WHAT’S THE BUZZ, TELL ME WHAT’S A HAPPENNIN’

A meaty BUZZ today!

* I review the latest developments, with a little help from Jason Dinesen, in “IRS Announces Policy for Tax Treatment of Same-Sex Marriages” at MAINSTREET.COM.

* Is there anyone out there who has still hasn’t checked out THE LAKE REGION SOMETHING? 

* Robert W Wood of FORBES.COM lists “20 Things Taxpayers Don't Get” –

“The incredible popularity of ‘20 Things 20-Year-Olds Don’t Get’ {huh? Never heard of it – rdf} made me reflect on the many important things about taxes most taxpayers don’t get. Across a huge age range and even bigger economic spectrum, we all pay taxes. Yet we may not know key points.”

Some of the 20 worth highlighting (things I have been advising for years)–

“2. Forms 1099 Really Count.

7. Reply to Every IRS Letter Unless it Says Not To.

12. Keep Your Old Tax Returns Forever.

16. File Returns Even if you Can’t Pay.”

I do take exception to 2 of RWW’s things –

“6. Pay Small Tax Bills. If you get a small tax bill, pay it even if the IRS is wrong. What’s “small” varies, but don’t risk an audit or dispute escalating by fighting over small dollars.”

I do not believe you should pay the IRS if they are wrong – unless we are talking about a couple of dollars.  If you have nothing to hide and you have documentation to prove you are right and the IRS is wrong you should explain to the IRS where they went wrong. 

And –

“13. Avoid Amending Tax Returns. Don’t take amending tax returns lightly. Amended returns have a high audit rate, especially if they request a refund.”

In my 40+ years of preparing 1040s I have prepared many amended returns to claim a refund, both large and small, and have NEVER had any of these amended returns audited or questioned.  Again, if you have nothing to hide and you have documentation to prove the correction you should amend the return.

* The MIAMI HERALD of all places is where I heard “Conn. Launches Latest Tax Amnesty Program” –

“The Department of Revenue Services is offering a 75 percent reduction in accumulated interest and will waive all penalties for individuals and businesses that have not filed, have underreported or have existing state tax liabilities for any period ending on or before Nov. 30, 2012.”

* And the IRS announces “Tax Relief for Victims of Severe Storms in Colorado”.

* William Perez tells you what to do if you are “Missing a Tax Document for 2012?” that is needed to complete your extended 2012 tax return at ABOUT.COM - TAX PLANNING:US.

* Bill Bischoff of Market Watch’s TAXWATCH warns “Don’t Make This Common Estate-Planning Error”.

He tells us to “Keep beneficiary designations up to date or your ex may get everything”.

Whether or not an “ex” is involved it is important to frequently review, and update if necessary, the beneficiaries on “your bank, brokerage, retirement, company benefit plan, life insurance, and 529 college accounts”.

* Trish McIntire of OUR TAXING TIMES provides an overview of the “Disasters and Chutes and Ladders”.

What is she talking about?

“Flood victims or any taxpayer suffering a personal disaster or casually loss have the possibility to receive a tax deduction. But before you count on a bigger refund, you need to understand how a Form 4684, Casualties and Thefts works. It’s very much like the children’s game Chutes and Ladders.”

* It seem obvious, but Jason Dinesen still reminds us that “Having a Side Business in Multi-Level Marketing Doesn’t Make Personal Expenses Deductible” –

“. . . anything that you buy and consume for personal purposes is a non-deductible personal expense.”  

* FORBES.COM’s TaxGirl Kelly Phillips Erb reports on the CCH estimates of inflation adjustments for 2014 in “2014 Tax Brackets, Exemption Amounts Likely To Save Tax Dollars”.

CCH is usually right, but I will wait until the numbers are officially released by the IRS before I publish them.

Of course this is based on current tax law, and assumes, possibly rightly so, that the idiots in Congress will not pass substantive tax reform in the next 3+ months.

* Kelly also points out that the fat lady has yet to sing in “Surviving Tax Season: It's Not Over Yet”.  And it won’t be for another month.

I truly miss the “good old days” when the tax season, for me, truly ended on April 15^th.  For most of the first half of my tenure in the business I never had to file an extension for a client.  I do indeed hate GD extensions, although they are almost impossible to avoid.

* And FORBES.COM also gives us a slide show of “15 Ways To Invite An IRS Audit”.

I agree for the most part.  However, as I have been saying for years, if you legitimately have excessive documented charitable contributions or employee business expenses claim the full amount.  Do not NOT claim legitimate documented deductions simply because you are afraid of being audited.  As long as the deductions are legitimate and documented an audit should result in “no change”.  

* The 4Nannies.com NANNY BLOG details “Other Costs Besides Wages that Nanny Employers Should Expect to Pay”, advising –

“. . . before parents take the leap and hire a nanny they need to carefully consider how much it will cost to hire and keep a qualified caregiver.”

An important other cost on the list – taxes.  Especially important if one of the parents intends to run for public office, or be nominated to a cabinet position.

“They must pay their portion of Social Security and Medicare, federal and state unemployment and any additional local and state taxes required. These taxes generally add up to 9 to 11% of their nanny’s gross wages.”

* Professor Annette Nellen tells us what is in the Spring/Summer 2013 issue of “Contemporary Tax Journal”, the student-run, online journal of the San Jose State University MST Program.

* According to Michael Cohn of TAXPRO TODAY “IRS Streamlines Innocent Spouse Relief” -

“The Internal Revenue Service has issued new guidance and streamlined procedures for spouses who are seeking equitable relief from joint income tax liability.”

TTFN