Tax Guru – Ker$tetter Letter

Helping real people win the tax game.

Archive for January, 2013

Posted by taxguru on January 31, 2013

For millionaire athletes, states with highest tax rates may not make the cut

 

Why the Regime Wants Your W-2 to Tell You Exactly How Much Your Employer is Paying for Your Health Insurance – Rush discusses the growing amount of info reported on W-2s.

 

To Open Eyes, W-2s List Cost of Providing a Health Plan

 

The State Tax Reformers. More Governors look to repeal their income taxes. – From the WSJ

 

 

 

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Posted by taxguru on January 28, 2013

Total Tax-Code Termination? – The impossible task, to find a tax scheme that pleases everyone.  That’s why I have never feared a loss of work.

 

Google will not oppose clampdown on tax avoidance, chairman says – Another victim of bad PR over their legal tactics to save taxes.

 

Perry proposes amending Texas Constitution to allow state to return excess taxes –  Very unusual concept.  Almost every other politician will just find another way to spend any excess money they find.  They have no problem spending money they don’t have.

 

‘Wall St.’ flees NY for tax-free Fla. – The “Golden Goose” will only tolerate so much abuse by the State rulers before deciding enough is enough.

 

Mickelson and the Sports Star Tax Migration – From the WSJ.

 

From Argus Hamilton:

Tina Turner moved to Switzerland Friday as France’s richest man moved to Belgium to flee high taxes. Gerard Depardieu moved to Russia and Phil Mickelson is wavering. If there’s ever going to be life on Mars it’s going to be rich people escaping these governments.

Phil Mickelson caused an uproar in La Jolla when he said he may exit California due to the new high state income tax. It may have ruined the tournament. All weekend, golfers were missing short putts and high-fiving each other for staying out of a higher tax bracket.

John Kerry promised to divest his stock holdings that might pose a conflict of interest if he’s confirmed. He and his wife own a lot of defense industry stocks. He could be the first Secretary of State to double his net worth by intentionally screwing up peace talks.

Japan rebuked an official who said it’d save Japan a lot of money if old people would hurry up and die. Their senior citizens survived atomic bombings. People that resistant are going to be collecting government pensions until they’re a hundred and fifty years old.

 

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Posted by taxguru on January 26, 2013

From Argus Hamilton:

The Los Angeles Dodgers signed a record TV deal with Time Warner Cable this week worth eight billion dollars. The payroll is through the roof. The players are making so much money they are asking to be traded to Florida or Texas where the taxes are lower.

 

Social Security’s disability trust fund could fail to cover all benefits early as 2016 – And we should trust the same bozos in DC to be in charge of every aspect of our lives.

 

Phony drama over phony deal to resolve phony crisis – From Jack Kelly

 

The Sports Media Jihad Against Mickelson – Rush has more on the persecution of a pro athlete for the sin of complaining about his high taxes.

 

The truth behind Mickelson’s taxes – This CNN reporter actually knows more about Mickelson’s actual tax burden than he knows himself.  Isn’t CNN wonderful?

 

France’s richest man moves to Belgium and takes multi-billion pound fortune with him ‘to avoid new socialist super-tax’ – Are our retarded rulers in DC able to learn from the mistakes other countries make?  Why would they start now?

 

 

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Who has to file 1098s?

Posted by taxguru on January 26, 2013


From a client:

One question.
We have a Personal Loan to an individual …..and
a first Home mortgage to my daughter.  Both loans are being amortized.  You will see our Quick Books and Organizer records “Interest Income”.
Do I issue 1098s?  FYI, I did not issue 1098s in 2011.

 

My Reply:

Since you aren’t in the lending business and these loans weren’t for properties you developed, you are not required to file 1098s.

However, I have some clients who voluntarily file 1098s even though they also aren’t required to do so in order to make sure everyone is using the same numbers on their tax returns.

If you don’t file 1098s for your loans, you should send your borrowers something showing what your records have for the prior year’s payments in terms of principal and interest so that they can use the same figures for their tax returns.

FYI – Here are the IRS’s official instructions for this.
http://www.irs.gov/instructions/i1098/ar02.html#d0e169

Who Must File

File this form if you are engaged in a trade or business and, in the course of such trade or business, you receive from an individual $600 or more of mortgage interest on any one mortgage during the calendar year. You are not required to file this form if the interest is not received in the course of your trade or business. For example, you hold the mortgage on your former personal residence. The buyer makes mortgage payments to you. You are not required to file Form 1098.

For information about who must file to report points, see Who must report points on page 3.
Not in the lending business.   If you receive mortgage interest of $600 or more in the course of your trade or business, you are subject to the requirement to file Form 1098, even if you are not in the business of lending money. For example, if you are a real estate developer and you provide financing to an individual to buy a home in your subdivision, and that home is security for the financing, you are subject to this reporting requirement. However, if you are a physician not engaged in any other business and you lend money to an individual to buy your home, you are not subject to this reporting requirement because you did not receive the interest in the course of your trade or business as a physician.

I hope this helps.  Let me know if you have any other questions.

Kerry

 

 

 

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New Comix Blog

Posted by taxguru on January 26, 2013

As you may have noticed, I have been experimenting with different ways to post comics without them overly dominating this main page.  I haven’t been able to accomplish that within the limitations of this blog, so I set up a new separate blog just for the comics that Sherry and I have been finding.  The url of this new blog is:

TaxGuruComix.com

 and there are links to it on the right side of this page.

