Friday, June 20, 2014


* Jason Dinesen of DINESEN TAX TIMES answers my question in his follow-up post “Iowa Taxes: Filing Separately and Allocating Dependents”.

Thanks, Jason. 

* What is this?  Jason changes his mind and admits his error in “Solo Practitioner Blues: Value Pricing Revisted (I Was Wrong)”. 

I had joined Jason in his earlier disdain of “value pricing” – which he had originally described as determining a fee based on what a client thinks the work is worth – in an earlier BUZZ installment.  If this is what value pricing is then I stand by my original comments.

Like Jason, “I still have questions, such as how one determines that one client gets charged, say, $500 and another gets charged, say, $400 for seemingly the same work.”  Obviously if one client is not as organized, or generates more “agita”, the fee would be higher because more of my time was involved in doing the work.  But this has nothing to do with the client’s perceived value. 

I would be interested in hearing more from Jason on why the turnaround.

* Kelly Phillips Erb, FORBES.COM’s TaxGirl, teaches you how to become a NIIT Wit in “Outwitting The NIIT: 12 Ways To Avoid The New Net Investment Income Tax”.

FYI, NIIT is the new “net investment income tax” for those who BO considers “wealthy”.

* And Kelly tells it like it is in “Admit It: The Clintons Didn't Do Any Tax Planning You Wouldn't Do”.

She correctly points out that criticizing the wealthy for taking advantage of legal and legitimate tax deductions and strategies is hypocritical -

“. . . but let’s face it, when tax reduction strategies are available, most of us seize on them. You take the mortgage income deduction, right? You claim your dependents. You stash away tax deferred cash in retirement plans. You write off business expenses. You do it because you can. Just like the Clintons. And just like Apple.”

And she makes an excellent point when she says (highlight is mine) –

And it’s a fun message to say that the Clintons are using a tax strategy {to reduce federal estate tax – rdf} which benefits the top 1%… It’s also redundant: the top 1% are the only taxpayers subject to the federal estate tax anyway. Why would any of the 99% – who aren’t subject to the tax in the first place – even consider such a strategy? It’s pointless. But it makes a good talking point in the press, apparently. You know, for folks who aren’t quite sure what they’re talking about.”

If you are upset that the wealthy are taking advantage of tax benefits the blame is not with the wealthy.  The now famous 47% of Americans, who are anything but wealthy, are taking advantage of tax benefits to either pay absolutely no federal income tax or to make a profit from filing a Form 1040 (refundable credits).  The blame belongs to the idiots in Congress who write tax law.

* Speaking of the federal estate tax, Kelly’s FORBES.COM colleague Ryan Ellis says “U.S. House May Soon Kill the Death Tax” –

. . . the 218th (and beyond) co-sponsor signed onto H.R. 2429, the “Death Tax Repeal Act of 2013,” sponsored by Congressman Kevin Brady (R-Tex.) This means that a majority of the entire House of Representatives is now on record in favor of killing the death tax.”

I have never been a fan of the federal estate tax.  My only concern with doing away with the tax concerns the step-up in basis for inherited assets, which I am a big fan of.

* “401(k) Rollovers – Buyer Beware” warns Roger Wohlner, the CHICAGO FINANCIAL PLANNER.

Roger wants you to “be careful when choosing an advisor for your retirement nest egg”.  

Be careful when choosing a financial advisor or broker.  Period.  Remember, as I have said here before, a broker is a salesman who makes money based on what he sells you.  I have known many extremely competent and honest brokers over the years who have truly had their clients’ interests as their primary motive – but there are an equal number of bad brokers out there as well.

And don’t assume a financial advisor or broker, however competent or honest, knows tax law.  Run any advice from a financial advisor or a broker by your tax professional before making any substantial investment.

* THE SLOTT REPORT expands on an item referenced in a previous BUZZ installment in “Supreme Court: Inherited IRAs are NOT Retirement Accounts ... and What This Means For You”.  

* Over at CINCINATTI.COM Tom Cooney and Crystal Faulkner remind us that “Wise Ones Already Working on Taxes” and suggest some midyear tax planning moves.

* Oi vey!  According to Kay Bell “20,000 Kansans Still Waiting for Their State Tax Refunds”.


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