Tuesday, April 22, 2014
WHAT’S THE BUZZ, TELL ME WHAT’S A HAPPENNIN’ - TUESDAY EDITION
BUZZ, BUZZ. The BUZZ is back!
* Donald Rumsfield, Secretary of Defense from 1975 to 1977 under Gerald Ford and again from 2001 to 2006 under Dubya, agrees that the US Tax Code is a mucking fess. He shares his frustration with the complexity of the Code in a letter to the IRS. Click here to read the letter.
* Fellow tax-blogger Joe Kristan of THE ROTH AND COMPANY TAX UPDATE BLOG is interviewed by a local Iowa news station on a unique state tax credit. Click here to see Joe on tv.
* Kay Bell of DON’T MESS WITH TAXES, the yellow rose of taxes, talks about the 2013 Form 1040s filed by BO and the Vice President at her BANKRATE.COM tax blog.
* CCH has published a “2014 Post Filing Season Update” Tax Briefing. Click here to download the report.
* MARKETWATCH.COM “Tax Guy” Bill Bischoff lists some resolutions to make that will help make 2014 less taxing in “5 Tax Mistakes You Should Never Make Again”.
I especially like his 5th - “Resolve to consult your tax pro before major transactions.”
Bill forgets two of the most important resolutions –
· Resolve to become more informed on taxes, and
· Resolve to keep better tax records.
* Is your state income tax too high? MOTLEY FOOL identifies “These States Have No Income Tax”. There are 7. And 2 with “no income tax on wages but do tax interest and dividends”. The item takes a look at each of these 9 states.
* ACCOUNTING TODAY tells us “IRS Audit Rate Hits New Low”.
“The Internal Revenue Service is anticipating the chances of a tax return being audited to be the lowest in years.
The IRS audited less than 1 percent of individual tax returns in 2013, the lowest rate since 2005, and the number of individual returns that will be audited this year will decline even further, IRS commissioner John Koskinen told the Associated Press.”
The reason? Why the idiots in Congress, of course.
“Thanks to successive rounds of budget cuts at the hands of Congress, the IRS has been forced to cut back on its audits.”
* From CNN “$100,000 Income: Three Very Different Tax Bills”.
The item “compare the combined federal, state and local income tax bill on a gross household income of $100,000 in” Queens NY, Topeka KS, and Seattle WA.
The Seattle family pays the least amount of overall income taxes, and the Topeka family pays the most federal income tax. This is because (1) Seattle has no state income tax, and (2) Kansas has substantially less local real estate taxes than the other two locations, and a Kansas homeowner pays much less in mortgage interest, due to the price of homes, than homeowners in Queens and Seattle, which reduces the Topeka family’s Schedule A deductions
This example shows how the deductions for real estate taxes and mortgage interest can help to “geographically” equalize tax burdens.
* According to the TAX FOUNDATION “Tax Freedom Day® 2014 is April 21, Three Days Later Than Last Year”.
“Tax Freedom Day is the day when the nation as a whole has earned enough money to pay its total tax bill for year.”
Why 3 days more?
“Tax Freedom Day is three days later than last year due mainly to the country’s continued slow economic recovery, which is expected to boost tax revenue especially from the corporate, payroll, and individual income tax.”
What about the individual states?
“The total tax burden borne by residents of different states varies considerably due to differing state tax policies and because of the progressivity of the federal tax system.”
It is no surprise that NJ residents need to work until May 9th to cover its their excessive tax burden. That is longer than any other state. Connecticut has the same Tax Freedom day. NY’s TFD is May 4th. My new home state of PA celebrated on April 21st. I certainly did better by moving (in a lot of ways).