Sunday, April 25, 2010

Too Long Between Posts--Apologies

While is NOT true that Ronald Reagan and Princess Diana were still alive when I last posted, it has been too long and I apologize. Unfortunately, posting will remain light until May 10 or so because of end of semester responsibilities (test writing, grading, etc.) First observation--tax season is OVER for the millions of EAs, CPAs and others who have worked ungodly hours for the last two months or so. I look forward to seeing the posts of Robert Flach (Wandering Tax Pro), Monica Lavwer (Confessions of a CPA and the Tax CPA) and others as they return to blogging after their working hiatus. Major applause to Joe Kristan, Russ Fox and other working tax accountants (yes, and Peter Pappas, Kelly Erb and tax lawyers too) who were able to post in the midst of the maelstorm. Second observation--I was at the Society of Business, Industry and Economics conference and attendance was down markedly from last year. David Black, Jim Couch and the rest of the SOBIE crew do a good job of running the conference; so I think what happened was that many schools have cut back on academic travel allowances. It was sad to know that many familiar faces were not present; though I guess academic travel allowances seem pretty trivial to the millions of unemployed Americans and to state legislatures trying to avoid California-style financial crisis. Third observation--one of my students was killed in a car accident while I was away at the conference. This is the seocnd time that I started the semester with a student which would not live to see six months from that point (one in Alabama fifteen years ago or so), Lord willing, there will never come a time that such an event fails to shake me up.

Friday, April 09, 2010

CCH: Five Reasons to Get Your Tax Return out the Door

CCH, one of the dominant sources of material on U. S. tax law, provides five reasons why taxpayers should strive to complete their tax returns by April 15. The reasons include: taking the failure to file penalty out of play; avoiding the failure-to-pay penalty if you owe; speeding up receipt of any refund (in effect, an interest-free loan to Washington) that you deserve; the IRS allows charging taxes through a third party and may permit installment payments if paid off within three years and the IRS is being more liberal than usual this year with its "offer in compromise" program.

The CCH argument, as would be expected, has a lot of validity. A related note: "tax relief" programs can sound appealing if you are looking at owing a sizable amount of money--but be careful! While legitimate tax structuring businesses CAN help you organize your way out of tax debt; there definitely are outfits who will charge extremely high fees, take positions of questionable legality or both. In most cases, a tax professional such as a local Enrolled Agent or CPA will be just as useful at a lower cost.

Tuesday, April 06, 2010

Help Employees Become More Savvy and Diligent Investors--Set up 401k's

The Transamerica Center for Retirement Studies found in a survey of 3600 employees that those who participate in a 401[k] plan start saving earlier, are more actively engaged in the savings process, have a better understanding of investing fundamentals and are less dependent on Social Security compared on nonparticipants. Workers are more likely to have 401k access if they work for a large company and work full-time. Men are slightly more likely to have 401k access compared to women.

Given the present state of the economy and the potential for future inflation, workers counting on Social Security to provide the primary source of retirement income take a sizable risk. If your employer is too small to offer a 401k, you might want to look into a savings club or other "forced" savings approach--do NOT use extra tax withholding as your strategy, the investment return on an increased tax refund is 0.

Sunday, April 04, 2010

How Can I Keep from SInging?

"And an angel appeared and said 'Do not fear, for I know that you seek Jesus. He is not here; he has been raised and he is going before you to Galilee. Go and tell his followers...'"

Saturday, April 03, 2010

Jawboning Charge-offs for ObamaCare

Paul Caron, the TaxProf, has linked to a number of sources regarding criticism by Rep. Henry Waxman (R-CA) of large companies which publicly took a charge against earnings after recent healthcare legislation was passed. Waxman felt that the companies were poisoning opinion regarding the legislation and asked officers of the companies to explain their decisions before Congress.

Commentor Ron on the TaxProf post probably has a good point regarding the complexity of the new healthcare law and potential for misunderstanding from all parties. That said, the act of threatening businesses who, as best I can tell, were trying to comply with GAAP is an unseemly use of Congressional power. Claims of politics by the companies would be more convincing if the charge-offs were being announced in October.

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