Tax Guru – Ker$tetter Letter

Teaming up for higher taxes in Virginia

Critics of Fletcher’s Kentucky tax plan attack its ‘revenue neutrality’

Your own people may be the problem – This report of poor computer security and lack of computer skills at the IRS really shouldn’t surprise anyone. Their computer systems are literally from the Kennedy Administration, as are many of their procedures.

Bill would let Colorado taxpayers share excess state money – While at first blush, this sounds like a good idea, it’s not as practical in reality. I have seen a few times with the PRC, where the State spent millions of dollars sending out tiny refund checks to taxpayers in order to distribute a budget surplus. Then, a few years later, they are running a big deficit and are doing everything they can to raise taxes.

A wiser move would be bank the surplus for the inevitable “rainy day” when black ink turns red. The very legitimate worry that many taxpayers and critics of government have is that the rulers will be unable to resist the urge to spend any excess money if it’s not sent back to taxpayers. It would be more cost effective to pass legislation requiring any surplus to be placed into a special reserve fund.

Tax Tips for Members of Our Armed Forces

States turn to sales tax to compensate for revenue shortfalls – Our rulers can raise sales taxes much quicker than income taxes, as they just did here in Arkansas.

Bush Declares John Kerry a Serial Tax-Raiser – Well, duh. What else would we expect from a Socialist Senator from Taxachusetts?

Death, taxes, airline food – As usual, Dave Barry has a slightly different take on the tax law changes than we normally get from the more conventional tax experts. For example, I don’t know how I missed the following new tax credit:

If you or any of your legal dependents saw, or heard about, Janet Jackson’s Super Bowl halftime-show performance, you may claim a special one-time Traumatic Unexpected Nipple Gander Tax Credit of $250 for each eyeball that was exposed, up to a maximum of seven eyeballs per family unit for joint taxpayers filing singly.

The learning never stops in the tax game, where the rules are constantly changing.

Besides my CPA type work, pretty much the only other thing I do, and the only reason I leave my office, is to help out with our local volunteer fire department. After a recent class we took at the local college on arson investigation, Sherry has started bringing her camera along on calls. We’ve set up a mini website with some of the pictures she has taken, including several from last night’s work on a controlled burn up the road from our place. That was a strange experience for us, since we are so used to trying to put fires out and this time, we were trying to burn the place down.

Child tax credit causes 1.35 million return goofs – This exact same problem happened a few years ago, when people forgot whether or not they had received an advance refund check from IRS during the year. I had a few dozen clients where IRS jogged their memory by adjusting their tax returns to account for the fact that they had indeed already received those payments and weren’t entitled to them again with their tax returns. That kind of sloppy bookkeeping was one of the reasons we have been forcing more and more of our clients to enter everything into QuickBooks; so that we can look for those advance refund checks before preparing the tax returns and avoid the embarrassment of having IRS catch this mistake.

Web Site Shows Neighbor Campaign Donations – You can type your zipcode into this site and find out what people in your area have legally donated to the various presidential candidates. The illegal donations and laundered ones, where employers give their workers money to donate, take a little more digging to uncover.

Mental-health tax drive advances – The rulers of the PRC never tire of thinking of new ways to squeeze money out of people and giving them reasons to move to other, less hostile, states. A plan to add a new tax of one percent of gross (not taxable) income over one million dollars to fund mental health is itself bordering on insanity. Of course, it plays directly to the DemonRats’ main constituency, the “hate the rich” crowd; so it could actually have a chance of becoming law if Governor Arnold doesn’t veto it.