Saturday, November 14, 2009


* Venerable TAX PROF Paul Caron tells us that the Heritage Foundation has published "Seven Reasons Why Congress Should Repeal, Not Fix, the Death Tax" by William W. Beach in his as usual appropriately titled post “Seven Reasons Why Congress Should Repeal, Not Fix, the Estate Tax”.

The 7 reasons are –

1. Death taxes discourage savings and investment
2. Death taxes undermine job creation
3. Death taxes suppress productivity and wage growth
4. Death taxes contradict the central promise of American life: wealth creation
5. Death taxes hurt those who have tied their savings up in land
6. Death taxes hurt African-American business owners
7. Death taxes hurt women business owners

I don’t want to be “politically incorrect” – well actually I do not want to be “politically correct” – but it matters not whether death taxes hurt African-American business owners or women business owners. It matters only that death taxes hurt business owners - period. To be honest Mr Beach does not properly explain how death taxes hurt African-American and women business owners more than other business owners.

It seems to me that beneath any such statements as these lay some kind of prejudice. It is as if they are saying that African-American and/or women business persons are not as competent or savvy as other business persons and therefore need special protection or advantages.

FYI one of the most successful and savvy business persons I know is a woman!

* EA John Sheeley reminds small business owners of the rules concerning the Form 1099-MISC in his post “Year End Planning: Filing Form 1099-MISC” as his self-titled blog.

John suggests that -

NOW is the perfect time to review your files and determine to which of the people and companies you did business with during 2009 you must issue a Form 1099-MISC. Well ahead of the end of the year, you should send IRS Form W-9 to the affected payees for completion.”

If I might add a word of caution to small business owners and freelancers – just because you do not receive a Form 1099 does not mean that you do not have to report the income. There are those who will only report as income the amounts identified on the Form 1099-MISCs that they receive. Taxable income is taxable income. Besides – just because you have not received a 1099 does not mean that one was not issued and is in the IRS system. It may have contained an incorrect or outdated address and therefore not delivered, or just plain lost by the Post Office.

On the other hand do not accept a 1099 as gospel without checking the amount reported on the form against your records. If you find a discrepancy contact the issuer immediately.

And be sure to verify that the Social Security or Employer Identification Number on the form is correct.

* TAX GEEK Dana Andrews (no, he was not in LAURA) takes the words out of my mouth with his rant “Arrghhh!!!!! I Hate It When People Give Tax Advice Who Should Not Be Giving Tax Advice”.

On this case Dana is talking about charities telling you “Your payment is tax deductible” –

This is a huge misconception people have about charities. Let me make this clear, Your Girl Scout cookies are NOT tax deductions. You give them 4 bucks, they give you cookies. A purchase, not a tax deduction. If you were to give the girl a $5 bill, and tell her to keep the change for the troop, that $1 becomes a deduction. (Only if you get here to sign a receipt).”

* To celebrate Friday the 13th, the third one this year, Kay Bell provided links to posts that deal with tax and financial fears in her post “Overcoming Tax Terrors” at DON’T MESS WITH TAXES.

* And, while Kay Bell tells us “Don’t mess with taxes”, Jean Murray suggests “Don't Mess with the IRS - Cases in Point” at JEAN’S BUSINESS LAW/TAXES: US BLOG.

What’s the post about? Jean says, “In honor of Friday the 13th, I am acknowledging some unlucky taxpayers who figured they could get away with cheating the IRS. Silly fools!

* SMT Associates, the CPA firm behind the BETTER BUSINESS BLOG, has a free “Year-End 2009 Business Guide” to help businesses understand the various year-end reporting requirements. It also includes information about important deadlines between Jan 1 and Apr 15 and tips on year-end closings and good accounting practices to help you stay compliant with IRS regulations and make bookkeeping less stressful.

Click here to download the guide.

* Bruce, the MISSOURI TAX GUY, discusses the tax filing responsibilities you will be faced with if you find yourself named as executor when a loved one dies in his post “A Death In My Family”.

Condolences to Bruce on the passing of his grandmother.


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