Friday, November 2, 2012
WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’ - SPECIAL FRIDAY EDITION
SANDY has created a mucking fess in New Jersey to rival the Tax Code. Many of my friends and clients all over the Garden State, including my sister in Hudson County, were, or as of this writing still are, without power. In my new hometown in Northeast PA only 16 PPL customers were without power, and I was not one of them.
However, SANDY has not affected the tax BUZZ. Lots to talk about – and I can again provide a special Friday installment.
* TAXGIRL Kelly Phillips Erb gives us some advice on “Helping Out After Hurricane Sandy”.
Especially good advice for those who want to help by donating money -
“Be wary of personal solicitations on your doorstep or over the phone. Make sure that your gifts made by checks or credit card gifts are secure.”
“Check out the credentials of a potential donee/charitable organization before you make a donation.”
“The rules for charitable giving still apply even in situations that feel chaotic. That means that only contributions to qualified tax-exempt charitable organizations are deductible – donations to individuals don’t count. Be sure to document your gifts and get receipts.”
* Jason Dinesen continues the saga with “Tax Identity Theft – Part 8” at DINESEN TAX TIMES.
I echo what fellow tax blogger Joe Kristan has “tweeted” to Jason –
“You've done a great job putting a face on the identity theft epidemic.”
* Click here to download the Tax Foundation’s 198-page report “Location Matters: A Comparative Analysis of State Tax Costs on Business”.
* Say what you will about the IRS, the Service’s website certainly provides great resources for tax information – including over 150 videos. Click here for the IRS video page.
* Eva Rosenberg, the internet’s TAX MAMA (is there a Tax Papa?) talks about “Reverse Mortgages”, which have become more popular lately via celebrity-fronted tv ads.
“Mama” explains that there is no current mortgage interest deduction for a reverse mortgage –
“In a reverse mortgage, the homeowner isn’t paying any interest. They are receiving loan draws on a monthly basis. All the interest is deducted at the end, when the mortgage is paid off.
Remember, a cash-basis taxpayer only gets deductions when s/he PAYS a bill.”
And warns –
“These loans are not a benign and helpful as they seem to be. They can cost the senior borrower their home, if they are not careful – even though the big print says they can stay in the home until they die. It’s not exactly true.”
* Joshua Wilson reminds us why it is important that you should “Reconcile Your Bank Accounts: Business & Personal”.
* The Tax Foundation has a “MyTaxBurden” Tax Policy Calculator.
“This calculator gives you an estimate of your federal tax burden under a variety of scenarios. The three default scenarios are: full expiration of all Bush-era and Obama tax cuts, the Republican plan to extend the Bush-era tax cuts (H.R. 8, the Job Protection and Recession Prevention Act of 2012), and President Obama's plan to partially extend these cuts for families making under $250,000 per year ($200,000 for single filers) as well as extending tax cuts in the 2009 stimulus bill.”
* Kristine McKinley has an online article that details “Social Security's Gift to Married Couples: The Spousal Benefit”.
* On Halloween Kay Bell of DON’T MESS WITH TAXES listed “6 Tax Terrors and How to Overcome Them” at her BANKRATE.COM blog.
It is very simple to avoid these “tax terrors”. Hire a competent tax professional, either an Enrolled Agent (EA) or a Registered Tax Return Preparer (RTRP), give that person all the information he/she asks for, and be honest.
One word of warning. Kay suggests – “If your tax situation is not overly complicated, computer software might be enough to help you file with a bit more confidence”. Sorry, Kay, but this is simply not true. No tax preparation software package is a substitute for knowledge of the Tax Code, and no tax preparation software is a substitute for a competent tax professional.
* The Mercatus Center of George Mason University in Arlington VA has published new study “A Trillion Little Subsidies: The Economic Impact of Tax Expenditures in the Federal Income Tax Code”.
“(The) study looks at the ten largest tax expenditures for individuals and corporations and weighs the economic impact of each. The study also reviews the intended-vs-actual beneficiaries and outcomes of particular tax expenditures and considers the economic and political implications of eliminating all expenditures in a single swipe.”
THE FINAL WORD
As long as you are going to send out Christmas cards this holiday season why not purchase them from a charity.
I have been sending out Christmas cards from the American Humane Association for years now.
Click here to visit the Association’s Holiday Card Center.