Wednesday, June 30, 2010

WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’ – WEDNESDAY EDITION

* The Summer 2010 issue of TAX WATCH, the Tax Foundation's quarterly tax policy newsletter, is available to download. Click here to download.

Highlights from the Summer 2010 issue include:

• A Smaller Federal Budget Starts at Home
• Healthcare Bill May Redistribute Billions
• Testimony: Protect the Economy from State Taxes
• Study: Bag Taxes Don't Work

* Glad to see that Bruce, the MISSOURI TAX GUY, has brought his BUZZ-like Sunday “Reads from Last Week” back.

I am happy to have been a small part of bringing Bruce to the tax blogosphere. Sorry we won’t be “bending elbows” in Austin. Maybe next summer in St Louis.

Hey, Alltop, what’s taking so long bringing the MISSOURI TAX GUY back to the tax page?

* The blogging tax pro from Grandview, Mo goes on to begin what may be a series on basic accounting education by talking about “The Company Balance Sheet”.

* Kay Bell tells us that “Today's Taxes Aren't Too Bad” at DON’T MESS WITH TAXES.

A chart included in the post shows that the top rate was as high as 94% in 1945. The top rate the first year I began preparing 1040s was 70% - but there was a 50% “maximum tax” on earned income.

Although tax rates were higher in the early years of my career there were more deductions available (i.e. state and local sales tax and state and local income tax, and all personal interest), there were no phase-out thresholds or reduction of itemized deductions and personal exemptions, and there also was the availability of “Income Averaging” and “10-Year Averaging”.

* Oi vey! Roni Deutch reports that “7 States that Still Owe their Citizens Refunds” at her TAX HELP blog. Surprisingly NJ is not one of the seven.

* Many sincere thanks to fellow tax blogger, and fellow artisan, Mary O’Keeffe of BED BUFFALOES IN YOUR TAX CODE for her kind words in defending my right to trust my own brain over a flawed software package in her post “Musings on Artisan Bakers and Tax Preparers”.

Mary, I do think it is just as much fun to prepare a tax return “artisanally” as it is to eat freshly baked bread – which is why I still do it after 39 seasons. And if I am ever in the Albany-Schenectady-Saratoga Springs-Troy area I will take you up on your offer of a breakfast at Perreca's Bakery.

* Mary follows up her defense of me with a retraction of her suggestion that I try the “Free Fillable Forms” program offered by the IRS in the appropriately named post “I Withdraw my Suggestion of Free Fillable Forms!”.

I had heard about this program last year, but was skeptical because, like the other IRS free file option, it was maintained by a 3rd party vendor and was not a direct transmittal by and to the IRS.

Mary now joins another well-respected voice in the tax world in wanting what I do –

And I agree with Nina Olson {IRS National Taxpayer Advocate – rdf}. The Free Fillable Forms ought to be hosted on secure IRS servers, so taxpayers know that their sensitive and confidential data is going directly to the IRS, not to an unnamed private company.”

If you ever thought of using the IRS “Free Fillable Forms” program it is very important that you read this post.

* Tonya Moreno discusses the “Florida Tax Amnesty” at ABOUT.COM: TAX PLANNING: US. Florida does not have a state individual income tax, but the amnesty program covers a lot of other taxes.

* No wonder governments are all facing historic deficits. ACCOUNTINGWEB.COM tells us one way the IRS is spending its budget in the article “Collecting Unpaid Taxes Four Pennies at a Time”.

* We begin and end this BUZZ with the Tax Foundation’s TAX POLICY BLOG, from whence comes the word that “New CBO Report Shows Rich Paying More than Fair Share”.

According to the post -

A new report by the Congressional Budget Office undermines President Obama's constant refrain that the "rich" are paying less than their share of federal taxes and that the middle class is over burdened. The report, Average Federal Tax Rates in 2007, shows that the wealthiest 20 percent of households earned 55.9 percent of all income but paid 86 percent of federal income taxes and 68.9 percent of all federal taxes.”

TTFN

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