Tax Guru – Ker$tetter Letter

For the past week, I’ve been working on taxes that are due January 15, including C corporations with their years ended 10/31/04, as well as final 2004 estimated tax payments for some individuals, when I noticed that the due date this year is actually Tuesday, January 18 because the 15th is on Saturday and Monday, the 17th is a Federal holiday.  It always slips my mind when Martin Luther King Day comes around. Anyways, anyone panicking about getting their taxes and payments in by the 15th can relax and use those three extra days. 

Money in its less convenient form, cold hard cash:

Trucker missing; so is cargo of 3.6 million nickels – $180,000 weighing 45,000 pounds.

Fine paid in pennies leads to dropped case – 8,200 pennies that the owner is now trying to sell to some idiot on eBay for $25,000.  I was hoping to link to the actual eBay auction for this, but it didn’t turn up in my various searches.

 

It seems that a lot of people are noticing how the GOP has so shamelessly abandoned its principle of small constitutionally authorized government. That was an easy stand to take when they weren’t in control of the Federal Treasury. Now that they’ve seen how much fun it is to dole out the pork, they’re like crackheads and there doesn’t seem to be any way of stopping them. Bush has been their enabler by not having the balls to use his veto power to at least slow down the spendaholics in Congress.

Bottom line, bigger government leads to higher taxes. There is no way around that.

Bush Panel to Outline Tax Reform Options by July 31

Aid for Tsunami Victims May be Tax Deductible

One sign of a person’s maturity is when he realizes that none of these fairy tales is true.

Taxpayers most likely to foot bill for Huckabee’s highway designs – Plenty of higher taxes in store for us here in Arkansas, from our GOP governor.

Principled Giving in Times of Crisis – There are so many scams surrounding charitable donations, that it is difficult to be certain your donations are going to the right place. 

Congress Passes Law Extending Tax Deductions on Tsunami Aid – I don’t mean to be too Scrooge-like here, but as someone who has to prepare actual income tax returns, I hope this doesn’t start a trend of allowing taxpayers to essentially keep their books open for all kinds of certain deductions made after the normal year has ended.  Besides the differences this will create between federal and state returns that I already mentioned, it will lead to double counting of these expenditures when they are also accidentally included in the totals for 2005. While receiving double deductions for the same payments may seem like a good thing from the taxpayers’ perspective, I am just as interested in honesty and accuracy in the tax calculations as is IRS, and this kind of thing can do nothing but mess that up.

Tax Reform Panel – If I come across as overly skeptical of the current tax reform projects, it’s because I have been in this business 30 years and have heard and seen these lofty promises countless times before, with the exact same results.  I would be more than glad to assist in any truly sincere efforts to make taxation simpler and fairer in this country.  However, based on the roster of people chosen as members of the official President’s Advisory Panel on Federal Tax Reform, I don’t see how this time will be any more effective at doing anything but screw the tax code up even more.  While they claim to have a diverse mix of members, I can’t help but notice the glaring absence of any real life tax practitioners.  While politicians and academicians have their different viewpoints, there is no substitute for the real life world of doing actual tax returns and fighting with IRS on behalf of real people.  Contrary to popular belief, there are countless huge differences between the theoretical and real world applications of the tax system.  Ignoring the real world aspects is ridiculous and shows an utter lack of sincerity in this year’s stab at fixing the tax code.  I am surprised and disappointed that our first MBA president would establish such an incomplete panel and truly expect it to do any better than  the dozens of similar ones previously.

I was recently working on a 2003 1040 for a client who had earned some income in Portugal.  The statement showing the income and tax withholding amounts was in euros.  I thought it would be an easy thing to convert these amounts to US dollars; but the normal web sites I have used in the past, such as Yahoo’s and the Wall Street Journal, only had the current exchange rates and don’t allow historical rate searches. 

Since the income was received in July of 2003, and there has been a lot of well publicized fluctuation in the exchange rate since then, I wanted to use the July 2003 rate. It took a bit of Google web searching before I found a handy free web site that does allow this kind of historical research, www.x-rates.com.  With a URL like that (x-rates), I’m sure they’re mistaken for a completely different type of web site.

Since I have a number of clients who receive income from foreign sources, this kind of conversion tool will be very handy, so I have been added it to my blogroll for quick access. 

It did make a difference.  The current exchange rate is 1.31, while it was only 1.16 back in July 2003.  On several thousand dollars of income, using the more precise figure was helpful for the client. As I always do, I attached this documentation to the 1040.

BUSH’S TAX DE-CODER RING