Sunday, December 28, 2008

Foreclosure, IRS and Celebrities


One of my favorite rappers Doug E Fresh best known for his '80s hit "The Show" and "Loddi Doddi" has been hit with three foreclosure actions by banks looking to collect more than $3.5 million in unpaid mortgages on a trio of his Harlem homes. Doug E Fresh is also being chased by American Express for nearly $60,000 in credit-card debt, and the IRS just slapped him with a $367,000 tax lien on top of more than $40,000 owed to the state tax collector, records show.

Singer Tionne “T-Boz” Watkins of TLC is facing foreclosure on her home. T-Boz's five-bedroom, nearly 10,000-square-foot home in the gated Sugarloaf Country Club community will be put up for auction in January. According to T-Boz, the home involved in foreclosure proceedings may have to do with her ex-husband Mack 10." This isn't the first time the singer has been confronted with financial difficulties, back in 1995 as a member of the group TLC, the group filed for bankruptcy.

Other celebrities also facing foreclosure on one or more of their properties is American Idol winner Fantasia Barrino. Fantasia's $1.3 million, 6,200 square foot home has been scheduled for auction in January. She defaulted on a mortgage she took out in 2007.

Tonight Show sidekick Ed McMahon was close to losing his $6.25 million home after falling behind more than $644,000 behind on $4.8 million in mortgage loan payments. Thankfully for him, he had a friend in Donald Trump who bailed him out of his troubles allowing him to keep his home. I know the other celebrities wish they were so lucky.



Thursday, December 25, 2008

Merry Christmas





I hope everyone have a safe and joyous holiday.

Monday, December 22, 2008

Tax Amnesty


State after state is facing a disastrous drop-off in tax revenue because of the stock market collapse, the housing foreclosure crisis, and the recession. As a result, many lawmakers are being forced to think outside the box in order to develop creative solutions to close current and future projected budget deficits. One solution that seems to be gaining momentum is tax amnesty. Under a tax amnesty program, individuals and businesses would be allowed to pay their past-due tax bills with little or no penalties or interest.


Three years ago, Indiana raised about $245 million dollars over three months by allowing individuals and businesses to clear their overdue tax obligations without penalties of any sort. Other states inspired by Indiana's success, are either experimenting with or discussing their own amnesty programs,


Nevada for example raised 41 million dollars in just under four months this year while giving up 14 million dollars. The result of Nevada's tax amenesty is that they earned approximately $3 for every $1 given up in penalties or interest. Oklahoma, generated about twice as much as it expected from its offer of amnesty, raising $82 million through its 90-day Clean Slate program for businesses and individuals. New York has a program under way, and Connecticut and Massachusetts are drawing up theirs. California debated one before rejecting it in favor of stiffer penalties. Delaware's incoming governor campaigned on the idea. A similar program is being considered for Louisiana when its lawmakers return in April.

New York, which has a $1.5 billion deficit, began a limited amnesty last January that covers income, corporate and sales taxes. The state has collected $11 million so far and hopes to take in $30 million.

Connecticut Gov. Jodi Rell has warned that the state faces nearly $6 billion in deficits over the next two fiscal years. The state is hoping to generate $40 million by instituting a 56-day tax amnesty program next spring. It will let taxpayers pay their late state taxes without penalty, and with a 25 percent reduction in interest.

Many states are reluctant to offer amnesty, arguing that its rewards cheaters, discourages honest taxpayers and poaches revenue the states will collect in the future — especially as they improve the databases they use to catch delinquents. They worry, too, that people will hold back on their taxes and simply wait for the next amnesty. I guess this is what the lawmakers in California were thinking since they rejected a tax amnesty program as a way to generate tax revenues while the state is on course to run out of money in 60 days.

Friday, December 19, 2008

Updated Publication 17 for 2008

The IRS has published an updated version of its comprehensive tax guide for individuals for use in preparing 2008 tax returns: The updated on-line version of Publication 17, Your Federal Income Tax, contains more than 900 interactive links.

Publication 17 has been updated with important changes for 2008, including information on the new recovery rebate credit, new first-time-homebuyer credit, and an additional standard deduction for real estate taxes. It has been published annually by the IRS for more than 65 years and has been available on the IRS Web site since 1996.

As in prior years, the publication provides information on how to file an individual tax return, what to include as income, how to calculate capital gains and losses, how IRAs and other expenses can affect how much income to report, whether to take the standard deduction or itemize, and how to figure taxes and credits.

IRS To Help Distessed Homeowners

T
he IRS has announced that it will be providing relief to financially distressed homeowners to avoid having a federal tax lien impair their ability to either sell or refinance their homes.

