and entertainment expenses, keep your receipts. If you use your own car, log your miles. For all expenses, write down who you are meeting with and the business purposes. Even when the expenses are legitimate, if you fail to document them properly, they are gone.”
A good moral for ALL deductible expenses – “keep your receipts”!
* CPA Joshua Wilson gives us some “2012 Year-End Tax Planning Ideas”.
* And along the same line, Jean Murray advises businesses to “Take Advantage of 2012 Depreciation Rates - Who Knows What They Will Be in 2013?” at ABOUT.COM US BUSINESS LAW/TAXES.
* NPR.ORG discusses a subject that I remember supporting back in my younger days, but really have not though about for a long time now, in “Pot Could Be Tax Windfall, But Skeptics Abound”.
Certainly something to think about.
* Chad Bordeaux talks about “Renting Your Vacation Home” at OUR BLOG.
* Click here to check out the Form 1040 from 1913 through 2011, and to view Presidential income tax returns from FDR and Richard Nixon through Barack Obama and Mitt Romney courtesy of EFILE.COM.
* TAXPRO TODAY advises that “Congress Considers Changing Tax Treatment of Capital Gains”.
“Congress’s two tax-writing committees, the House Ways and Means Committee and the Senate Finance Committee, held a joint hearing Thursday to discuss capital gains taxes and how they might be reformed.”
Senate Finance Committee Chairman Max Baucus, a Democrat, is quoted as stating the obvious -
“Our entire tax code—including its treatment of capital gains—needs to be rebuilt for the 21st century economy. We need a system focused on broad-based economic growth and jobs. In order to get tax reform done, we’ll need members of both parties and both chambers willing to tackle the tough issues.”
Unfortunately, for one thing, Baucus is a Democrat, who merely give lip service to tax reform, and for another, the idiots in Congress haven’t been able to tackle even the easy issues properly.
In reading the item I was truly shocked to hear tax cheat Chuck Rangel actually say something smart - "Everyone wants reform as long as it doesn't affect them."
* Friday’s Tax Roundup from Joe Kristan of the ROTH AND COMPANY TAX UPDATE BLOG provided an excellent quote from fellow tax blogger Prof Jim Maule (of MAULED AGAIN) that explains the effect of “tax expenditures” –
“When a special interest or specific industry gets a tax break, it causes one or the other, or a combination, of two things to happen. First, if nothing else is adjusted, the reduction in tax revenues causes an increase in the federal deficit, which in turn adversely affects everyone. Second, if revenue is maintained, it means other taxpayers must pay more in taxes to make up for the reduction in taxes for the special interest or specific industry, and that clearly affects everyone.”
And, while I think of it, a thanks and tip o’ the hat to Joe for regularly referencing my TWTP posts in his Roundups
THE FINAL WORD
I would like to pose an open question to all of “Blogdom”.
Inquiring minds want to know -
Can anyone justify the existence of reality tv excrement such as THE JERSEY SHORE, BIG BROTHER, KEEPING UP WITH THE KARDASHIANS, THE REAL WORLD, THE BACHELOR or BACHELORETTE, THE REAL HOUSEWIVES OF ANYWHERE, SPOOKIE AND BOW WOW, or any of these type of programs? Do they have any “socially redeeming value”? Do they have any value whatsoever?