Tax Guru – Ker$tetter Letter

Churches Getting More Online Donations

This make a lot of sense as well. All charities should be able to accept donations online. It’s a big convenience for both them and their donors. I’m a big fan of PayPal and have been using it for the past few years. In fact, when I am shopping online, such as at eBay (where I find the lowest prices for new software), I select vendors who accept PayPal.

KMK

Doctors Add Fees For Calls, e-mails

This makes a lot of sense to me. Of course, it’s because I long ago understood the motivating power of money to influence behavior and have always charged for my services purely based on time spent. Doctors who do start charging will find they receive fewer calls from people who are – for lack of a better term – too lazy to look for things on their own. It happens here in our office every year. We receive calls from clients who can’t find the tax organizer we sent them and want us to mail them another copy. When Sherry notifies them that they will be charged for the time it takes us to print and mail a new copy, it’s amazing how the clients are all of a sudden willing to look a little harder and can locate the earlier copy we sent. It will be no different for doctors’ patients.

KMK

QuickBooks Training Guide

As always, I am running behind in the production of my new QuickBooks training video. In the meantime, I have posted the official QuickBooks training tools that are supplied to us Certified QuickBooks Pro Advisors on my website.

Tax Free Residence Sales

Even the “experts” get confused on the rules. Gail Buckner had this erroneous explanation on how the pro-rated exclusion works when a home is sold after less than 24 months.

Here is my e-mail to her:

Ms. Buckner:

Your explanation in today’s FoxNews.com column on the reduced primary residence exclusion was wrong. The excludable gain itself isn’t pro-rated. The maximum exclusion is prorated.

For example, someone who owned & lived in the home for 12 months and was selling for valid unforeseen circumstances would be entitled to half of the maximum excludable gain, which would be $125,000 for a single person or $250,000 for a married couple. If their gain is less than those amounts, their entire gain would be tax free; not just a portion of it as in your example.

I have much more on this rule on my website at:

http://www.taxguru.org/re/primary.htm

It may seem like being overly picky, but it does make a difference.

Social Security is structurally damaged and in need of immediate repair

I can still remember, 30 years ago in my first college accounting class, one of our first financial analysis projects was of the Social Security system and the financial assumptions and formulas on which it has been based. Our conclusion was that it was a house of cards that could not last in perpetuity as its supporters had claimed. Any private company promoting a similarly structured investment plan would be shut down and its officers tossed into the slammer for fraud. A similar fate would be certain for any trustee of a private pension fund who commingled plan monies and dipped into them as readily as our rulers in DC have been doing for the past forty years.

That is why it has been my biggest priority to help people legally avoid pouring the hundreds of thousands of dollars down the toilet that most workers end up losing through this Ponzi scheme. At least one tip-off to the fraudulent intent in the design of the system is the fact that the only way you can ever receive any money back is to live well beyond the average expected life span and if you pass away before getting any or all of your money back, tough luck. It’s all lost. Who would invest in such a policy in the real free market world? This also explains why participation is mandatory, enforced at the point of a gun by the IRS; unless you take steps to keep yourself (and your money) out of the scheme.

KMK

The most useful tax advisors are just like this. They ask you how much you want to pay in taxes and help you structure things to legally accomplish that. They understand that you aren’t at the mercy of just having to accept taxes without any control.

IRS Updates the �Dirty Dozen� for 2003: Agency Warns of 12 Common Scams

Seven Ways To Avoid An Audit

Some basic common sense tips. I would add not using the e-filing so that you can include enough details and documentation to avoid any further IRS inquiries.

For some tax pros, tax season is only a few months long. For the rest of us, it’s year-round.