If a taxpayer has a federal tax lien against his property, and the taxpayer is looking to refinance or restructure his loan, the taxpayer or the taxpayer's representative may request that the IRS make the tax lien secondary to that of the lending institution restructuring or refinancing the loan. For homes being sold for less than the mortgage lien, the taxpayer or its representative may request that the tax lien be discharged. The discharge does not relieve the taxpayer of his responsibility to pay the taxes owed. It merely removes the lien from the property so that it can be sold.

The process to request a discharge or a subordination of a tax lien takes approximately 30 days after the submission of the completed application, but the IRS will work to speed those requests in wake of the economic downturn.

“We don’t want the IRS to be a barrier to people saving or selling their homes. We want to raise awareness of these lien options and to speed our decision-making process so people can refinance their mortgages or sell their homes,” said Doug Shulman, IRS commissioner. “We realize these are difficult times for many Americans,” Shulman said. “We will ensure we have the resources in place to resolve these issues quickly and homeowners can complete their transactions.”

To apply for a certificate of lien subordination, people must follow directions in Publication 784, How to Prepare an Application for a Certificate of Subordination of a Federal Tax Lien. Again, there is no form but there must be a typed letter of request and certain documentation. The request should be mailed to one of 40 Collection Advisory Groups nationwide. See Publication 4235, Collection Advisory Group Addresses, for address information.

Saturday, December 13, 2008

Charitable Donations Rules




As the end of the year approaches and our minds are focused on the holiday season, we can help others in this time of economic distress and lower our tax bill by making donations to charity prior to the end of the year.

Some of the the items you can donate are furniture, furnishings, electronics, appliances, linens, clothing and of course cash. In order for your clothings or household items to be deductable, they must be in good used condition or better. Torn or stained clothing does not qualify. Clothing or household items which you claim a deduction of over $500 does not have to be in good used condition or better if you include a qualified appraisal of the item with the return.

Donations of money include those made in cash, check, electronic funds transfer, credit card, and payroll deduction. So if your employer lets you make a charitable donations through automatic payroll withdrawls, you should retain a pay stub, a Form W-2 wage statement or other document furnished by the employer showing the total amount withheld for charity, along with the pledge card showing the name of the charity.

To deduct any charitable donation of money, regardless of amount, you must have a bank record or a written communication from the charity showing the name of the charity and the date and amount of the contribution. Bank records include canceled checks, bank or credit union statements, and credit card statements. Bank or credit union statements should show the name of the charity, the date, and the amount paid. Credit card statements should show the name of the charity, the date, and the transaction posting date.
Contributions are deductible in the year made. Thus, donations charged to a credit card before the end of the year count for 2008. This is true even if the credit card bill isn’t paid until next year. Also, checks count for 2008 as long as they are mailed this year. You must also obtain ackowledgement from the charity for donations of property or cash of $250 more. For all donations of property, including clothing and household items, get from the charity, if possible, a receipt that includes the name of the charity, date of the contribution, and a reasonably-detailed description of the donated property. If a donation is left at a charity’s unattended drop site, keep a written record of the donation that includes this information, as well as the fair market value of the property at the time of the donation and the method used to determine that value.

Check that the organization is qualified. Only donations to qualified organizations are tax-deductible. IRS Publication 78, available online and at many public libraries, lists most organizations that are qualified to receive deductible contributions. The searchable online version can be found at IRS.gov under “ Search for Charities.” In addition, churches, synagogues, temples, mosques and government agencies are eligible to receive deductible donations, even though they often are not listed in Publication 78.

Rules for Charitable Donations


As the end of the year approaches and our minds are focused on the holiday season, we can help others in this time of economic distress and lower our tax bill by making donations to charity prior to the end of the year. Some of the the items you can donate are furniture, furnishings, electronics, appliances, linens, clothing and of course cash.

In order for your clothings or household items to be deductable, they must be in good used condition or better. Torn or stained clothing does not qualify. Clothing or household items which you claim a deduction of over $500 does not have to be in good used condition or better if you include a qualified appraisal of the item with the return.

To deduct any charitable donation of money, regardless of amount, you must have a bank record or a written communication from the charity showing the name of the charity and the date and amount of the contribution. Bank records include canceled checks, bank or credit union statements, and credit card statements. Bank or credit union statements should show the name of the charity, the date, and the amount paid. Credit card statements should show the name of the charity, the date, and the transaction posting date.

Donations of money include those made in cash, check, electronic funds transfer, credit card, and payroll deduction. So if your employer lets you make a charitable donations through automatic payroll withdrawls, you should retain a pay stub, a Form W-2 wage statement or other document furnished by the employer showing the total amount withheld for charity, along with the pledge card showing the name of the charity.


