Tax Guru – Ker$tetter Letter

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Archive for January 6th, 2009

Posted by taxguru on January 6, 2009

Posted in comix, Obambi, TaxHikes | Comments Off on

State Tax Refunds

Posted by taxguru on January 6, 2009

Reconciling the amounts to report as income on a 1040 with the 1099–G forms that State tax agencies send to IRS has frequently been a little tricky.  When the 1099–Gs are showing incorrect information, I have learned that it’s impossible get the State tax agency to correct their mistake, so it is necessary to add explanatory info to the 1040 in order to avoid a document matching error down the road.

I just received this emailed press release from the Arkansas DFA admitting to some erroneous 1099–Gs that they sent to IRS. 

Subject: FW: State 1099-G Form Issued with Incorrect Refund Amount

Please review the following press release: 

The Department of Finance and Administration announced today that 28,040 taxpayers recently received 1099-G forms indicating an incorrect amount of refund or credit received by the taxpayer.  The incorrect forms were mailed to taxpayers between December 22nd and 29th, 2008.  The Form 1099-G is a Federal form that the Internal Revenue Service requires to be sent to taxpayers to remind them of the Arkansas Income Tax refund or credit they received during the previous tax year.

This problem occurred because of a computer processing error.  When the 1099-G forms were produced, information from 2007 rather than 2008 was mistakenly used to create the forms.  The 1099-G’s are currently being recreated using the correct 2008 information.  The corrected 1099-G forms will be mailed to the affected taxpayers by January 9, 2009.

We sincerely regret this error and any inconvenience you may have experienced as a result.  We strive to provide quality service to the taxpayers of this state.  When errors do occur, we will work to correct those errors as expeditiously as possible.  If you have any questions or need additional information, please contact:  Individual Income Tax at 501-682-1100 (Inside Pulaski County or Outside of Arkansas) or
1-800-882-9275 (Inside of Arkansas, outside of Pulaski County).

Thanks,

As with most cases where an erroneous 1099 is followed up with a CORRECTED one, IRS ends up looking for both amounts on the 1040 rather than ignoring the first one.  So, be careful when working on a 1040 for someone who was lucky enough to receive the admittedly incorrect 1099–G from DFA.   

 

Business Plan Pro

 

Posted in StateTaxes | Comments Off on State Tax Refunds

Madoff Lessons

Posted by taxguru on January 6, 2009

The best learning tool has long been OPM (Other People’s Mistakes) because nobody can live long enough to make them on his/her own.  The recent exposure of Bernie Madoff’s Ponzi scheme should be a good slap across the face to any investor.

From James B. Stewart of the WSJ – The Lessons to Be Learned From the Madoff Scandal.

From Jay Leno via NewsMax

“Congress says they’re looking into the Bernie Madoff scandal. So the guy who made $50 billion disappear, is being investigated by the people who made $750 billion disappear.”

“His family says he suffers from multiple personality disorder. Apparently, every one of them is greedy.”

 

Posted in scams | Comments Off on Madoff Lessons

Roth IRAs

Posted by taxguru on January 6, 2009

I will soon be posting another email exchange with a reader on Roth IRAs.  In the meantime, here are some recent items from the free WSJ on them.

Roth Is a Good Way to Hedge on Your Future Taxes

Advantages Abound When Converting to Roth IRA

 

Posted in Retire | Comments Off on Roth IRAs

Improper property taxes?

Posted by taxguru on January 6, 2009

Calls Grow to Cap Property Taxes – It’s been more than 30 years since the infamous Proposition 13 was passed in California in 1978 to try to hold the line on property tax hikes.  It’s about time that more people in other states start fighting back against this immoral tax rather than just bending over and allowing their rulers to continue the fiscal raping of home owners.

While I despise pretty much all taxes, since they are really nothing more than methods for politicians to confiscate money from the public in order to spend on their own pet projects, property taxes are the least voluntary kind there is because you do absolutely nothing and are hit with them.  Most taxes are generated by doing things, such as earning income, buying or selling things.  Property taxes are new annual levies assessed on assets that you already own, and as many people unfortunately discover, the penalty for not paying them is the loss of the property itself.  Older folks who happen to live in appreciating areas are forced to sell their homes because they can’t afford to pay the annual “rent“ on their own property.  That is immoral and completely counter to the concept of private property ownership. 

 

Posted in PropertyTax | Comments Off on Improper property taxes?