Tax Guru – Ker$tetter Letter

Helping real people win the tax game.

Archive for May, 2003

Posted by taxguru on May 31, 2003

It has always been a hot issue, distinguishing where the boundaries are between functions we CPAs can legally do and when we cross over into the forbidden territory of practicing law.



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Posted by taxguru on May 31, 2003


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Posted by taxguru on May 30, 2003


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Posted by taxguru on May 30, 2003

George W’s tax cut victory (George Will)



Bush’s tax cut bridge (Larry Kudlow)



Bias against tax cuts (Bruce Bartlett)



President Signs Major Tax Cuts… Now What? (Gail Buckner)



A tax tally: the winners and losers



Some Candidates Quick to Urge Tax-Cut Repeal – The DemonRats are just so predictable that it’s getting a little boring listening to them whine about lower tax rates.  Lower tax rates = less power that they can exert over our lives.



Late Deals Got Tax Cut Done



Sunset Spending, Not the Tax Cuts, If lawmakers are really serious about eliminating the deficit.



Democrats Criticize Latest Tax Bill – They are scared to death that it will do the trick and boost the economy, crushing Queen Hillary’s chances for a third term in the White House.



Corporate Tax Appeals Up in Sour EconomyIf the value of commercial property has declined, it’s only faith that the property taxes on them be reduced accordingly.



Bill in PRC stiffens penalties for some tax shelters.  Investors in schemes would pay more fines



The Death Tax Lives On In Several States – It is more expensive to pass away in those states that are not following the Federal phase-out and one-year (2010) elimination of the Estate Tax.  While not the easiest thing to do, choosing what in which to reside during your last days on Earth could be part of an overall estate plan.

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Posted by taxguru on May 30, 2003

Same As Cash



I have been receiving some questions as to whether the Section 179 expensing election requires that you pay for the asset, such as a vehicle weighing more than 6,000 pounds, in full or if you can finance it.  This brings up one of the biggest mistakes I see people make, causing them to overpay their taxes, both because of ignorance and lousy bookkeeping.     



For income tax purposes, how you finance a purchase is irrelevant for purposes of deductibility, including the Section 179 election, which is now up to $100,000 per year.  It is exactly the same whether you pay cash or put zero money down and take out a loan for 100% of the price. 



Likewise, using a credit card is considered to be the same as paying cash for income tax purposes, regardless of when the card is paid off. You can literally go to a store, such as Best Buy (where we bought our three most recent computers) on December 31, use your credit card to buy $50,000 of computers and other business equipment, and you can claim a Section 179 deduction for the full $50,000 on this year’s income tax return, as long as you plug them in and start using them before midnight.  An often overlooked requirement of the Section 179 deduction is that the asset be placed in service during the tax year for which the deduction is being claimed; not just paid for.  The credit card bill won’t be received until next year; but that doesn’t matter for tax deductions.    

A lease of a vehicle or other business equipment does not qualify for the Section 179 unless it is a disguised purchase, such as a lease to own with a one dollar buy-out at the end. 

If you have a loan for the purchase, you can then also deduct the interest as a business expense on the same schedule where you claimed the Sec. 179.  Likewise, finance charges on deductible credit card purchases can also be deducted.  This is another often overlooked deduction by people, and even tax pros, who believe that vehicle and credit card interest are always nondeductible personal interest. 



As I have said too many times, most people miss out on claiming their full possible deductions because of crappy bookkeeping (to use the technical term).  They only look at just their checks paid out for the previous year and miss out on the purchases made through loans and credit cards.  That is why it is so important to have everything properly set up on QuickBooks.  It does a beautiful job of combining purchases made through all of those means into the proper years. 

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Posted by taxguru on May 30, 2003

How many people actually believe that Warren Buffett and his fellow travelers who condemned the tax cuts will send their tax savings back to the IRS? Fat chance of that.





 



It has always made me sick that allowing people to keep any of their own hard earned money is considered to be a cost to the government.  The argument from the Left is that’s a cost that we can never afford as a civilized society; yet we can always afford to spend trillions more on ridiculous and corrupt welfare programs. 



 



 

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Posted by taxguru on May 29, 2003

The Tax Revolt Turns 25 – Remembering the property tax revolt in the PRC in 1978. 



President Signs Tax Cut Package Into Law



Economic Impact Analysis of the Jobs and Tax Relief Reconciliation Act of 2003



W’s ‘little bitty’ tax cut



BUSH MAKES THE CUT



Tax Law Omits Child Credit in Low-Income Brackets



Bush Signs $350 Billion Tax Cut Measure



$350-Billion Tax Cut Spells Relief, Bush Says



Bush signs his 2nd big tax cut



Bush signs $350b tax cut package



Tax cutters now take aim on �sunsets�



Bush Signs Tax Cut Bill, Dismissing All Criticism



DUBYA’S TAX-CUT CATCH-22 FOR DEMS



 

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Posted by taxguru on May 29, 2003

Tax Cut Great News for Retirement Security – Contrary to the left’s propaganda that only evil rich people have income from stock dividends, as I have seen with hundreds of real life clients, most dividends are received by older middle income folks.  How the DemonRats can ever claim to be the saviors of senior citizens, especially after the 1993 Clinton-Gore hike in the tax rate on Social Security benefits, is a credit to the left-wing bias in the mass media and their ability to shape public perception.  Their opposition to lower taxes on dividend income is just one more way in which they are anything but helpful to the older citizens in this country.

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Posted by taxguru on May 29, 2003

The Deficit Game – The libs and their fellow travelers love to fake concern over perceived budget deficits and their imaginary connection with tax rate cuts.  They refuse to acknowledge the fact that deficits are strictly caused by too much spending and never have any problem fighting for more of that.  They never mention any concern over deficits when pushing for another expensive big government program.



 

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Posted by taxguru on May 29, 2003

As with the Iraq war, the underlying motivation for the opposition from the JackAss Party is pure hatred of George W. Bush. Whatever he wants, they have a knee-jerk reflex opposition to it.



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