Can’t wait until Monday to BUZZ – it is
chock-a-block already!
* Chris Johnson suggests what to do “When the IRS Says You Owe More” at CAJ TAX SOLUTIONS.
I certainly agree with his statement –
“When
you receive an IRS notice demanding additional tax, do not pay until you are
sure your liability was computed correctly.”
As I have been saying for years, in my
experience 2/3 to 3/4 of all IRS notices are wrong.
But the point of Chris’ post is this – “Uncle Sam’s counterpart at the state level
will need to know about the changes to your federal return if it has an effect
on your state tax liability” whether you owed Sam more or Sam actually owed
you.
If your federal return is changed it may
also change your state return – and the state should be advised. If you don’t tell the state that your federal
return was changed and you owe more you can be sure the IRS will (Sam and
states share information) – and you can end up “receiving a notice from the state automatically assessing additional taxes,
interest and penalties” down the road.
* At THE SLOTT
REPORT Beverly DeVeny discusses “the hierarchy of tax guidance and how it
interacts with retirement plans” in “Tax Guidance: What Can You Depend On?"
* The August issue
of ROBERT D FLACH'S THE 1040 LETTER is here!
Hey – it’s free! Click here to
download.
* TaxGirl Kelly
Phillips Erb of FORBES.COM helps parents with “Sorting Out Tax Breaks For College, Even When You're Still In High School” by using an example involving
her daughter.
* And Kelly repeats
the word that “IRS Warns Again On Scams Targeting Taxpayers” –
“Specifically, the IRS is reporting an
increase in “robo-calls” where scammers leave urgent callback requests telling
taxpayers to call back to settle their “tax bill.” These fake calls, which
often sound threatening, claim to be the last warning before legal action is
taken.”
The IRS will never attempt to collect back taxes in
this way. If you receive a call from someone claiming to be from the IRS just
hang up!
* Over at DON’T MESS WITH TAXES Kay Bell,
the yellow rose of taxes, lists “3 reasons to file your extended taxes now” -
“So
whatever your reason for not filing your extended tax return yet, get off the
stick and file ASAP.”
* Another from Kay – a reminder of current
and upcoming “State Sales Tax Holidays”.
* Returning to
FORBES.COM, I cannot find fault with Tony Nitti’s statement “There are a thousand good reasons to never
get married” (I have never been legally married), and agree with his
observation “there are also significant
tax hits that come with getting hitched, or as they’ve collectively been
coined, the ‘marriage penalty’.”
In “IRS Increases' Marriage Penalty’, Unmarried Cohabitants To Get Twice The Mortgage InterestDeduction” he tells us –
“Late last week, the IRS exacerbated the
marriage penalty by offering a very large reward for unmarried taxpayers who
co-own a home: double the mortgage interest deduction available to married
taxpayer.
In AOD 2016-02, the IRS acquiesced in the Ninth
Circuit’s decision in Sophy v. Commissioner, in which the appeals court
overturned a Tax Court decision and allowed a same-sex, unmarried, co-habiting
couple to each deduct the mortgage interest on $1.1 million of acquisition and
home equity debt. In reaching its conclusion, the Ninth Circuit determined that
the mortgage interest limitation is meant to apply on a per-taxpayer, rather
than a per-residence, basis. The AOD issued by the IRS confirms that the
Service will follow this treatment.”
Of course this
situation applies to very few taxpayers – i.e. those who purchase a home for
more than $2 Million. But it does
highlight the existence of the marriage penalty.
The Tax Code should
neither encourage nor discourage marriage.
It should be “marriage neutral”.
Click here to read how I said I would rewrite the Tax Code regarding marriage
back in 2011.
* Please check out
the free copy of the premiere issue of my new subscription newsletter ROBERT D
FLACH’S THE SCHEDULE C LETTER. Click
here to download.
* You can “subscribe”
to TWTP blog posts by entering your email address in the space under “FOLLOW BY EMAIL" in the left
border. Receive my posts in your inbox!
* While I continually
advise readers to never use Henry
and Richard, or others of their “ilk”, to prepare their tax returns, I can
recommend a post from the H+R blog – “Breaking Down A Paycheck: Teaching Your Teen About Tax Withholding”.
What the post
forgot - for NJ and some other state employees payments via withholding also
include required employee contributions to the state’s unemployment,
disability, and/or family leave funds.
* FYI – I have reached 1200 Twitter followers! You can follow me at @rdftaxpro.
THE FINAL WORD
Is this the man you
want as President?
TTFN
Do you
want to learn how to pay the absolute least amount of federal and state income
tax possible – and experience the joy of avoiding taxes? Click here to check out my
library of tax planning and preparation books, guides, reports, and
newsletters.
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