Tuesday, October 27, 2015
WHAT’S THE BUZZ, TELL ME WHAT’S A HAPPENNIN’ – TUESDAY EDITION
* Kay Bell advises “Married? Filing a joint return? Then make sure both spouses sign the 1040 or prepare to pay tax penalties” at DON’T MESS WITH TAXES.
Her bottom line – for a joint return to be considered valid it must be signed by both spouses.
Kay does points out –
“There are two exceptions to this rule, as laid out in Section 6061.
The first is when one spouse acts as an agent of the other, e.g., acting with a legal power of attorney, and complies with those rules.
The second is when one spouse is physically unable to sign due to disease or injury.”
Kay suggests “Most couples file a joint tax return”, which is true. But filing jointly is not necessarily the best choice for many couples. Married taxpayers should have their tax preparers do a comparative analysis of joint vs separate to see which filing status results in the least amount of combined federal, state, and local income taxes.
* Have you ordered my “2015 Year-End Tax Planning Guide” yet? What are you waiting for? It’s only $3.00 and is chock-a-block with year-end strategies to help you make sure you pay the absolute least amount of federal and state income tax possible. And it has worksheets and all the pertinent 2015 and 2015 tax information.
* TAX PROF Paul Caron hits another milestone in his daily IRS Scandal series – “Day 900”.
As I have said each time I have referenced a milestone in this series – can you say “obsession”?
* Back to Kay Bell, the yellow rose of taxes looks at challenges facing the IRS resulting from continued budget cuts, as identified by the office of the Treasury Inspector General for Tax Administration (TIGTA) in her post “Securing taxpayer data is the IRS' biggest challenge”.
TIGTA listed the top 10 “management and performance challenges the IRS will face in the new fiscal year. Number 2 on the list is “Implementing the Affordable Care Act and Other Tax Law Changes”.
The purpose of the Internal Revenue Service, and the US Tax Code, is to raise the money necessary to run the government. Period. The IRS, and the US Tax Code, should not be charged with implementing government social and other benefit programs.
* Russ Fox of TAXABLE TALK is continually reporting on what he calls “Bozo Tax Preparers” who get caught by the IRS and end up in “Club Fed”. In “Monsters Under the Bed” he talks about two such bozos recently caught “doing many of the practices that bad preparers use to get bad refunds: false earned income tax credit, incorrect filing status, phony businesses, fake unreimbursed business expenses, and one that we don’t see that often: unconscionable fees”.
His bottom line (highlight is mine) -
“There are two main points to realize from this story. First, if it sounds too good to be true it probably is. If your tax ‘professional’ is promising you a huge refund but something doesn’t sound right, there likely is something wrong. Second, the IRS has methods today to go after bad tax professionals. Suppose I start inventing deductions and credits, adding phony dependents, and otherwise abuse the system, the IRS can come after me. Even unlicensed tax professionals can be gone after–and it appears that’s the case here.”
* A “tweet” from Jim Blankenship led me to a 2014 post at GETTING YOUR FINANCIAL DUCKS IN A ROW that lists “Five Things You Need to Know About Retirement Plans”. These five things seem to apply mostly to contributions to 401(k), 403(b), or 457 employer-sponsored retirement plans.
In his first item he explains –
“As you defer money into your retirement account, each dollar that you defer could be worth as much as $1.66.”
How? Read the post to find out.
And item #5 offers some very good advice –
“No matter how tempting it is, taking a loan out from your deferred compensation plan, in more cases than not, results in derailing your hard work in saving and building up your account. Not only are you strapped with having to pay back the funds to your account with interest, but you have also given up whatever growth might have occurred within your account since the funds are being used for an outside purpose.”
It can also be expensive, tax-wise, if you leave your employer before paying back the loan.
* There is still time to get my best tax advice at a 25% discount. Click here.
THE LAST WORD –
Buffoon Donald Trump dismisses polls that do not show him as #1 because he says the organizations conducting the polls don’t like him. He would obviously quote the same polls with pride if they showed him as #1. And, of course, any paper that conducts a poll that does not show him as #1 is a “bad” paper. He is delusional.
While watching a rerun of LAW AND ORDER: SVU the other day I found that Dr. Huang’s description of a suspect’s behavioral disorder sounded like a perfect description of Trump.