Contributions are deductible in the year made. Thus, donations charged to a credit card before the end of the year count for 2008. This is true even if the credit card bill isn’t paid until next year. Also, checks count for 2008 as long as they are mailed this year. You must also obtain ackowledgement from the charity for donations of property or cash of $250 more. For all donations of property, including clothing and household items, get from the charity, if possible, a receipt that includes the name of the charity, date of the contribution, and a reasonably-detailed description of the donated property. If a donation is left at a charity’s unattended drop site, keep a written record of the donation that includes this information, as well as the fair market value of the property at the time of the donation and the method used to determine that value.

Check that the organization is qualified. Only donations to qualified organizations are tax-deductible. IRS Publication 78, available online and at many public libraries, lists most organizations that are qualified to receive deductible contributions. The searchable online version can be found at IRS.gov under “ Search for Charities.” In addition, churches, synagogues, temples, mosques and government agencies are eligible to receive deductible donations, even though they often are not listed in Publication 78.
For individuals, only taxpayers who itemize their deductions on Form 1040 Schedule A can claim deductions for charitable contributions. This deduction is not available to people who choose the standard deduction, including anyone who files a short form (Form 1040A or 1040EZ). A taxpayer will have a tax savings only if the total itemized deductions (mortgage interest, charitable contributions, state and local taxes, etc.) exceeds the standard deduction. Use the 2008 Form 1040 Schedule A, available now on IRS.gov, to determine whether itemizing is better than claiming the standard deduction.
For all donations of property, including clothing and household items, get from the charity, if possible, a receipt that includes the name of the charity, date of the contribution, and a reasonably-detailed description of the donated property. If a donation is left at a charity’s unattended drop site, keep a written record of the donation that includes this information, as well as the fair market value of the property at the time of the donation and the method used to determine that value.Additional rules apply for a contribution of $250 or more.
The deduction for a motor vehicle, boat or airplane donated to charity is usually limited to the gross proceeds from its sale. This rule applies if the claimed value of the vehicle is more than $500. Form 1098-C, or a similar statement, must be provided to the donor by the organization and attached to the donor’s tax return.
If the amount of a taxpayer’s deduction for all noncash contributions is over $500, a properly-completed Form 8283 must be submitted with the tax return.

Sunday, December 7, 2008

AMT Explained


Want to understand the true essence of pain? Watch the face of a taxpayer who completes a tax return showing a $2,000 refund. Then remind him of the Alternative Minimum Tax (AMT), and tell him it results in a net $3,000 in additional taxes owed. This is what is happening to more and more middle class Americans. However, with a good idea of what you’re up against, you can plan for the AMT and, I hope, avoid it entirely

How does the AMT work? Well, Congress designed the AMT in 1969. It's supposed to ensure that everyone especially the most affluent pays at least some tax. The AMT mandates a recomputation of your federal taxable income at a flat tax of 26%, and you are required to pay the higher of two tax bills. It becomes a flat tax of 28% on AMT taxable income over $175,000 for all taxpayers except those who file "married filing separately." For these taxpayers the 28% rate applies to income above $87,5000. The rate is applied on your income after your standard or itemized deductions but before your personal exemptions. Now, here is where the pain starts, the amount (line 37 on your 1040) is then increased by what are called “tax preferences.” and is reduced by an exemption amount that phases out as your AMT taxable income increases.

“Tax preferences” are nothing more than tax benefits or deductions that Congress has decided to give you under the regular tax system and then take away from you under the AMT tax system. Here’s what I mean. If you took the standard deduction, forget it. It’s a tax preference. Did you itemize? Medical expenses are normally deductible to the extent they exceed 7.5% of your adjusted gross income under the regular tax system but not for the Alternative Minimum Tax system. Under the AMT computation, you can only deduct the excess over 10% of your adjusted gross income. Forget the deduction for state and local income taxes or property taxes. They’re all tax preferences, and are added back into your AMT income. Congratulations if you live in a high income-tax state like New York or pay substantial real estate or personal property taxes! So watch out if your state is talking about increasing property or state taxes to close budget gaps. Do you itemize? Kiss your miscellaneous itemized deductions goodbye. That means investment expenses, tax preparation costs, job hunting expenses and all non-reimbursed employee business expenses lose their tax benefits.

By the year 2010 and probably regardless of the Bush tax cuts, the number of taxpayers affected by the AMT will rise to as many as 17 million, or about one in six. The revenue gain for the Treasury: from $5.8 billion a year to $38.2 billion a year. The reason more of us will be affected by the AMT in 2010 than now is that the AMT, unlike normal tax brackets, isn’t indexed for inflation. If it were indexed, as much of the tax code is, the projected increase would only be to 2.1 million taxpayers. Among the taxpayers increasingly exposed will be those with large families because of exclusions of such items as child credits. So plan, plan, plan!

