WHAT’S THE BUZZ, TELL ME WHAT’S A HAPPENIN’?

* Professor Annette Nellen of 21^ST CENTURY TAXATION posts about “Yet One More Proposal for Relief of New State Tax Deduction Cap”. 

She is talking about a law passed in my former home state of NJ that “allows local governments to create funds where property owners can ‘donate’ to the fund and get an 90% credit against their property tax”.

In order for an alleged charitable contribution to be a qualified deductible charitable donation – the donor has to make the contribution voluntarily.  And the deduction must be reduced by the value of any goods or services received in return for the contribution.  For example, if you buy a ticket to a fund-raising dinner for $100, and the value of the dinner being provided is $25, you can only deduct $75.

If you are getting a 90% credit toward property taxes assessed, which are required to be paid, on a, for example, $5,000 “contribution” to a local government fund - a $4,500 credit against your property taxes - your tax deduction is limited to $500.  This is because in reality you are only “out of pocket” $500.  The $4,500 that goes to in effect pay your property taxes is “goods and services received in return for the contribution” and is not deductible. 

So, what have you gained?  Nothing!  You have actually lost about $400 – which is the $500 you paid above and beyond the actual property tax less the federal tax benefit.  It is actually the equivalent of a property tax increase. 

These attempts by the idiot politicians in state governments are nonsense – and do nothing to allow homeowners to “get around” the new limitation on the property tax deduction. 

* Mark J Kohler deals with the question “Is My Pet a Tax Write-off?”. 

I have also written about this topic in several past posts – beginning with “Doggie Deductions”.

* Fellow tax pro blogger Jason Dinesen provides his version of my “That Was the Tax Season That Was” with “2018 Tax Season Recap: Not Too Bad” a DINESEN TAX TIMES.

Jason noted he ended the season with twice the amount of usual GDEs (less than I did).  And he, rightfully so, complained about client “are we there yet” messages and texts, some at 6:30 in the morning and 10:30 at night. 

Jason, I feel your pain.  I tell my clients that I will NEVER respond to an “are we there yet” email until we are actually there.

He does point out what clients really don’t understand (highlights are mine) –

“The main reason it ‘takes so long’ (to prepare returns) is because taxes are hard. The majority of people who work with me tell me ‘my return is easy’. But in reality there’s no such thing as an ‘easy’ return anymore.”

As a result of the GOP Tax Act there actually will be many more “easy” tax returns next season.

If you missed my tax season “review” click here.

* Kelly Phillips Erb, the FORBES.COM TaxGirl, reports “New Tax Proposal Would Boost Charitable Mileage Rate To Equal Business Rate”.

It’s about time!  The deduction for charitable mileage, the only standard mileage allowance set by Congress and not determined each year by the IRS based on reality, has been 14 cents for decades now.  It should be at least the same as the medical and moving mileage allowance.

* The IRS is providing “Tax relief for victims of severe storms and tornadoes in Alabama”.

* Kay Bell celebrates Star Wars Day with “May the Tax Force be with you in battling tax myths”.

As usual, good advice from Kay.  Regarding #4 – I truly understand that if many taxpayers had an extra $100 in their paycheck each week they would waste it, and a large refund is a kind of forced savings.  But instead of increasing your take home pay have the additional $100 per check, or whatever, directly deposited to a credit union or other savings account, or perhaps a ROTH or traditional IRA account, if possible, so that the money does not end up in your pocket, but in an account earning interest or dividends.

THE FINAL WORD

The most important question to ask any candidate for public office, regardless of their Party affiliation, is “do you oppose and denounce Donald T Rump?”  Only vote for those who say YES without reservation.

TTFN