Friday, January 29, 2010

Major Tax Deadlines - Febuary 2010

February 1


Employers must provide 2009 W-2 statements to employees.
February 1

Payers must provide 2009 Form 1099s to payees. (Brokers have until February 16 to provide Form 1099-B and consolidated statements to customers.)
February 1

Employers must generally file Form 941 for the fourth quarter of 2009 and pay any tax due.
February 1

Employers must generally file 2009 federal unemployment tax returns and pay any tax due.
February 16

Deadline for providing Forms 1099-B and 1099-S to recipients.

RIP - JD Salinger

There has been much discussion on the legacy of writer JD Salinger these last few days and his most famous creation “Catcher in the Rye” published in 1951. It struck me that to fully appreciate the revolution that was “Catcher in the Rye” it is instructive to think about what it would have been like to encounter that novel back in the early 1950’s. While it is still an amazing read putting yourself (or at least attempting to) back to 1951 and imaging what it would have been like to read this book then, starts to give the reader a fuller appreciation of how culturally ground breaking it was.


It brings me to mind of an French interviewer who said to Miles Davis that he did not understand what the “big deal” was with he and Gil Evan’s revolutionary “Birth of the Cool” sessions recorded in the late 1940’s, Miles response (typically succinct): “man, you should have heard them back in 1947!”

I think with much great art it is important to try and see it in the context of when it entered the world. If it is great art there will always be a timeless quality, and it will easily transcend its origins, but its time and place within its own culture is always enlightening and will bring a fuller appreciation of the work.

Sunday, January 24, 2010

Key 2009 Provisions of the American Recovery & Reinvestment Act

Tax credit for workers: for 2009 and 2010 there is a “making work pay” tax credit of up to $400 for working individuals and up to $800 for couples filing joint returns. The credit was advanced to most taxpayers through reduced withholding throughout the year.
Temporary suspension of taxation on unemployment benefits: the jobless get a little more help with a $25 increase in weekly benefit checks through 2009 and suspension of federal tax on the first $2,400 of unemployment benefits received in 2009
Retirees and disabled individuals: those receiving government benefits, including Social Security, Railroad Retirement, SSI, and VA benefits received a one-time payment of $250 in 2009
First-time home buyer credit: increased to $8,000 for qualified first-time homebuyers purchasing homes after Dec. 31, 2008 and before May 1, 2010; repayment requirement waived unless sold or no longer principal residence within 36 months. Also, if you enter into a binding contract to buy the home by that date you still qualify if the closing is before July 1, 2010.

A reduced credit up to $6,500 is also now available for long-time homeowners. These are homeowners who have lived in their homes at least 5 consecutive years out of the 8 years before buying and moving into a new principal residence. This new credit is for homes purchased after Nov. 6, 2009.
“American Opportunity Tax Credit” for education: an ‘enhanced’ Hope credit applies to the first four years of college; it provides 100% credit for the first $2,000 and 25% for the next $2,000 on qualified expenses such as tuition and books; the credit is 40% refundable, meaning even taxpayers who have no tax liability can receive a credit for 40% of qualified college expenses, up to $1,000
529 plans: qualified computer technology and equipment is now allowed as higher education expenses from the plan, so distributions from 529 plans to buy a computer, for example, for college will not be taxable
Earned Income Tax Credit: increased EITC amounts for families with 3 or more children and additional marriage penalty relief
Additional Child Tax Credit: earnings threshold is lowered to $3,000, helping more people qualify for the credit and receive more money; for 2008 the earnings threshold was $8,500
Vehicle purchase: state and local sales taxes paid for purchases of qualified new motor vehicles are deductible either as part of the standard deduction or as an itemized deduction; the per vehicle deduction is limited to the tax that would be paid on a vehicle that cost $49,500.
AMT: the one year typical patch for 2009 of the Alternative Minimum Tax (AMT) to prevent as many as 24 million middle-income households from being hit with a tax that was originally designed to prevent the very wealthy from avoiding taxes.

Independent Voters

I think the famed independent voters of Massachusetts (and indeed all states) need to find independent, 3rd party candidates to vote for. At this point independent voters are simply involved in a stupid ping pong game back and forth between corporate Republicans and corporate Democrats. NOBODY is going to win in this game, lets use this movement (if that is what this is) to break the back of the 2 party system in this country and create a viable, independent 3rd party that is NOT controlled by corporate interests or the party infrastructure.
Even though a flood of money entered the Massachusetts campaign at the very end of the election it seems fairly clear that Mr. Brown had probably won by then. This means that Brown was able to win this election without all the baggage, and this strikes me as very hopeful as long as we move on from here in some meaningful way. As long as independent voters continue to use their anger to simply dump incumbents and not formulate a meaningful path to take our country out of the hands on big money then there is little hope for America.