Friday, December 5, 2008

More Year End Planning Part 3



Make a charitable transfer:
Individuals who are at least 70½ years old can also make a tax-free transfer from their IRA of up to $100,000 to a charity, as long as the transfer is direct to the organization. This can be useful for retirees who must take required minimum distributions from an IRA, but since the money goes untaxed, donors do not get to deduct the contribution.

Prepay bills: Prepaying things such as January's mortgage bill, a child's spring semester tuition, local property taxes or state income taxes and even tax-advisory and preparation fees can help drive up the amount of deductions you can itemize.

  • Prepay Deductible Expenditures: Early payments for some deductible expenditures that are made this year -- instead of in early 2009 -- will produce higher write-offs for your 2008 tax return. This strategy makes sense if you expect to be in the same or lower tax bracket next year. Of course, that’s a big "if," but let’s assume it’s the case. Monthly mortgage payment Perhaps the easiest expense to prepay is your house payment due Jan. 1. By paying it this year, you'll have 13 months' worth of mortgage interest to write off for 2008. You can pull the same prepayment trick with a vacation home. By prepaying this year, you’ll have to continue the policy for next year and beyond. Otherwise, you’ll only have 11 months of interest to deduct for the first year you stop.

  • State and local income and property taxes: Prepayment of state and local income and property taxes that aren't actually due until early next year can also generate a larger 2008 deduction. Thanks to a new tax-law provision, even non-itemizers can deduct real property taxes paid during 2008. However, the maximum write-off under the new rule is $1,000 for married joint-filing couples and $500 for others and the deduction cannot exceed the amount you actually pay by year's end. Do not do these prepayment drills if you know you’ll owe the dreaded alternative minimum tax (AMT) for this year. Write-offs for state and local income and property taxes are completely disallowed under the AMT rules. Therefore, prepaying these expenses will do little or no tax-saving good for AMT victims.

  • Medical expenses and itemized deductions: Also, consider prepaying expenses that are subject to limits based on your adjusted gross income (AGI). The two prime candidates are unreimbursed medical expenses and miscellaneous itemized deductions. Medical expenses are deductible only to the extent they exceed 7.5% of AGI. Miscellaneous deductions for investment expenses, tax preparation fees, tax advice, and unreimbursed employee business expenses are deductable to the extent they exceed 2% of AGI. If you can combine these expenditures into a single calendar year, you’ll have a fighting chance of clearing the AGI hurdles and getting some write-offs. Unfortunately, this strategy may not work for AMT victims. Under the AMT rules, medical expenses must exceed 10% of AGI to be deductible and miscellaneous itemized deductions are completely disallowed.

  • Prepay College Tuition: If your 2008 adjusted gross income (AGI) allows you to qualify for the Hope Scholarship or the Lifetime Learning higher education tax credits, consider prepaying college tuition bills for 2009 if that would result in a bigger credit on this year’s 1040 form. Specifically, you can claim a 2008 credit based on prepaying tuition for academic periods that begin in January through March of next year. If your 2008 AGI is too high to be eligible for the Hope or Lifetime credits, you might still be able to deduct up to $2,000 or $4,000 of college tuition costs. If so, consider prepaying tuition bills for academic periods that begin in the first three months of 2009 if that would result in a bigger write-off on this year’s Form

Business expenses: Smaller items also add up, so restocking work-related supplies, renewing subscriptions to professional journals or prepaying dues for professional organizations can also help reduce taxes.


Medical expenses: Review your medical bills to see whether the total spent is close to 7.5 percent of adjusted gross income. If your expenses are at or near that threshold, it might make sense to have other elective work done or prepay some expenses to take advantage of that deduction.


Make a gift: The law also allows taxpayers to deduct gifts of up to $12,000, or $24,000 for a married couple filing a joint return. What's more, there's no cap on gift deductions for educational and medical expenses if the payments are made directly to the educational organization or medical provider.


Think alternative energy or hybrid: Finally, there are tax credits available for several energy-saving investments, including installing alternative energy devices such as solar panels, fuel cells or wind turbines to provide electricity for a home, and for buying alternative fuel vehicles. There are tax credits available for the purchase of a hybrid or electric car. A list of the credits available for different models is available on the Internal Revenue Service Web site, http://www.irs.gov/.

Saturday, November 29, 2008

More Year End Planning Part 2

I always view Thanksgiving as a time for family getting together and being thankful for all of our blessings, and the start of the Christmas season when spending money on gifts becomes a priority. It is also a good time to do some end of the year tax planning so that we don't get any surprises when we file our tax returns.


Get organized: The first step in the planning process is to make sure your records are organized and up to date. Without records and without substantiating your deductions, you have no deductions.

Defer income into the new year: If you are scheduled to receive a bonus ask to receive it in January so that the additional income is not included in your 2008 AGI. For the self-employed, sending invoices out late in December could make it more likely you'll receive payment in the new year.

