Tuesday, June 11, 2013

WHAT’S THE BUZZ, TELL ME WHAT’S A HAPPENNIN’ - TUESDAY EDITION


* MISSOURI TAXGUY Bruce McFarland explains “Employee vs. Contractor… How to Tell”.
 
* A @Tax Policy Center tweet explained “A hit man can deduct his cost of doing business. So can a prostitute. But firms that sell medical marijuana cannot.”  Howard Gleckman pleads “Let Legal Marijuana Dispensaries Deduct Their Business Expenses” at TAXVOX, the Tax Policy Center’s blog.

* Find out what charities you should NOT donate to.  The CENTER FOR INVESTIGATIVE REPORTING discusses the “Dirty Secrets of the Worst Charities”.

* Tom Herman of the WALL STREET JOURNAL deals with a question I have often heard asked over the years in “Working Seniors Must Still Pay Tax”.

Q: I am 72, retired and went back to work. At what point do I not have Social Security tax deducted from my pay? 

Actually I have more often heard it in a different way.  A worker age 72 or older demands that payroll (sometime me) stop withholding Social Security tax from their wages – he/she is age 72 and no longer has to pay Social Security tax.

From the day you are born till the day you die you must pay Social Security (and Medicare) tax on all taxable wages.  It doesn’t matter if you are 2 years old or 97 years old.  There are no age limitations on the requirement for FICA withholding.

The confusion comes from the old rules that at age 72 you could have unlimited earned income and not have to pay back Social Security benefits.

* A “tweet” from @PARKER TAX UPDATES led me to Parker’s discussion of a court case where “Lack of Signed Release Costs Noncustodial Parent Dependency Exemption and Child Tax Credit”.

It is very, very important that if you are a non-custodial parent you MUST attach a signed Form 8332 if you want to be sure to claim your child as a dependent.  In the past attaching a copy of the divorce agreement may have been sufficient – but do not rely on this anymore.

If your spouse refuses to sign the Form 8332, as required under the divorce agreement, you may want to withhold alimony to the extent of lost tax benefits or go back to court.  But discuss the problem with your divorce attorney first.

Or when drafting the divorce agreement spell out specific “penalties” if the custodial spouse will not sigh the 8332. 

It is very important that you get your, or a, tax pro involved in the process of drafting your divorce agreement.    

As I said last year in “Wandering Tax Pro On The Tax Aspects Of Divorce” at FORBES.COM –

. . while you would certainly want Arnie Becker as your divorce attorney, you should have the divorce agreement reviewed and approved by Stuart Markowitz  before signing it.”

I expect that this cultural reference dates me.

* Speaking of FORBES.COM, Peter J Reilly covers “Whole Life Insurance Tax Disasters” there.

* Did you know “IRS.gov provides a special section dedicated to truckers and their taxes”?  I found out via a “tweet”.

Click here.

THE FINAL WORD-

Every year on the Saturday before the TONY Awards show I attend a matinee performance of a musical comedy in New York City with friends.  More often than not the musical is a revival (the original production of which I have probably seen over my 50+ years of going to Broadway).  And every year the production we have seen on Saturday afternoon wins at least one major TONY Award on Sunday night.

This past Saturday we saw PIPPIN.  I had seen the original with Ben Vereen, John Rubinstein, and Irene Ryan (Granny from “The Beverly Hillbillies” tv show) 40 years ago.  And, true to form, PIPPIN won the TONY for Best Revival of a Musical as well as Best Director of a Musical and Best Leading and Featured Actress in a Musical – all well deserved.

I was surprised that RODGERS AND HAMMERSTREIN’s CINDERELLA was included in the musical revival category.  The current production is the first time it appeared on Broadway.  It was originally written as a television special – first with Julie Andrews and years later “revived” on tv with Leslie Ann Warren. 

TTFN

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