Friday, January 22, 2010

The Latest from the MA DOR on 2009 tax filing season

As the 2009 Income Tax Filing Season starts the Department would like to update you on some of the many changes at the Department of Revenue impacting this year’s Filing Season.

The Department of Revenue has expanded its free Web File for Income (“WFI”) Program. This free web-based program for filing Individual Income Tax Returns is available for use by all full-year residents who do not have to report installment sales income. Since January 19, 2010 WFI has been available online 24/7. Practitioners can use this free web-based program on behalf of their clients.

In addition:
The Senior Circuit Breaker credit has been increased to a maximum refundable credit of $960.00. (See TIR 09-16)

The Health Care mandate now requires that taxpayers have health insurance benefits that meet Minimum Creditable Coverage (MCC) requirements. For more information, see the special section on Minimum Creditable Coverage in the Schedule HC instructions. And for more information on penalties for 2009 see TIR 09-01.

Military Spouses Residency Relief Act, P.L. 111-97 was signed by the President on November 11, 2009. This Act limits the ability of states to tax a service member’s spouse. Additional information on how taxpayers affected by this Act need to file their taxes will be forthcoming.

The Department has issued TIR 09-15 outlining the Massachusetts tax treatment of losses from criminally fraudulent Ponzi-type schemes differs from that of the Internal Revenue Service.

The Filing Season Video is up on the DOR home page. This video discusses changes for the filing season impacting individual income and corporate excise taxpayers.

Thursday, January 21, 2010

Supreme Court rejects limits on corporate spending in electoral campaigns

A very sad day in American, this (seemingly non-sensical) ruling opens the door for unlimited, direct corporate influence for American elections (as if they did not already have enough control over American civic life)!

A divided Supreme Court on Thursday swept away decades of legislative efforts to restrict the role of corporations in election campaigns, ruling that severe restrictions on corporate spending are inconsistent with the First Amendment's protection of political speech.
The court split 5 to 4 over the ruling, with its conservative members in the majority.
"When government seeks to use its full power, including the criminal law, to command where a person may get his or her information or what distrusted source he or she may not hear, it uses censorship to control thought," the court said in a decision written by Justice Anthony M. Kennedy. "This is unlawful. The First Amendment confirms the freedom to think for ourselves."

Wednesday, January 20, 2010

Mitt "Obi-Wan" Romney

Scott Brown the new senator from Massachusetts said last night in his acceptance speech something that I thought was very important:
"In every corner of our state, I met with people, looked them in the eye, shook their hand, and asked them for their vote. I didn't worry about their party affiliation, and they didn't worry about mine. It was simply shared conviction that brought us all together."
He alluded to the fact that he was elected by "independents" several times in his speech and that his fight was against "the machine." With all the mewing you are going to read about what this election means to Democrats and Republicans it may just be that what this election means is that you are becoming irrelevant.
The people of Massachusetts elected a guy named Scott Brown who embodied what they were feeling and that voters felt would go to Washington and do what they wanted him to do, and these supporters really did not give a shit what his "party affiliation" was - WOW, what a concept!
The election clearly has all sorts of interesting sociological elements with its anti-Obama undertow but I think the overarching concern of Brown voters was a deadly fear of bloated Government and out of control spending (all fueled by borrowing from foreign countries) - all the other issues are simply window dressing.
Beyond all this, Coakley was clearly a rotten candidate who did not get down to work until the very end and (as Mr. Brown eluded to) I suspect she was indeed relying on "the machine" to get her elected, but I think those days may be gone. (FYI to the Democratic Party in Massachusetts - we don't need to hear and "Kennedy - Lion of the Senate" bullshit anymore)
The question now becomes does Scott join the ranks of Republicans in Washington and fall in lock step in the great Rovian Army or does he see his mandate to stay independent, We shall see!
SO if I were creative, my you tube video this morning would be a parody of the Mos Eisley Cantina scene in Star Wars where Mitt "Obi-Wan" Romney and Scott "Skywalker" Brown would be standing outside the Capitol building and Mitt would warn Scott of the "retched hive of scum and villainy" that lay within and tell him to "watch his step."

