Saturday, October 13, 2012
WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’
* CNBC gives us the Reuters item “IRS Names Acting Commissioner, Shulman Steps Down”.
“The Internal Revenue Service said on Wednesday that Steven Miller will become acting head of the tax agency after Doug Shulman, the present commissioner, steps down on November 9.
Miller, IRS deputy commissioner for services and enforcement since September 2009, is a 25-year veteran of the agency.”
As the item points out, “The commissioner's post is a presidential appointment subject to Senate confirmation”. So the nomination of a new Commissioner “hinges on the outcome of the November 6 presidential election”.
* Trish McIntire answers the question “So what can you do if you’re not going to make the October15th deadline?” in “Return Still Not Done” at OUR TAXING TIMES.
Very important to remember (highlight is mine) –
“You need to get the return finished and filed as soon as you can. That depends on you. It’s not your tax pro’s job to chase you down and get the information from you. You need to take responsibility for your return. That means calls and emails to get missing info from the sources. It means looking through papers to find the documents you need. Once you have the missing info, take it to the tax pro and get the return finished.”
* As promised, Jason Dinesen continues his 3-part series on the question “Would a Name Change Help Enrolled Agents?” at DINESEN TAX TIMES with “Part 2”.
Jason discusses the “Great Name Change Investigation” conducted by the National Association of Enrolled Agents.
A reminder – I had suggested “Enrolled Tax Return Preparer” to tie in with the new RTRP designation.
I look forward to Part 3.
* The Tax Foundation’s TAX POLICY BLOG “Chart of the Day” on Wednesday concerned “Refundable Credits and Negative Income Tax Rates”.
“The majority of nonpayers receive ‘refundable’ credits even though they had no income tax liability. The Congressional Budget Office now estimates that because of the large amount of refundable tax credits, the bottom 40% of households now have negative effective tax rates. Remarkable, the effective tax rate for the middle fifth of households is nearing zero because of the recent expansion of tax credits.”
* And Thursday’s chart dealt with “Payroll Taxes and Refundable Credits”.
“Defenders of tax credits often say that while nonpayers may not pay income taxes, they do at least pay other taxes such as Social Security payroll taxes (FICA). However, it turns out that refundable tax credits have become so generous that their value now exceeds the payroll taxes paid by millions of taxpayers and their employers. Indeed, Congress’s Joint Committee on Taxation estimated that in 2010, 32.1 million filers would receive more in refundable credits than their share of FICA taxes, while 15.5 million filers would get more back in refundable tax credits than both the emplouee and employer share of FICA taxes.”
* Oi vey! TAX PRO TODAY reports that “Fire Destroys Mail Headed to Jersey Tax Division!"
“A delivery truck carrying mail addressed to the New Jersey Division of Taxation was involved in an accident on the New Jersey Turnpike and caught fire on September 11, according to the State of New Jersey Department of the Treasury and most of the truck’s contents burned.
U.S. Postal Service officials reported that the destroyed mail originated in North Jersey and had been picked up from street collection boxes located in Bergen, Essex, Hudson, Hunterdon, Middlesex, Monmouth, Morris, Passaic, Somerset, Sussex, Union and Warren counties. The N.J. Division of Taxation could not determine which returns, payments, correspondence or other mail were destroyed.”
It looks like I moved out of NJ just in time. I do not think I mailed anything to the NJDOT from my former Hudson County at that time.
I am used to the NJDOT totally ignoring correspondence in the past. This time they actually have an excuse.
* FREE FROM BROKE deals with the question “Should I Use the Home Office Tax Deduction for My Home Business?”.
The post is absolutely correct when it says -
“Here’s the thing: if you have a dedicated space in your home that is used only for business you have every right to deduct a portion of your rent/mortgage, utilities, security, and other associated home costs. Those deductions are part of the Internal Revenue Service code and not taking them is letting the government have more of your money that it deserves.”
It covers the “two keys to doing the home office tax deduction correctly” –
· Make Sure Your Deductions are Legal
· Make Sure You Document Your Deductions
However it lies, and perpetuates a common urban tax myth, when it advises, “The easiest way to avoid all of this hassle is to pay a Certified Public Accountant to do your taxes”.
This is simply not true. An Enrolled Agent (EA) or current or potential Registered Tax Return Preparer (RTRP) is a better choice than a CPA. To be honest, a specific CPA may be your best choice for the “easiest way to avoid all this hassle”, but it is because of the training and experience (and other factors) of that specific person and has nothing to do with the existence of the initials CPA after his/her name.
* Once again proving that bloggers love lists, TaxGirl Kelly Phillips Erb lists “9 Tax-Related Myths About Selling Your Home” at FORBES.COM.
Pay special attention to #8. This ridiculous myth (a 3.8% sales tax on the sale of your home) may still be making the email rounds.
* The IRS offers “Five Tips for Recently Married or Divorced Taxpayers with a Name Change”.
The first tip is an important one, as I have often seen problems in this area in the past –
“If you took your spouse’s last name -- or if you hyphenated your last names, you may run into complications if you don’t notify the SSA. When newlyweds file a tax return using their new last names, IRS computers can’t match the new name with their Social Security number.”
Number 3 tells you what to do –
“Informing the SSA of a name change is easy. Simply file a Form SS-5, Application for a Social Security Card, at your local SSA office or by mail and provide a recently issued document as proof of your legal name change.”
And, as #4 tells us –
“Form SS-5 is available on SSA’s website at http://www.socialsecurity.gov, by calling 800-772-1213 or at local offices.”
* Jean Murray identifies "3 Steps to Saving on Business Taxes for Creative Types" at ABOUT.COM.
Jean always has good advice for small business taxpayers -
“Whatever type of creative activity you are involved in, you are creating expenses as well as products. If you set yourself up as a legitimate business, you can deduct those expenses from your tax return (usually on Schedule C). If your business expenses result in a loss, you can use that loss to offset other income. But this only works if you can prove your business expenses are legitimate.”
THE FINAL WORD –
While I more often than not find the editor’s commentary distasteful, I enjoy reading local “adzine” OUR TOWN for its jokes.
Here is one from the latest issue (slightly edited) –
Sam walks into a café with a shotgun in one hand and the other hand pulling a male buffalo. He says to the waiter, “Coffee, please”.
The waiter gets Sam a tall mug of coffee. He drinks it down, turns and blasts the buffalo with the shotgun, causing parts of the animal to splatter everywhere, and walks out of the café.
The next morning Sam returns, again with a shotgun in one hand and pulling a male buffalo with the other. He walks up to the waiter and says, “Coffee, please”.
“Whoah, buddy!” the waiter says. “We’re still cleaning up your mess from yesterday. What was that all about anyway?”
Sam smiles and replies –
“I am training for the position of Senator in the US Congress. I come in, drink coffee, shoot the bull, leave a mess for others to clean up, and disappear for the rest of the day.”