Check on capital gains and losses: It's important to find out whether you might have capital gains to report. A lot of mutual funds have been forced to sell assets as investors bailed out of the market. So despite the fact that the fund probably posted losses, investors might be receiving a capital gains distribution. In addition, you might want to consider selling some holdings that have lost value as the market tanked to offset any capital gains. Current law allows investors to claim up to $3,000 in short term capital losses.

Determine whether you're subject to AMT: The Alternative Minimum Tax, which was designed to make sure that high-income earners with multiple deductions pay at least some tax, now captures many upper middle-class workers because it is not indexed to inflation. So if you live in a state such as New York this is something you should be concerned about. Congress included a measure to adjust the AMT so that most people are exempt in the bailout bill, but figuring out whether you need to pay can still be a complicated task that might require help from a tax adviser.

Boost your charitable deductions: Any check written or item donated before Dec. 31 can be deducted. So if you haven't done this yet, clean out your closets and donate those old suits, dresses and other items that you aren't wearing any more as well as any furniture to charity. Since many organizations are also feeling pinched by the economic downturn. If you don't have much credit card debt, you can charge a donation before the end of the year and pay it off in 2009.

2009 Standard Mileage Rates

The Internal Revenue Service has issued the 2009 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2009, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 55 cents per mile for business miles driven
  • 24 cents per mile driven for medical or moving purposes
  • 14 cents per mile driven in service of charitable organizations

The new rates for business, medical and moving purposes are slightly lower than rates for the second half of 2008 that were raised by a special adjustment mid-year in response to a spike in gasoline prices. The rate for charitable purposes is set by law and is unchanged from 2008.

The business mileage rate was 50.5 cents in the first half of 2008 and 58.5 cents in the second half. The medical and moving rate was 19 cents in the first half and 27 cents in the second half.
The mileage rates for 2009 reflect generally higher transportation costs compared to a year ago, but the rates also factor in the recent reversal of rising gasoline prices. While gasoline is a significant factor in the mileage rate, other fixed and variable costs, such as depreciation, enter the calculation.

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for any vehicle used for hire or for more than four vehicles used simultaneously.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Saturday, November 22, 2008

IRS Increases Dollar Amounts On Tax Provisions


While President-elect Obama modifies his initial tax plans as a result of the current economic crisis, the Internal Revenue service has by law revised various dollar amounts on various tax provisions in order to keep pace with inflation. These revisions include the personal and dependency exemption, the standard deduction, the earned income credit, and the annual gift exclusion.


  • The value of each personal and dependency exemption, available to most taxpayers, is $3,650, up $150 from 2008.
  • The new standard deduction is $11,400 for married couples filing a joint return (up $500), $5,700 for singles and married individuals filing separately (up $250) and $8,350 for heads of household (up $350). Nearly two out of three taxpayers take the standard deduction, rather than itemizing deductions, such as mortgage interest, charitable contributions and state and local taxes.
  • Tax-bracket thresholds increase for each filing status. For a married couple filing a joint return, for example, the taxable-income threshold separating the 15-percent bracket from the 25-percent bracket is $67,900, up from $65,100 in 2008.
  • The maximum earned income tax credit for low and moderate income workers and working families with two or more children is $5,028, up from $4,824. The income limit for the credit for joint return filers with two or more children is $43,415, up from $41,646.

  • The annual gift exclusion rises to $13,000, up from $12,000 in 2008.

Some Year End Tax Planning


1. Book a tax-planning meeting in order to devise a year end strategy specifically for your firm. Why the need for fine-tuning? Some small companies' revenues are down for 2008, not because their business has declined but because pinched customers are paying their bills more slowly. As a result, additional revenue will trickle in as late payments during early 2009 just when tax rates may go. Some companies may have the equivalent of 10 months of income this year, and 14 next year and they may not want to defer additional income into 2009.

2. Take advantage of bonus depreciation.
For qualified assets placed in service in 2008, you may claim an extra 50% deduction in addition to normal depreciation and deductions available under the Internal Revenue Code's Section 179. The Section 179 "expensing" deduction allows a business to write off the full cost (rather than depreciating it over several years) of certain business assets, including machinery, vehicles, equipment, and computers, up to a certain dollar level. For 2008, the maximum deduction limit was increased to $250,000. The asset must be "placed in service" in 2008 in order to take advantage of the increased dollar limit for assets that will be expensed under section 179. Therefore, you cannot deduct the cost of a computer system you've ordered but that won't be operating in your office until January. "If you need a piece of equipment, make the purchase and get it placed in service in the same year.

3. If you have a vehicle that you use both for work and business, increase your business driving and decrease your personal driving to get the most out of the tax deduction for personally owned vehicles. If you use your vehicle for 50% business driving and 50% personal driving, try increasing your business driving in order to increase the allowale percentage of vehicle expenses as well as other vehicle expenses, like oil changes and maintenance.

