Friday, April 25, 2014
WHAT’S THE BUZZ, TELL ME WHAT’S A HAPPENNIN’
Sorry for lack of posts this week. I have been working on the GD extensions!
* Professor Annette Nellen tells us “TaxDay - April 15, 2014 - It Can Be Easier” at 21st CENTURY TAXATION.
Indeed it can, and the Professor has some suggestions.
Her bottom line is the simpler the better – a concept with which I wholeheartedly agree. I especially like, and agree with 100%, what she initially says about education incentives in the Tax Code –
“. . . today there are multiple, duplicative, complex provisions offering various tax savings for higher education costs. I think that for the most part, this should all be taken care of outside of the tax law because there is already a system in place, such as for Pell Grants.”
I would go further. Forget “for the most part”. There should be no tuition credits or deductions on the 1040.
As Annette suggests, it can be easier. But, considering the idiots we have elected to Congress, I doubt it will actually really be easier any time soon.
* Jim Blankenship talks about “The One-Rollover-Per-Year Rule: Revised” at GETTING YOUR FINANCIAL DUCKS IN A ROW.
It is important to note, as Jim reminds us (highlights are mine) -
“Bear in mind that trustee-to-trustee transfers (direct rollovers) are not subject to the one-rollover-per-year rule, since these transfers are not considered to be ‘rollovers’ by the IRS.”
* USA TODAY reports that “IRS Workers Who Didn't Pay Taxes Got Bonuses”.
The scandals just continue. And these guys want to regulate my profession? The IRS needs to take care of its own house before it looks to license me.
* Neal Frankle, CFP explains “Loans to Family Members – How to Do It Right” at WEALTH PILGRIM.
His best advice – and good advice – “Don’t loan money to friends and family if at all possible.”
But if you must –
“I don’t care how much you trust this person. I don’t care if you are loaning money to your brother-in-law who saved your life by donating his lung to you — get it in writing. And while you’re at it, have all the spouses sign as witnesses to the agreement. This is crucial. You don’t want anybody to misunderstand. This is a loan and must be repaid.”
If you get it in writing you may be able to claim a non-business bad debt deduction on Schedule D when the family member or friend defaults if you can prove it is truly uncollectible.
* Was your federal refund check less than you expected? Kay Bell suggests one reason in “Got Debts? They Could Eat Into Your Tax Refund” at DON’T MESS WITH TAXES.
Kay says –
“The U.S. Treasury, which is boss to the Internal Revenue Service, is able to nab part or all of your refund to pay some outstanding federal or state debts you have.”
Some of these debts may be erroneous, but, as Kay points out, you must go to the agency or organization claiming the debt to try to get the money back.