Tuesday, May 12, 2015


* Tax pros – what do you have to say about “The Mortgage Interest Dilemma”?

* One of the unanswered questions from last week’s BOB’S BABBLINGS is answered in this week’s post.  While you are there, can you answer the question in my Trivia Challenge 
* Kelly Phillips Erb’s latest “Fix The Tax Code Friday” question was “What Should We Do About The Earned Income Tax Credit (EITC)?
Kelly points out -

Critics call the credit confusing and an opportunity for fraud; that’s also statistically true since most billions of dollars are paid out for EITC in error every year.”

The answer to her question is that the EITC should be removed from the Tax Code.  There should be no refundable credits – they are a magnet for fraud.

Check out the answer I gave Kelly in the comments section of the post.

* And, in honor of Mother’s Day, Kelly lists “11 Things I've Learned About Tax From My Mom”.

* Speaking of Mother’s Day, Kay Bell gives us “A Mother's Day Tax Gift: 10 Child Care TaxCredit Tips” at DON’T MESS WITH TAXES.

* Over at ABOUT.COM Jean Murray provides a wealth of information for those who use their car for business in “7 Useful Tax Tips for Business Driving”.  Each tip links to a more detailed post.

* KHON in Hawaii brings some good news to frustrated taxpayers waiting for a refund check - “State Tax Refund Will Earn Interest as Delay Lengthens

This deplorable situation is not because of state budget problems – but because of taxpayer fraud.

More bad news for those looking forward to their state tax refunds. The state now tells us it will take even longer, up to four months now, to get that check.

When we first reported this to you, the state said the refunds will take eight weeks. That’s because the state tax office is giving refunds more scrutiny to prevent fraud.

Two weeks after that, the state said refunds will take 10-14 weeks. Now, it will take 16 weeks, all for the same reason.”

How much will they earn?

Returns will earn four percent annually, or one-third of a percent per month.”

Hey – that’s certainly better than what banks are paying on savings.

* Hawaii is not the only state that is taking longer to process tax returns.  The NJ Division of Taxation has posted the following message regarding 2014 refunds –

We know you want your refund as quickly as possible, but there is something you should know.

The Division of Taxation has made a commitment to protect your personal and tax information.

The filing of fraudulent tax returns is growing. Because of the increase in these tax filings, we are using more security measures when processing returns. 

All electronically submitted returns are reviewed to make sure the information provided on the return belongs to the filer so your refund is not sent to an imposter.

This means your return may take longer to process than your tax preparation software may suggest, and it could take us more time to send your refund than it has in previous years because we are making every effort to protect your identity.  

You will be notified in writing if we need additional information in order to process your return.

Thank you for your patience as we work to make sure that you get your refund – not someone else.”  

While I have heard from clients about delayed federal refunds, I have not been contacted about any delayed NJ refunds.

* Will the IRS make it easier to determine one’s “shared responsibility payment” next tax season?    ACCOUNTING TODAY’s Michael Cohn tells us IRS Prodded to Ease Compliance with Obamacare Individual Mandate”.

The report, from the Treasury Inspector General for Tax Administration, recommends the IRS instead offer an online tool that would make it easier for taxpayers to find out if they owe a “shared responsibility payment” because they lack “minimum essential coverage” under the health care law, and how much they would owe. Such a tool is already available to IRS examiners and appears to work well at estimating the payment. The TIGTA report suggests the same tool be provided on IRS.gov to taxpayers. The IRS agreed with TIGTA’s recommendation and plans to look into providing an online tool for estimating the shared responsibility payment.”

Will this online tool also provide assistance in determining if the “unaffordable” or any other exception to the payment applies?

* Jason Dinesen will take two posts to answer the question “Why Make Estimated Tax Payments”.  Click here for “Part 1”.

Jason tells us that “contrary to the H & R Block commercials, tax refunds are not a magical creation”.


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