Owner gets Ferrari back after paying $3 mil in tax – Autoblog brings this story of how car collectors missed a chance to pick up a rare $10 million race car for a bargain price of only two million smackers because the owner had the audacity to settle up with IRS first.

IRS Rebuts Those Making Frivolous Arguments on Paying Taxes

With marriage, gay couples face tax tangles – Massachusetts is one state in which we don’t currently have any clients; so we’re not having to deal with this disparity between Federal and State filing statuses.  Good luck to those tax preparers who are. 

Update: It’s looking more and more as if California will be heading in the same direction as Mass on this issue; so we may need to start working on the best strategies for this since we do have several clients out there on the Left Coast. 

IRS says its Web sites are safe – And we all know how proficient IRS is at handling computer problems.

I was just working on my first 2004 1040 where the Lacerte program determined that the new sales tax deduction was higher than the state income tax payments, for a client up in Missouri.  The program also reminded me that this was based on the IRS Publication 600 sales tax tables, which only include the state-wide tax rates.  Since almost all cities and counties tack on their own additional sales taxes, I wanted to add those in for this client.

I knew the client’s county name, and was prepared to scour the Missouri sales tax tables for the applicable rate, but was pleased to find an automated look-up feature on the DOR’s website, where we can just enter a person’s address and it pops up with the total sales tax rate.  Clicking on another button on the results page gives the actual breakdown between state and local rates.

In this case, the state-wide rate was 4.225% and the local rate was another 1.0%.  When I added the additional local rate into the Lacerte input screen, the amount it computed as a Schedule A deduction went from $746 to $923.  I know there are places just around Arkansas where the local sales taxes practically double the state rate, so I can see taking this additional step being worth the while for the clients.

Actually, the best thing would be for Lacerte and other tax prep software to add a more comprehensive database of local sales tax rates to their programs rather than make us do these things manually.  I have passed this idea along to Lacerte, and hopefully they will add this for their 2005 programs.  This is what I sent to Lacerte via their product feedback screen:

Rather than just use the IRS’s Pub 600 state-wide sales tax table, it would be very useful if your program could use the clients’ zipcode to look up their combined local and state rates so that we don’t have to manually enter the local rates for each client.  Your billing department already uses this exact kind of database, so we know it exists.

This late in the year, I wouldn’t expect Lacerte to make such a modification to the 2004 program. Even though I will be preparing over 95% of my 2004 1040s after April 15, Lacerte operates under the assumption that all of their users are finished by April 15 and has no interest in working on prior year programs after that date. 

I would be interested in hearing from other tax preparers who use different software as to any that do already have a more accurate local sales tax look-up feature included.

Since our clients are literally spread all over the country, I am not planning to look up each one’s local sales tax rates, unless it turns out that we already have a sales tax deduction higher than that for state income taxes, or are very close.  I’m hoping other states’ websites will make it as easy to determine the local rates as it was for Missouri.

Courtesy of Vic Harville

If Arkansans are so willing to pay the tax on stupidity, we might as well let them do that here.

Courtesy of Bruce Beattie:

Cut emissions and your tax bill – A good summary of the special tax breaks for buyers of hybrid fuel cars, courtesy of Autoblog.

Lil’ Kim Says She Left Taxes to Accountant – This is the now classic Willie Nelson Defense to not paying taxes.  It won’t do much good for the million dollars in taxes she owes IRS.

Gas Prices Seen Hurting SUV, Truck Sales – Well, duh.  As I’ve been saying every time some freedom hating environmental wacko proposes banning SUVs or charging extra sin taxes for owning them, their cost and the cost of their fuel and insurance are penalties enough. 

Pay Your Taxes, Pa-Rum-Pum-Pum-Pum…. – Thanks to Ben Cunningham for this article on the “creative” way one city in India is using to motivate people to pay their property taxes.  This isn’t meant to give any ideas to tax agencies here in the USA; but to show just one more way in which taxpayers are made to suffer.