Monday, January 18, 2010

RIP - Willie Mitchell and Teddy Pendergrass

There are 2 “twin tower” record labels of Memphis Soul and R&B – STAX & Hi Records. Willie Mitchell was central to the great success of Hi Records as band leader (a fine trumpet player in his own right), producer, composer, arranger, talent scout and engineer for so many classic records. The artist most often mentioned in conjunction with Mitchell is the Al Green, but there is also Ann Peebles, Otis Clay, O.V. Wright and Syl Johnson. His other critical achievement was the organization of what is called the great Hi Rhythm section of the Hodges brothers; Teenie on guitar, Charles on organ and Leroy on bass and Howard Grimes on drums. The influence of this amazing musical unit, so soulful and powerful, permeated the essential sound of so many of these timeless records. I had the profound pleasure of sitting on stage behind Teenie, his brothers and Howard as they backed Otis Clay at the Ponderosa Stomp in New Orleans this past year (2009), a vivid memory that will be with me forever.
Teddy Pendergrass was the big man with the BIG voice in the Philly Soul standard bearers group Harold Melvin and the Blue Notes. Pendergrass emerged as the greatest interpreter of the '70s "Philly Soul" sound created by the writing-production team of Kenneth Gamble and Leon Huff with such classics as “Don’t Leave me this Way,” “Bad Luck,” “I Miss You” and “If You Don’t Know Me by Now.” He was suave and handsome (nick named “Teddy Bear” by his lady fans) with a powerful, sexy and silky voice that was one of the great sounds of 70’s soul. His career essentially ended following a spinal cord injury in an auto accident in 1982. Subsequent to his accident he devoted himself to a variety of philanthropic activities that you can read about on www.teddypendergrass.com.

God Bless both of these great giants of American Music

Saturday, January 16, 2010

TEA parties and NASCAR jackets

I recently heard a radio show with some TEA party morons, one of whom said, in response to the (undeniable) racist element of their movement, that they were not worried about Obama’s “blackness but his redness.” This speaks to the direct heart of these folks fear of big government. When Americans are polled on which they fear the most, big Government or big business the answer is always big Government. This oddly misses what to me is the real issue. Communism is defined as the workers control of the means of production. This is generally going to mean that government (representing the workers) is going to be in control, and that is what this speaker alluded to. Sadly in this country what is really happening is that corporate interests are controlling government not the reverse (the exact opposite of communism/socialism). The TEA party folks are completely missing the point of the real dynamic of what is happening in our country. Using lobbing money and donations major corporate interests are controlling congress and the white house (so much for change!) to protect their interests at a deadly cost to our country. Keep firmly in mind when you vote for either of major parties you have a simple choice: corporate Democrat or corporate Republican – corporate interest are ALWAYS going to be protected first and foremost! THIS is the actual source of the “public anger” that is so palpable in our current political discourse – people have this overwhelming (and accurate) sense that there is no concern in Washington for what the Greeks called the “Greater Good.” This is not because politicians are “out of touch,” quite the opposite, I think they are firmly “in touch” with what matters to them; doing the bidding of their corporate handlers!

Are TEA party followers stupid for worrying about the size of government, absolutely not, I just urge them to keep their eye on the ball and not lose sight of the role of big business in the growth of big government!

Now you may wonder where the NASCAR reference comes in! Robin Williams in his recent HBO comedy special opined that members of congress should be required to wear jackets much like NASCAR drivers wear that are covered with the names of their sponsors.

Wednesday, January 13, 2010

What to expect on your 2009 return

So what's new? If the question is about your 2009 federal income tax return, the IRS has been ready with the answer since June, when a draft copy of this year's Form 1040 was released.
Here are six items you can expect to see.

  1. A reminder that the first $2,400 of unemployment benefits received in 2009 are tax-free.
  2. An adjustment to income for the educator deduction. Up to $250 of qualified out-of-pocket costs for classroom supplies can be deducted, even when you don't itemize.
  3. An increase of the $3,650 exemption for you and your dependents if you provided housing for victims of the 2008 Midwestern disasters. You can claim an additional $500 for each person you helped (up to a $2,000 maximum).
  4. A new deduction for real estate taxes you paid in 2009. You can add up to $1,000 ($500 for singles) to the standard deduction of $11,400 for joint returns ($5,700 for singles).
  5. You can also increase your standard deduction by adding state and local sales and excise taxes on new cars bought between February 17 and December 31, 2009. The deduction is limited to taxes paid on the first $49,500 of the purchase price. Income limits apply.
  6. A potential refund of a portion of the American opportunity education credit. When the amount of your credit exceeds your 2009 tax, you can get a refund of up to $1,000 per eligible student.