Alternatively, you can choose to take the standard mileage rate for 2008. That was 50.5¢ per mile for the first half of 2008 and 58.5¢ per mile for the second half. Only small business owners that file Schedule Cs, such as sole proprietors, are allowed to choose which way to take their vehicle deductions.

4. If your company operates on the accrual basis for tax purposes, fix your employees' bonus amounts before Jan. 1, but pay them early next year. Generally, the bonuses aren't taxable to employees until 2009, but they can be deducted on your company's 2008 return so long as they're announced in 2008 and paid by Mar. 16, 2009.

5. If you're doing major renovations at your business location, make sure you schedule repairs and maintenance jobs separately. "Capital improvements aren't deductible as business expenses, however, ordinary and neccessary maintenance repairs are. Improvement costs are added to the 'basis' of the property for tax purposes." Lumping all the work into one project could cheat you out of 100% deductible business expenses.

6. Keep detailed records of collection efforts that will support any deductions you take for bad debt that becomes worthless in 2008. If you can't get one of those pinched clients to pay up, you can write the amount off provided you can show you made a good-faith effort to collect the debt. That means keeping records of telephone calls, letters, and other efforts you've made to get the money, including hiring a collection agency.

Saturday, November 8, 2008

IRS Is Looking For Taxpayers Who Haven't Received Their Stimulus Checks And Refund Checks

The Internal Revenue Service is looking for taxpayers who are missing more than 279,000 economic stimulus checks totaling about $163 million and more than 104,000 regular refund checks totaling about $103 million that were returned by the U.S. Postal Service due to mailing address errors.

It is crucial that taxpayers who may be due a stimulus check update their addresses with the IRS by Nov. 28, 2008. By law, economic stimulus checks must be sent out by Dec. 31 of this year. The undeliverable economic stimulus checks average $583. The regular refund checks that were returned to the IRS average $988.

All a taxpayer has to do is update his or her address once. The IRS will then send out all checks due. The Where’s My Stimulus Payment? tool on the IRS Web site is the quickest and easiest way for a taxpayer to check the status of a stimulus check and receive instructions on how to update his or her address. Taxpayers can update their addresses with the Where’s My Refund? tool on the IRS Web site. It enables taxpayers to check the status of their refunds. A taxpayer must submit his or her social security number, filing status and amount of refund shown on their 2007 return. The tool will provide the status of their refund and in some cases provide instructions on how to resolve delivery problems

In order to avoid these problems in the future, the IRS encourages taxpayers to choose direct deposit when filing their returns. Direct deposit eliminates lost, stolen or undeliverable checks because it refund checks can be deposited directly into either a checking or savings account.

Monday, September 29, 2008

More on Renewable Energy


With all the focus on the current economic crisis and who is to blame because of the obvious failure of congress to pass the wall street bailout or rescue plan, I am going to be different and mention another bill that our legislatures cannot seem to agree on which is bill HR6899. The Senate passed bill HR6899 by an overwhelming 93 to 2 vote which extends the investment tax credit for solar energy for eight years at a cost of 1.9 billion, the tax credit for residential solar property for eight years at a cost of 1.3 billion, extends the production tax credit for wind energy for one year, and the production tax credit for refined coal, biomass and marine renewable for another two years at a estimated cost of 5.8 billion dollars. These tax credits are scheduled to expire on December 31, 2008 if they are not extended by our elected officials. To pay for this bill, the Senate would freeze the tax deduction oil and gas companies receive for their domestic manufacturing operations at 6 percent, while other American manufacturers will see that deduction rise to 9 percent in 2010. That provision will raise $4.9 billion over 10 years. The bill would also raise another $2.2 billion by tightening the rules applying to oil and gas companies' taxes on income earned overseas. The bill would raise an additional $1.7 billion by increasing what producers must pay to the Oil Spill Liability Trust Fund from 5 cents per barrel to 8 cents per barrel starting in 2009 and then 9 cents a barrel in 2017.

A statement from the white House has indicated that the Bush administration opposes the language that targets the oil and gas industry. "At a time when consumers are already struggling with the high price of gasoline and diesel fuel, Congress should not put additional upward pressure on fuel prices."

The House has approved a similar bill by a vote of 267 to 166 but it differes in key areas fron the Senate bill. The House bill is fully paid for, by limiting tax breaks given to the oil and gas industry and closing loopholes hedge fund managers and corporations use to lower taxes on overseas income. The Senate bill is only partially paid for by through limiting tax breaks for oil companines. As a result of the difference in the two bills, the Senate and the House must now reconcile the bills so that it can ultimately be signed by the President.





