Tax Guru – Ker$tetter Letter

Helping real people win the tax game.

Archive for October, 2003

Backwards Thinking

Posted by taxguru on October 20, 2003

Government makes up for lost revenue by borrowing – Typical leftist lies from the New York Slimes’ official Marxist economist on how the deficits are caused by the tax cuts and not by reckless out of control spending. If his idiotic advice to roll back the Bush tax cuts were to be implemented, it would compound the deficit problem by really reducing revenues.

A fact of life that the lefties refuse to acknowledge is that lower tax rates increase incentives for people to earn taxable income, resulting in higher dollars being sent to our rulers in DC. Higher tax rates create very real disincentives to show taxable income, resulting in fewer dollars for DC. A lie doesn’t become true just by continuing to say it. The Left’s persistence in trying to link tax rate cuts with budget deficits just shows how incapable they are of telling the truth about anything.

Posted in Uncategorized | Comments Off on Backwards Thinking

Section 179 Confusion

Posted by taxguru on October 20, 2003




The Section 179 expensing election really isn’t that complicated; but it still confuses people, especially those who want to save a few bucks and try to navigate the perilous waters of the tax system on their own, as in this recent email exchange.

Question Received:


Last year I purchased a truck and tractor for my business. I used Section 179 deduction on the truck ($35k) assuming I would use the deduction on the tractor this coming year. But I am reading that these deductions only apply to purchases on that year. Can I still use section 179 on the tractor that I purchased last year?

My Reply:


The Section 179 expensing election has always been available only for assets purchased and placed into service during the tax year in question. It has never been available for assets acquired in a previous year.

What many people do is stagger their asset purchases by year, so as to be able to expense each asset. For example, if you had purchased the tractor in one year and the truck in the next year, you could claim the Sec. 179 for each.

Another common strategy is to buy one of the assets in your personal name so you can Sec. 179 it on your 1040; and buy the other one through a C corp, so it can expense it on its 1120. That’s how I often advise clients who want to buy more than the year’s Sec. 179 maximum in one year.

Not to sound too self-serving, but this is a very basic concept that wouldn’t have been a surprise if you had consulted with a tax pro before you bought those things. The money you would have spent for knowledgeable advice would have been more than offset by tax savings from structuring things appropriately.

Good luck.

Kerry Kerstetter

Posted in 179 | Comments Off on Section 179 Confusion

Posted by taxguru on October 19, 2003

A tax revolt hits Buckeye State Republicans – This is a free non-subscriber link to the Wall Street Journal article I linked to earlier.

The Tax-Cut Expansion – This is why the DemonRats were so forcefully opposed to the cuts. Their only hope of success in the November 2004 elections is to continue their sabotaging of the economy. They love and do everything they can to perpetuate misery wherever possible.

Social Security to Increase Benefits – Recipients will be getting 2.1 percent more next year. As a continuation of the Ponzi M.O., the official eligibility age for starting to draw benefits will increase by two months, to 65 + 4 months of age.

Let 50 Recalls Bloom – Let’s see how the PRC’s plays out in terms of actual results before jumping to the conclusion that using recalls is more effective than just running good candidates during the normally scheduled elections.

Posted in Uncategorized | Comments Off on

News From The Left Coast

Posted by taxguru on October 19, 2003


Budget auditor may target social services – This is a good sign; that the new regime in Sacramento is planning to address the spending side of the equation rather than doing what DemonRats instinctively do, and just raise taxes.

Why Arnold is unlikely to raise taxes and spending

Even Democrats are seeing the light about repealing the tripling of the car tax.

Get ready for higher fines, fees in state in ’04

Gov.-Elect May Seek a Cap on Spending

Huffington mired in campaign debt – Not that she’s asked for any advice from me; but if I were her tax consultant, I would recommend deducting all of her out of pocket campaign costs as promotional expenses since her only purpose was to generate future income from writing and speaking.

Posted in Uncategorized | Comments Off on News From The Left Coast

Posted by taxguru on October 18, 2003

Deficits and tax cuts

Conan the Budget Cutter

Posted in Uncategorized | Comments Off on

The DemonRats are typically out of touch with reality.

Posted by taxguru on October 18, 2003

Posted in Uncategorized | Comments Off on The DemonRats are typically out of touch with reality.

Posted by taxguru on October 18, 2003

Take Advantage of These Health-Related Tax Breaks

Posted in Uncategorized | Comments Off on

Posted by taxguru on October 18, 2003

Posted in Uncategorized | Comments Off on

Killing two birds with one stone

Posted by taxguru on October 18, 2003

Posted in Uncategorized | Comments Off on Killing two birds with one stone

Posted by taxguru on October 17, 2003

Stumbling on Tax Reform. Why Don’t Democrat Leaders See the Obvious Need for Reform of the Tax Code? – We need to be careful of the language. The DemonRats do want to re-form the tax system, so as to soak the evil rich even more than they already do. Reform doesn’t mean improve or make fairer. It just means change the current form, which is what the Dems always want to do because the rates can never be high enough to suit them.

ACU Continues to Stand in Way of Tobacco Tax Hike on Consumers – It will be a tough fight because nicotine addicts are extremely popular targets of taxers, as well as the most dreaded of pariahs in almost every part of our society nowadays.

Posted in Uncategorized | Comments Off on