Tuesday, November 3, 2015

WHAT’S THE BUZZ, TELL ME WHAT’S A HAPPENNIN’ – TUESDAY EDITION

My “tweet” from last week, a post to the #TrumpTODAY thread in response to the “Town Hall” meeting with Trump hosted by TODAY, was my most popular ever.  As of this writing it has gotten 78 “retweets” and 134 “favorites”! 

Here is what I tweeted –

The most disturbing development in American politics in my lifetime is #DonaldTrump taken seriously as Presidential candidate. #TrumpTODAY

Would you have “retweeted” or “favorite” it?

BTW – I wish this clock-changing thing was reversed.  I hate losing an hour during the tax filing season.

* Elaine Maag is dead wrong with her suggestion that “The IRS Could Improve EITC Compliance by Regulating Tax Preparers at TAX VOX, the blog of the Tax Policy Center.

See my comment to her post for the real answer to reducing EITC tax fraud.  

* The IRS now issues a weekly “Tax Preparedness Series” of press releases.  The second in the series correctly reminds us that “Most Retirees Need to Take Required Retirement Plan Distributions by Dec. 31”. 

Most RMD-takers wait until the end of the year to take the distribution to maximize the tax-deferred accrual of earnings.  And this year many are waiting to take their RMD to see if the idiots in Congress are going to extend the “tax extenders” in time to make the direct tax-free transfer from an IRA account to a church or charity, which would satisfy one’s RMD obligation.

* FYI, the first entry in the IRS “Tax Preparedness Series” was “Employees Should Take Time to Check Withholding”.   

* Jason Dinesen makes a discovery of interest to tax preparers and small business corporations in “Corporate Tax Status Determined By Federal Law, Not State Law” at DINESEN TAX TIMES (highlight is mine) -

So according to the IRS, if a corporation loses its corporate status at the state level but continues to operate as a corporation, it should continue to file corporate tax returns.”

The highlighted “but continues to operate as a corporation” is the important condition.  Often a corporation just stops operating – basically going out of business – and the state revokes the corporate charter for not filing reports and returns, such as a required Annual Report.  In such a case I believe the revocation of the corporate charter would mean a termination of the corporation, and no more federal 1120 or 1120S returns would be required.

Often a state will inadvertently revoke an active corporation’s charter because it believes an Annual Report was not filed, and the corporation must pay often excessive fees to be reinstated, even if the revocation resulted from the state’s FU.

* Here is a TWTP from last December that bears repeating/re-reading – “Everybody Ought to Have an IRA”.  

* Anne Tergesen of the WALL STREET JOURNAL identifies “A Tax Deduction That’s Often Overlooked”.

I believe this is the first time that I have seen anyone write about this deduction. However it is truly a rare deduction – one that I have only claimed two or three times in 40+ years.  It is even more obscure now because of the $5 Million + estate tax exemption.

However if it does apply it can be a real tax-saver.  As Anne points out –

Unlike many other such deductions, it can be claimed in full because it’s exempt from a rule that requires you to add up your deductions and claim only the amounts that exceed 2% of adjusted gross income, says IRA expert Ed Slott.”

So if you inherited an IRA or 401(k) account from a very, very wealthy relative you should check it out.

* Jean Murray implores, “Don't Make These 5 Small Business Money Mistakes” at ABOUT.COM.

* And, also at ABOUT.COM, William Perez provides a real education in “Employee Stock Purchase Plans”.

* Paul Neiffer reports “File & Suspend Will Be No More” at FARM CPA TODAY.  He is talking about a strategy for maximizing Social Security benefits used by married couples.  The brief post links to two other articles you should read with more detailed information on the subject.

* Jim Blankenship also addresses this issue in "The Death of File & Suspend and Restricted Application” at GETTING YOUR FINANCIAL DUCKS IN A ROW.

* Some tax reform nostalgia from Scott Greenberg at the TAX POLICY BLOG of the Tax Foundation – “The Bush Tax Reform Panel, Ten Years Later”.

I remember writing about the panel’s recommendations at the time – but TWTP was at a different host then and I cannot access these posts to provide a link.

TTFN

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