Tuesday, December 3, 2013
WHAT’S THE BUZZ, TELL ME WHAT’S A HAPPENNIN’ - TUESDAY EDITION
* It’s here! The December “issue” of THE LAKE REGION SOMETHING that is. What are you waiting for – check it out now!
* Taxpros, have you read my TAXPRO TODAY editorial “Who Speaks for the Tax Preparer?” yet? I would like to hear your opinion on this topic.
* Jamaal Solomon of THE TAX FACTOR is back with a series of posts on “Things I Can Learn About Taxes from a Newborn Child”. Click here for Part One.
* Peter J Reilly from FORBES.COM was the first to being my attention to the court decision that struck down the ministerial housing allowance as an unconstitutional preference for religion.
Richard R Hammar lists “Five Takeaways from Friday's Housing Allowance Ruling” at MANAGING YOUR CHURCH.
For one thing, as I mentioned in an earlier BUZZ reference to this issue, the ruling does not affect 2013 clergy tax returns because the ruling “shall take effect at the conclusion of any appeals . . . or the expiration of the deadline for filing an appeal, whichever is later.’ An appeal by the IRS and Department of the Treasury would be to the Seventh Circuit Court of Appeals in Chicago, and could take up to a year to resolve.”
But what is most important to my one remaining clergy client is Richard’s third “takeaway” (the highlights are mine) -
“Third, a ruling by a federal district court judge in Wisconsin is not binding on other courts, and does not apply to minsters in other states. If the ruling is appealed and affirmed by the Seventh Circuit Court of Appeals, it will apply to ministers in that circuit (Illinois, Indiana, and Wisconsin). It would become a national precedent binding on ministers in all states only if affirmed by the United States Supreme Court (an unlikely outcome).”
My client, a minister who received a cash housing allowance, lives and works in Maryland – so even if this decision is upheld it will not increase his taxes.
* Trish McIntire provides a primer on “Dividends and Qualified Dividends” at ANSWER.COM.
* And at her OUR TAXING TIMES blog Trish explains “Refund Advances”.
Two things of great importance that she tells us –
“The first thing to understand is that these tax refund advances are loans.”
And (highlight is mine) –
“Which brings us to a common misconception, when you get a holiday advance of your tax return refund you are not filing your tax returns. This year, tax returns can't be filed until late January or when you have all you W-2s and 1099s. Whichever is later. You still need to file a tax return to get your refund.”
What Trish does not tell you – but I will – is that Refund Advances and Refund Anticipation Loans are BAD! Whether holiday advances or true refund loans as part of your tax return filing, they should be avoided! If nothing else, the interest rate and fees are often what I would consider “usurious”.
Tax return preparers should be barred by law from offering Refund Anticipation Loans!
If you really need money there are many less “offensive” ways of borrowing. The only thing worse than a refund advance or refund anticipation loan is going to a loan shark!
* The MILWAUKEE CPA reviews “12 Smart Tax Moves to Make Now”.
* Jean Murray provides “Year End Tax Planning for Small Business Owners - Some Tips” at ABOUT.COM.
Her post links to another whose title is great advice - "Don't make financial decisions just for tax savings.". Actually you should not make any financial decision just for tax savings. Your first consideration should always be financial. Taxes are secondary.