I am currently uploading my backlog of comics.  None of these are repeats of the ones posted previously here.  I hope this works out to be more convenient and efficient for everyone. 

 

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Posted by taxguru on January 24, 2013

 

Mickelson and Woods Can Reclaim Their Patriotism by Backing Gay Marriage – Rush Limbaugh explains why Phil Mickelson had to retract his public complaints about high tax rates.  To be a good loyal citizen, everyone is expected to bend over and take as much fiscal raping as our rulers feel is good for them.  To complain is now considered an unpatriotic act.

 

 

The Progressive Income Tax and the Ruling Class – Rush explains how the Marxist high tax rates on successful people is used to prevent accumulation of privately held wealth.

 

 

 

Democrats: We’re Not Done Raising Taxes – It’s in their DNA to always increase taxes and to lie about it.

 

 

Jindal’s Bold Tax Reform – He’s still trying to drop income taxes from Louisiana.

 

From Argus Hamilton:

Phil Mickelson said Monday he may relocate his family to escape the higher federal taxes on the rich. It’s bad. The PGA stars have asked tournaments to stop putting their real names on the leader board because they don’t want to give the IRS their coordinates.

 

 

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Slow down with 1099s and W-2s

Posted by taxguru on January 24, 2013

It’s time for another reminder to not be so quick sending IRS its copies of 1099s and W-2s.  I just sent this message to client after he sent me copies 1099s that he had already mailed to IRS.

Thanks for sending me the copies of the 1099s you submitted to IRS.  I have printed them out and put them in the corp’s tax file folder.

In the future, it would be a good idea to wait until some time in February to send IRS its copies.  The recipients are supposed to be given their copies by January 31; but IRS doesn’t need its copies until Feb 28.  The reason for the extra month is to give everyone a chance to spot any errors prior to sending the IRS copies in.

If you do later send in a Corrected 1099 to correct an already filed erroneous form, IRS will often miss the “Corrected” box entry and will show both of the forms as valid ones in their computer and expect to see the total of both of the amounts on the payee’s tax return, creating a mess to straighten out.

Let me know if you have any questions.

Kerry

 

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Posted by taxguru on January 23, 2013

California residents, businesses consider bailing on Golden State over taxes –  It’s not just the high taxes that motivated us to leave the PRC 20 years ago. It’s also the never ending micromanagement of every part of everyone’s life by the rulers in Sacramento that was unbearable for us. 

 

Court Holds IRS Can Get Key Tax Records Even Held by Your Lawyer – As I’ve long pointed out, the basic protections we have under the Constitution are null and void when it comes to tax matters.  This is just one of dozens of examples of this.

 

 

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Posted by taxguru on January 22, 2013

Mickelson backtracks on further comment on taxes after speaking out over high rate –  He was obviously attacked by the Thought Police, who let him know that it is not politically correct to want to keep more of one’s own hard earned money than our all wise and knowing rulers think we should be allowed to retain.

 

Tiger Woods admits he left California because of high tax rates after rival Phil Mickelson apologizes for saying he may quit West Coast - At least he’s honest about this.

 

Sarkozy’s plans ‘to dodge new 75% French tax rate by moving to London with wife Carla and setting up £1bn private equity fund’ –  You know things have gotten out of control tax-wise when a country’s former president becomes a tax refugee from his own nation. 

 

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Posted by taxguru on January 21, 2013

 

Teed off: Golf star Phil Mickelson may bolt California over taxes – He’s late to the game.  Most professional golfers, as well as many other pro athletes, live in Florida for the freedom from State income taxes.  Of course, they still often have to pay some income taxes to taxable States in which they earn money; but it works out to be much less than if they had a taxable state as their Tax Home.

 

Golfer Phil Mickelson Is Not Alone In Fleeing Taxes –  From Forbes

 

Republican governors’ plans for no state income tax lauded, criticized –  They sound good to anyone who believes in encouraging economic growth.

 

Experts: Smaller checks may lead to spending in-Security – Not exactly earth shattering news here.  It doesn’t exactly take an “expert” to figure this one out. Less money in consumers’ hands results in less spending by them.  What could be more obvious than that?

 

Mark Steyn And The Odd News Reported From America – Very funny look at the  insane ways in which our rulers deal with the ever-expanding national debt, including the ridiculous notion of minting a Trillion Dollar coin.  

 

USA Inc.’s balance sheet: Assets $2.7 trillion, Liabilities $18.8 trillion – In the real world, this would indicate bankruptcy; but since DC is in a parallel universe where conventional calculations don’t exist, it’s no big deal.

 

California man empties grandkids’ piggy banks to pay his $14,000 property tax bill in CHANGE – Feeling the pain of the tax.

 

Obama’s Social Security Games Make Case For Private Pensions – Of course, the vultures in power in DC can’t help drooling over the idea of seizing the money in private pensions.

 

Sin Tax Wars! 60.9% of all smokes in NY go untaxed – Anyone with half a brain (ruling out the rulers in Albany) could have predicted that high taxes would create a booming market in cigarette smuggling across state lines

 

Liberal tax leaves bitter taste in some smoothie drinkers’ mouths – Making libs pay more for things sounds like a fair move.

 

 

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