Saturday, September 29, 2012
WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’
* See my article “Last Chance Tax Break: Get Your Free Investment Income” at THESTREET.COM.
* In its Tax Tip “Ten Tips to Help You Choose a Tax Preparer” the IRS provides some good advice on the responsibility of taxpayers -
· Provide all records and receipts needed to prepare your return.
· Never sign a blank return.
· Review the entire return before signing it.
· Make sure the preparer signs the form and includes their PTIN.
I was led to this Tax Tip by a “tweet” by the IRS, which also properly explained –
“You are responsible for your tax return, no matter who prepares it.”
* Over at OUR TAXING TIMES, Trish McIntire follows up on my THESTREET.COM item “How to Protect Charitable Donations From IRS Nitpicking” with “Out of Pocket Charity Deduction”, which discusses deductible volunteer expenses.
In light of IRS and Tax Court “nitpicking” if you do volunteer work that results in out of pocket deductible expenses it couldn’t hurt to have the charity write you a letter of thanks at year end detailing your volunteer work.
Something like –
“Thank you for volunteering to deliver meals to shut-ins for the Pike County Meals on Wheels Program.
During the months of July through December of 2011 you used your own car to deliver hot cooked meals to home-bound seniors in Hawley and Hamlin on Tuesday and Thursday afternoons, for which you received no compensation or reimbursement from the Program.
Your volunteer work for us is truly appreciated.”
Like I said – it couldn’t hurt.
* Daniel Hood tells us that even “Federal Agencies Fail to Pay Taxes” at TAXPRO TODAY.
“The report, by the Treasury Inspector General for Tax Administration, noted that as of the end of 2011, 70 different federal agencies had 126 delinquent tax accounts owing around $14 million, while 18 federal agencies had not filed or were delinquent in filing 39 employment tax returns.”
* At MONEY.CNN.COM Jeanne Sahadi warns us to expect a 2% cut in pay come January in “Fiscal Cliff: Payroll Tax Cut May Not Survive”.
“For all the uncertainty over how lawmakers will handle the expiring tax cuts under the fiscal cliff, there seems to be growing clarity surrounding at least one measure: the temporary 2% payroll tax cut.
Bottom line: It's likely toast.”
This payroll tax cut was the latest incarnation of Dubya’s tax rebate fiasco. The rebate first became the Making Work Pay credit, which totally FU-ed income tax withholding for a couple of years and especially hit pensioners - and then became the 2% reduction of Social Security withholding, which was actually a better way to distribute the funds than a rebate or income tax credit.
While I was thrilled for my clients – because two-income couples earning a combined $200,000 + in wages, who would get nothing under the rebate or MWP credit, now could get up to $4,000+ “in pocket” thanks to the reduction – I felt that this was not a good thing. If you want to put more money in taxpayers’ pockets simply reduce the tax rate.
As with any “temporary” tax cut or benefit, when it expires (and not extended) it appears to be a tax increase.
While I am sorry I, and my clients, will get a 2% pay cut in 2013, such temporary political gimmicks are not the way to go.
THE FINAL WORD –
I recently submitted the following question to ASK AWAY TODAY –
“Having interviewed kings, presidents, actors, heroes, and local persons with legitimate stories of value, how do you feel being forced to waste time interviewing reality show "stars" with no talent and nothing of value to say?”
I wonder if my question will be chosen?