Wednesday, December 26, 2012
WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’ – WEDNESDAY EDITION
Welcome to the last BUZZ of 2012! It’s a meaty one!
* Don’t forget my special offer for MY BEST TAX ADVICE!
* Check out my THE TAX PROFESSIONAL post about a Christmas Eve “Twitter Conversation”. Tax pros – what do you think?
Russ Fox of TAXABLE TALK responded in “Sometimes the Cynics Are Right.
* One of my posts was included in TAXPRO TODAY’s “In the Blogs: The Graying Year”, which gave us “highlights from some of our favorite tax bloggers this week, as 2012 starts to look mighty grey”.
And TAXPRO TODAY had previously “tweeted” about me thusly via @TaxProToday –
“A true tax hero! RT @rdftaxpro: I will be typing W-2s on NYE!”
Hey, I have been typing W-2s on Christmas and New Years’ Eves for years now.
* Trish McIntire is, I expect, correct in calling the current fiscal cliff shenanigans a “Congressional Con” over at OUR TAXING TIMES.
I wouldn’t put anything past Congress - or even at this point BO, who is really only just the spokesperson for the idiot Democratic Party leaders - except having actual concern for the American public.
* Trish also puts the AMT patch fiasco in perspective for we tax professionals in “AMT, the Gift You Don't Have to Wrap!” (the highlight is mine) –
“Stuck in the middle of this mess are the tax pros. We are the ones who will have to deal with clients who can’t file for refunds they need now. We’ll have to explain why they’re refund is lower or gone due to AMT. And since we won’t be able to file returns, we won’t get paid. Tax Preparation is a seasonal business and for many of us, there is little cash left in January. Waiting until late March, could make for a long cold winter.”
* Christopher Bergin of THE TAX ANALYSTS BLOG hits the nail directly on the head, dead center, with his sarcastic, but totally true, post “Tin Ear Tinhorns” – one of the best ones on the subject.
He has read the minds of the idiots in Washington, and quotes their thoughts –
“Merry Christmas from Washington, D.C. Here’s your bag of coal.
It’s chilly here in Washington. We don’t care how it is where you are. We don’t care about your 401k plan. We don’t care about whether you have to pay the alternative minimum tax for this year. We don’t care if you don’t get your tax refund on time or if you have to wait to file your tax return until July. We just don’t care.
In Washington, all we see is ourselves. We drive around in our self-important haze, yapping on our cell phones and cutting people off on I-66 because what we are doing is all that matters and is certainly more important than anything you’re doing.”
Chris is spot on in identifying what is broken in Washington –
“Our politicians don’t realize that there is a whole world beyond here. What’s amazing to me is that our politicians, who think they are so important, never take into account that their actions – or more precisely, their inaction – affect things like the stock market, business, the global economy, the citizens of this country for whom they work.
The fiscal cliff is nothing new. Other than it is the newest reindeer game that the politicians found to help them squabble over their egos.”
There is no doubt in my mind that, as Chris states, the current Congressional leaders “have literally demonstrated that they don’t have a clue about the nation’s fiscal problems and have equally demonstrated that they are willing to take us all over the fiscal cliff over their egos”.
Right on, Brother Christopher!
* Howard Gleckman presented “TaxVox’s 2012 Lump of Coal Awards”.
I agree with three of the “awards” -
“1. And the winner (of course) is the fiscal cliff. Congress and Obama created an artificial crisis for themselves, spent 18 months arguing and, so far at least, have accomplished nothing at all. Increasingly, policymakers are like that aunt and uncle who regularly ruin holiday dinners with their bickering. At first, we wanted to reach out and help them. Now we just wish they’d go away.
4. President Obama for a campaign almost entirely devoid of serious tax proposals. When it came to fiscal policy, Obama’s re-election could have been orchestrated by Jerry Seinfeld. It was about nothing.
7. The Tea Party. What do you call a political movement that flames out after one election cycle? Not only did many of their high-profile candidates lose in November, the loosely affiliated tea party groups have been remarkably silent on what should be their signature issue–the fiscal cliff and long-term deficit reduction. The tea party remains a force in some state legislatures, but its influence in Washington is rapidly fading.”
But take special exception to one -
“2. Lawmakers of both parties who continue to insist they can pay for rate cuts and deficit reduction by “closing loopholes.” This is the tax equivalent of saying you can balance the budget by reducing waste, fraud, and abuse. The deductions for mortgage interest, charitable giving, and state and local taxes are intentional subsidies. They are not accidental loopholes.”
I do agree that lawmakers of both parties deserve lumps of coal – but for a different reason (because they are idiots!). I very sincerely believe that we can make a big dent in the deficit by reducing waste, fraud, and abuse – since there is so much of it in the budget at each level of government. And while I do support maintaining the deductions for mortgage interest (specifically acquisition debt on a primary residence), charitable giving, and state and local taxes, there are tons of other “loopholes” and “tax expenditures” that can and should be closed.
* Jason Dinesen of DINESEN TAX TIMES puts in his more than 2 cents worth on the new expanded Form 8867 in “New Preparer Requirements on Earned Income Credit = Higher Fees for Clients”.
Jason agrees with me that the new “requirements on tax preparers who prepare tax returns that claim the Earned Income Credit” are “basically making tax preparers become social workers”.
While he will not turn away EIC filers, as I will, he does say (highlight is mine) –
“My fee for returns claiming the EIC will increase more than $30 over what I have charged for EIC in the past. There’s simply too much work involved, and too much risk on my end of me being hammered by the IRS if I don’t check the right boxes on the Form 8867.”
* The IRS issued the following statement regarding payroll withholding tables -
“We are aware that employers have questions with respect to 2013 withholding. Since Congress is still considering changes to the tax law, we continue to closely monitor the situation. We intend to issue guidance by the end of the year on appropriate withholding for 2013.”
Let’s hope they get it right.
* Kay Bell put a lump of coal in our stocking on Christmas Eve by explaining “Average Tax Bill Increase if We Fall Off the Fiscal Cliff? $3,446” at DON’T MESS WITH TAXES.
The post has a good chart that shows the possible tax bill increase at various levels of income so you can see what the inaction of the idiots in Washington could cost you.
* MISSOURI TAXGUY, and McTax Hangout host, Bruce McFarland asks, and answers, a question that I had asked about two years ago (and Bruce was one of the tax pros I consulted at the time) – “Can an LLC be Taxed as an S Corp?”.
The answer - “Yes, it can. An LLC can be taxed as an S Corp, assuming it qualifies for S Corp taxation status.”
THE LAST WORD –
What are the chances the idiots in Washington will perform a miracle tomorrow or Friday?
The 2013 tax filing season is certainly going to be an interesting one!