Tax Cuts Could Yield $1,100 A Family

Moving From Quicken To QuickBooks

In our push to get all of our clients using QuickBooks for all of their business and personal bookkeeping, we have had some resistance from people who are already using Quicken for their personal books. The only really good reason to stick with Quicken is if you are using its ability to check market values of your stock portfolio, a feature that QuickBooks doesn’t have. If the benefits of that feature offset the more cumbersome file backup and sharing capabilities inherent in Quicken, and the clients are comfortable with the zipping needed to send me their data files, I’ve agreed to let them stay on Quicken.

An argument that I’ve received from a couple of different clients is that switching from Quicken to QuickBooks will cost them more money. While the QuickBooks program does have a slightly higher purchase price than Quicken, all of these clients who expressed that complaint were already using QuickBooks for their corporations’ bookkeeping. My guess is that they were under the impression that they had to buy a new copy of QuickBooks for each company they were setting up books for. That is not true. With the same copy of QuickBooks (or Quicken), you can set up an unlimited number of different companies. I use my single copy of QuickBooks to work on literally hundreds of different company files. Normally, it’s just a matter of setting up a company file for the 1040 info (Smith1040) and another one for the corporation’s (Smith1120). Switching back and forth between them is very easy. I always add an “Open Company” button to the icon bar to make it a one click process.

Another possible reason for the worry over cost might be the perceived need to spend a lot of time reentering info into the new QuickBooks file that had already been input into Quicken. Again, this is an erroneous concern. QuickBooks is able to import every bit of information from a Quicken data file, with nothing lost in the transition. I have done it hundreds of times. The only limitation is that the version of QuickBooks you are using must be at least as new as the version of Quicken you had been using. For example, you can import Quicken 2002 data into QuickBooks 2002; but you can’t import Quicken 2003 data into QuickBooks 2002. You would have to use QuickBooks 2003.

KMK

Tax cuts for growth

Good advice for Bush 43.

Lessons In Incompetence

I don’t intend to focus too much on the tax problems in the PRC; but since the rulers in Sacramento have dug themselves the biggest financial hole in the country, they are very illustrative for everyone. In fact, they have shown an almost perfect textbook example of how not to set up a state’s finances. As these articles by Margaret Talev & Dale Kasler and Daniel Weintraub describe quite well, the PRC’s tax revenues have been far too dependent on the fortunes of the wealthy people who haven’t yet left the state.

As I have seen on several real life tax returns, this reliance on capital gains taxes has hurt Federal tax revenues as well. People showing huge gains on their 1999 tax returns have had huge losses on their 2000 and 2001 returns.

Of course, it would have been much worse for our rulers if the taxpayers hadn’t been nailed by one of the most unfair double standards in the tax code. Capital gains are fully taxable with no maximum; yet capital losses are only deductible at a maximum of $3,000 per year per person or per couple. For some clients, who have carryover losses well over a million dollars from the stock market plunge of 2000 & 2001, I have my doubts whether they will live long enough to actually deduct all of their losses. Any unused losses expire when they do.

It’s not likely that Governor Gray-out Doofus will solve the money problem with such brilliant ideas as taxing Internet sales or having volunteer organizations take on the work of the public employees. Of course, he really doesn’t care if things are corrected because he has already been reelected to his second and final term in office.

KMK

Killing the Tax On Dividends

Joel Mowbray is quite a bit more optimistic than I am regarding the prospect of an elimination of the double taxation on corporate profits. While he has a good point that totally eliminating the tax would be a statement of principle and just cutting 50% of the tax would be a cheap compromise, the latter is what almost always prevails in DC. There are too few in power who will stand up for the principles of capitalism and fairness. Sad to say, that goes for our MBA President as well, who is almost as wimpy as his father was in standing up to criticism from the high tax loving liberals.

KMK

Another Tax Protestor Down

According to this article on the IRS’s bust of an illegal tax protestor promoter, there are 740,000 people in this country who are using bogus trusts and other illegal techniques to shirk their tax responsibility.

One way to look at this situation is that IRS is definitely going to have its hands full going after these flagrant violators. It’s like when you’re driving 60 in a 55 mph zone and there are four or five other cars doing 95 and swerving all over the road. Which cars do you think the cops will go after first?

KMK

Disservice Tax

As I constantly have to remind people, the issue usually isn’t what the tax rate is; but what is subject to tax. That’s why a flat income tax rate wouldn’t really simplify things much. There would still be a lot of machinations in arriving at the taxable income figure.

In this same vein is the issue of sales taxes. Historically, most states only assess sales taxes on the sales and leases of tangible items and don’t include payments for most services, such as legal and accounting fees. However, when a state becomes desperate for money, as is the case in the PRC, historical tradition can easily be tossed overboard. Since most politicians are very short sighted, they will be oblivious to the long term consequences of this quick fix.

KMK

President to Seek Dividend Tax Cut

This will only happen if Bush can resist the temptation to cave into the class envy rhetoric from the lefties who claim that this would be a break for only evil rich people.

Scandal Waiting To Happen

IRS is promoting its readiness for the upcoming filing season and advertising some improvements to its legendary customer service. A new upcoming feature of their website is the ability to log in and check the status of a refund. It’s not functional yet, as can be seen on the page where it’s supposed to be. While I have always been a big fan of self service functions on the web, such as tracking UPS and FedEx packages, I’m predicting that this won’t be around very long before its lack of privacy controls leads to abuses, such as thefts from mailboxes. All you will need to enter on the IRS website is the name, Social Security number and amount to gain access to what should be confidential information.

As I’ve commented on many times before, the genie has long been out of the bottle in regard to the privacy of Social Security numbers. They are used on so many documents, that it isn’t hard at all for people to have access to that and use it to check on upcoming refund checks. The only solution to this will probably be for IRS to assign taxpayers with a another new ID number that can be kept secret. Social Security numbers are anything but secret. Other security options may be scans of fingerprints or eyeballs, as in the movie Minority Report, in order to verify one’s identity.

KMK