Wednesday, September 8, 2010


Not much BUZZ this installment – due to holiday week-end.

* The IRS tells us that, as per the Affordable Care Act enacted in March, a new uniform standard takes effect Jan. 1, 2011, for flexible spending accounts, health reimbursement arrangements (HRAs) Health Savings Accounts (HSAs), and Archer Medical Savings Accounts (Archer MSAs).

Under the new standard, the cost of an over-the-counter medicine or drug cannot be reimbursed from the account unless a prescription is obtained. The change does not affect insulin, even if purchased without a prescription, or other health care expenses such as medical devices, eye glasses, contact lenses, co-pays and deductibles. The new standard applies only to purchases made on or after Jan. 1, 2011, so claims for medicines or drugs purchased without a prescription in 2010 can still be reimbursed in 2011, if allowed by the employer’s plan.”

* Kay Bell provides some interesting facts and figures for tax year 2007 in her post “Where Does Your Taxable Income Rank?

For example –

The top-earning 1 percent of taxpayers reported 22.8 percent of all AGI and paid 40.4 percent of total income taxes.”

And -

The lowest-earning 50 percent of taxpayers reported 12.3 percent of all AGI and paid 2.89 percent of total income taxes.”

* Speaking of Kay, my post on was included in her “Tax Carnival #74: Labor Day 2010”, which “spotlights the efforts of tax and personal finance bloggers who help workers pay as little tax as possible on their earnings”.

The Carnival begins with some good posts on retirement accounts, and has some other good “stuff”.

* Trish McIntire has some good advice for taxpayers who receive an IRS notice on a self-prepared return and choose to respond personally in “Step Away From the Keyboard” at OUR TAXING TIMES.

Actually a better piece of advice is - do not respond personally. Even if you prepared the return yourself you should contact a tax professional if you receive a notice from “Sam” of any other “uncle” or “aunt”.

* BLOOMBERG reports that “Obama to Propose Expanded Tax Relief to Encourage Investment in Equipment”.

The White House will propose allowing companies to fully deduct the cost of equipment such as tractors, wind turbines, computers and solar panels, said an administration official who spoke on condition of anonymity ahead of the president’s announcement this week.

In 2008 and 2009, companies could deduct 50 percent of their costs using so-called bonus deprecation. The latest proposal would increase the tax break to 100 percent through the end of 2011 and make it retroactive to Sept. 8, 2010, the official said

* The IRS has released a draft version of new Form 8941 - Credit for Small Employer Health Insurance Premiums.


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