Friday, September 19, 2008

The Senate is expected to Vote on Bill HR 6899




While looking into ways to reduce my energy bills since my electrical bill has doubled in five years, and my home heating cost has tripled, I came across some interesting information concerning federal tax credits for renewable energy.
The House of Representatives has voted and approved energy bill HR6899 and has sent the bill over to the Senate where it awaits approval. The Senate is expected to vote on extending the tax credits for wind, solar, geothermal and biomass energy. These tax credits are all set to expire at the end of the year. With the price of heating oil at approximately $4 per gallon, Congress and the next president meed to develop an energy policy that will cut U.S. reliance on foreign oil.

The proposed bill would extend the tax credits for producing electricity from wind energy for one year, and other renewable sources of energy such as solar, geothermal and wave energy for two years. Businesses would get a 30% tax credit for 8 years for investing in wind, solar, geothermal and ocean energy. Homeowners would get a 30% tax credit for 8years toward the cost of installing solar equipment on their homes. The tax credits will be paid for by eliminating the 18 million dollars in tax breaks to the oil companies who have had record profits as a result of the high cost for a barrel of oil. Once the Senate passes the bill, it goes to the President to sign. This part will be tough because some of the president's senior advisers have indicated that they will recommend that the president veto the bill.
Here is a brief discussion of some of the more popular sources of renewable energy:
  • Solar Energy is the conversion of sunlight into electricity through solar cells or photovoltaic.
  • Wind Energy is the conversion of the energy of the wind into electricity though wind turbines.
  • Biomass refers to the use of biological material, both living and dead, in order to generate electricity or fuel.
  • Geothermal Energy is the use of heat that is generated by the Earth for heating and air conditioning.
  • Wave Energy refers to the energy of the ocean's surface wave to produce electricity.

Wednesday, September 10, 2008

Tax Credits and alternative Fuels

If you are concerned about rising energy costs for electricity and home heating oil then check this out.



'Green' Energy Tax Credits Slow to Take Off
The Georgia Clean Energy Property Tax Credit came into effect July 1st. The credits give homeowners incentive to install clean-energy technologies.



Congress must take action to promote wind, solar energy
This nation must create viable alternatives to generate a substantial amount of energy in an effort to break our dependence on oil.

Let the sunshine in - Program supports homeowners who harvest sun's energy

New Jersey renergizing solar rebate program
New Jersey will restart its solar rebate program and subsidize residential solar energy projects through 2011, a spokesman for the state Office of Clean Energy told a home energy conference

A Taxing Decision for Alternative Energy

Saturday, September 6, 2008

Something other than Obama and McCain

The first time I came across these articles about ballot initiatives on cutting taxes, I must say that I was surprised. Many states are already concerned about decreasing revenues from taxes because of the slowdown in the economy and now they want to vote on giving the state even less money by getting rid of the state tax. Whoever, became up with that one must be a real Einstein.

Group unhappy with tax measure's summary

By Brian Duggan

The group sponsoring a ballot initiative to cut the state income tax in half are calling foul after Secretary of State Al Jaeger changed the measure's summary to reflect a number of errors in the petition.


Income-Tax Repeal Opponents Plan Strategy
By Tammy Daniels

Opponents say it will gut social services and local aid; proponents say it will put more money in citizens' pockets. On Nov. 4, voters will decide a ballot question that could ravage local and state budgets for years to come.






Rangel Says He Didn't Know of Loan Terms
Villa Deal Compounds Controversy

Rep. Charles B. Rangel (D-N.Y.) did not know that the Caribbean resort villa he purchased 20 years ago was financed with a no-interest mortgage from the developer and has generated $75,000 in income.


Fitch Rates Connecticut's $500MM 2nd Lien Special Tax Obligation Refunding Bonds 'AA-'

Fitch Ratings assigns an 'AA-' rating to $500 million State of Connecticut second lien special tax obligation (STO) refunding bonds, transportation infrastructure purposes, 2008 series 1.

McCain, Obama Tout Competing Plans to Save Social Security
By Edwin Chen and Kim Chipman

Presidential candidates John McCain and Barack Obama made dueling pitches to the nation's elderly, each vowing to bolster Social Security while offering very different approaches.


Grandparents Plan To Help Finance Their Grandchildren's College Education

Banks are cutting student loans and financial aid packages are dwindling as the nation's freshman class reaches an all-time high.

An Analysis of the Candidates Tax Plans

More analysis on the candidate's tax plans.

The Rhetoric and the Reality
A political convention is a license if not to lie then at least to tell the truth creatively. At their quadrennial gatherings over the last two weeks, Democrats and Republicans presented their records and their platforms — and those of their opponents — through typically partisan lenses that blurred or distorted the real picture.

Comparing the McCain and Obama tax plans
Mickey Hepner The Edmond Sun
Now that the political conventions have ended it is official, the next president will be either Barack Obama or John McCain. During the next two months we will hear a lot about these two candidates, but few issues better illustrate the differences in these two candidates than their tax plans.

More reading on the tax plans.

Exposing Five Dangerous Lies in McCain's Big Speech
AlterNet
. Posted September 6, 2008.
False McCain Claim: "My health care plan will make it easier for more Americans to find and keep good health care insurance."
Facts: McCain's Health Care Plan Does Little to Reduce the Ranks of America's Uninsured and Would Erode the Employer-Based System

Obama Claims 'Nobody Disputes' Disputed Tax Cut Claim
September 05, 2008
"Let me tell you my plan," Sen. Barack Obama, D-Illinois, told some employees of the SCHOTT glass company in Duryea, Pa., earlier today. "Ninety-five percent of Americans would get a tax cut under my proposal."

Obama Economic Advisor Goes on Offense Against McCain
A top economic advisor to Sen. Barack Obama cited stark differences between the Democratic presidential candidate’s plan for the economy and that of Republican rival Sen. John McCain on Friday, expressing confidence that voters will side with Obama on what is likely the top issue in the November elections.

The Tax-Cut Frame: Both sides pander
SEATTLE POST-INTELLIGENCER EDITORIAL BOARD
We've heard a shared refrain from Democrats and Republicans alike over the past couple of weeks: We need tax cuts. Sure, there are differences. One's for "middle-class tax cuts." The other promotes "pro-growth tax cut.

The Candidates On Taxes
They may paint themselves as agents for a new, more bipartisan attitude in Washington, but John McCain and Barack Obama both tend to adhere to their parties' usual approaches to tax policy.

Palin Boosted Oil-Company Taxes While Alaska Had Budget Surplus
By Alison Fitzgerald
Sept. 6 (Bloomberg) -- Alaska Governor Sarah Palin, who has joined the Republican national ticket as a tax-cutter, was a driving force in raising a tax on oil companies last year that will help swell the state's budget surplus.

Tuesday, September 2, 2008

More On The Candidates Tax Plans

Just in case you may have read this blog and thought "boy these articles sure are slanted towards Obama." Well here are some stories that slanted towards McCain.

John McCain Has a Tax Plan To Create Jobs
By MARTIN FELDSTEIN and JOHN B. TAYLOR
John McCain's tax policies are designed to create jobs, increase wages and allow all Americans -- especially those in the hard-pressed middle class -- to keep more of what they earn. His plan achieves these goals in three important ways.

McCain could spell tax relief for Long Island
BY CHRISTIAN BROWNE
As the Republican Party faithful continue their convention in St. Paul, it's time for deepest-blue New York to take another look at this race.

Obama speech has positives, but promotes tax shell game
Barack Obama had best become the messiah, considering this utopia he promises.
His acceptance speech last week had a shelf life of 10 hours, spent while most Americans slept. They awoke to find a news industry that had moved on to focus on the announcement of John McCain’s new running mate, the conservative and popular governor of Alaska

Monday, September 1, 2008

Tax plans of Senate Obama and Senator McCain

If you are wondering who has the better tax plan for your wallet, the Tax Policy Center has just released an Updated Analysis of the 2008 Presidential Candidates' Tax Plans. Below is an except from that report.

Both John McCain and Barack Obama have proposed tax plans that would substantially increase the national debt over the next ten years, according to a newly updated analysis by the nonpartisan Tax Policy Center. Neither candidate?s plan would significantly increase economic growth unless offset by spending cuts or tax increases that the campaigns have not specified.

You can read the complete version in pdf and make you own assessment on who has the better tax plan for you.

If you want more analysis of what both Senator Obama and Senator McCain have planned for the American citizens of our great country and how they effect your wallet, then read on.

According to a new analysis by the Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution, Democrat Barack Obama and Republican John McCain are both proposing tax plans that would result in cuts for most American families.

If you live in North Carolina, I think this piece of information may be of interest to you.

A report out this week from the N.C. Justice Center provides a sobering account of the economic well- being of typical North Carolina households.
Despite a period of economic expansion that likely ended in 2007, the average North Carolina household is no better off than in it was in 2000. Moreover, the number of people living in poverty rose from 13.1 percent in 2000 to 14.3 in 2007 and the number of people without health insurance jumped from 15.1 percent in 2004-05 to 17.2 percent in 2006-07.

If you are interested what they might be saying in the midwest? Then read this

A presidential election is just two months away. So this Labor Day weekend, rather than reflect on the state of the work force, let's instead consider how working people are likely to fare under several of the policies of the two nominees, Barack Obama and John McCain.

Here are more articles on the tax plans of both candidates.


  • John F. McCain by Peter Ferrara
The best components of John McCain's campaign are his tax and budget proposals.
Even though Obama says he'll cut taxes for 95 percent of Americans, Gallup records 53 percent thinking he'll raise them.