What Incredable Re=-Appearing Blog

Hi. I have been floored by a flu that might be lime disease With a little luck I will be functional again in a couple of days. This has just been a roller coaster of a sickness and is now headed toward 2 weeks. Seeing the doctor tomorrow. More later.

The Incredible Re-Appearing Blog

You may have noticed that the blog has been a bit erratic over the last few weeks. I was concentrating on my clients rather than you and then got hit by my annual post tax season cold the made my head even fuzzier than normal. Who knows what the blog might have said if I wrote it this last week. But I’m baaaaaaaaaack!

How about a few comments on the tax season.

It turned out to be a delayed rush this year. Many more of my clients showed up at the end of our deadline (March 15th) this year than last year. In case you are wondering, we need our clients tax information by March 15th to get the return completed by April 15th. What seemed to be happening was that no one wanted to open up their investment or retirement statements (I haven’t opened my since September) and then extended the practice to their " Important Tax Documents". Suddenly, with our deadline looming, people started opening envelopes and getting their information to us.

This was coupled with a new software program that had a learning curve that went straight up. It wasn’t until about March 15th that we felt comfortable with the program and this created a double whammy as March changed into April. Hectic would be a mild way to phrase it. Ah but I’m a loyal Red Sox fan. Wait until next year.

My conversations with my clients changed slightly during the course of the 3-½ months. In January and February it was hard to avoid doom and gloom. No one was spending any money, planning vacations or buying cars. Thus we have to bail out GM. March saw a slight positive movement. Some of my small business clients saw an increase in sales, admittedly from dismal numbers. My unemployed clients started to say that they could at least get their resumes out to people and maybe even connect up with a real person rather than the stone wall they were running into before. Are we out of the wood, no but it seems like the uphill climb is starting to get a bit easier.

The only good news that I can glean is that most of my clients are getting refunds rather than making payments this year. Of course this is because they lost money in the stock market in 2008 when then made big gains in 2007.

So I’m back at the keyboard and looking forward to an easier pace of work and blogging until January 1, 2010.

Where's My Refund?

You filed your return, set up the direct deposit and are watching your checking account for the arrival of your tax refund, but it has not arrived. What should you do? With the help of the Internet, it is easier than ever to find out what happened to your refund.
Here is a link to take you to the IRS Web site to find out what happened to your refund:

https://sa2.www4.irs.gov/irfof/lang/en/irfofgetstatus.jsp

You will need your social security number, filing status, and the amount of your refund. The IRS will quickly give you a status. If your refund has been waylaid somewhere, they will give you a phone number to call to find out what is happening.

Massachusetts has a similar program that requires you to register and set up a user name and password. The link for this service is:

https://wfb.dor.state.ma.us/WEBFILE/wsi/

New Car Tax Credit? (NOT)

(Thank you to Ruth for the question.)

There is a lot of confusion around the ‘New Car Tax Credit". The truth is, its not really a credit but an expanded deduction for the sales and excise taxes paid on a vehicle.
Here are the basics:

The vehicle must be a new.

It can be a car, light truck, motor home or motorcycle. There is a weight limit on the vehicle.

The vehicle must be purchased after Feb. 16, 2009, and before Jan. 1, 2010

You can deduct the sales and excise taxes paid on a new car for up to the first $49,500 of cost for the car.

You do not have to prepare a Schedule A Itemized Deductions to take advantage of this program. It is deductible on the first page of your 2009 tax return.

You lose the deduction if your income exceeds $135,000 if you are single and $260,000 if you file a joint tax return.

You can deduct it on your 2009 return and cannot take it on your 2008 tax return.

What is it worth? Not much. If you buy a $20,000 car and pay a 5% sales tax on it, you get to deduct $1000 from your income before you figure your taxes. For most people that translates into $250 cash in your pocket. Its better in your pocket than Uncle Sam’s but it does not seem like much of an incentive to go out and buy a new car.

There is not a lot of guidance from the IRS on this topic so things might change a little as the year passes. Here is a link to the IRS website where you will find essentially the same information as above.

http://www.irs.gov/newsroom/article/0,,id=205863,00.html?portlet=7

Do You Have any questions?

One of the good parts about a blog is the interaction with the readers. I enjoy reading the comments and then responding if appropriate. The comments are moderated but that is only to weed out the obscene or the obvious advertisements and spam. So far there has been no edited or deleted comments.

Now its your turn. Please send me questions or comments. If there is some part of the tax law that you want some information on, please let me know. I have a good source of subjects from my practice but could always use a fresh perspective. You can comment on this blog or you can send questions to thomstaxtalk@gmail.com

Ode To A New Economy

My apologies to Bare Naked Ladies. Connect to their web site here http://www.bnlmusic.com/

Once I had a million dollars. (Once I had a million dollars)
But I just lost my house (But I just lost my house)
Once I had a million dollars. (Once I had a million dollars)
Sold the furniture in my house.(Wanna buy a nice chesterfield or ottoman?)
Once I had a million dollars. (Once I had a million dollars)
Bought you a kiddie-car (a nice pedal automobile)
Once I had a million dollars

Once I had a million dollars. Now I live in a tree fort in your yard.
Once I had a million dollars. You could join me, it wouldn't be that hard.
Once I a million dollars. (We would put a little tiny fridge in there somewhere.)We could just go up and hang out. (Open the fridge there would becheap food laid out for us, little half subs and moldy bread and things.)

Once I had a million dollars (Once I had a million dollars)
I sold your fur coat (But not for much cause its not real)
Once I had a million dollars. (Once I had a million dollars)
We ate our exotic pets (both the llama and the emu)
Once I had a million dollars. (Once I had a million dollars)I sold everything that remains (ooh all them crazy elephant tusks and such)
Once I had a million dollars.

Once I had a million dollars (we couldn’t drive to the store.)
Once I had a million dollars (we'd take a bicycle to save some more.)
Once I had a million dollars (we’d have to eat Kraft dinner.)We’d get sick of eating Kraft dinner. Well of course we would and we'd still eat more. ANDSteal all the fanciest ketchup for it...Dijon ketchup! mmmm…

Once I had a million dollars. (Once I had a million dollars)
I'd buy you a Goodwill dress. (but not a real Goodwill dress that's cruel)
Once I had a million dollars. (Once I had a million dollars)
We’d sell all our art. (Poker playing dogs on velvet)
Once I had a million dollars. (Once I had a million dollars)
We ate our monkey. (He joined the llama and the emu)
Once I had a million dollars

Once I had a million dollars (Once I had a million dollars)
Once I had a million dollars (Once I had a million dollars)
Once I had a million dollars…
I was rich.

A Worthless Letter

Have you received a letter from Compliance Services that started out "Annual Minutes Requirement Statement"? It then quoted various laws and told you to complete the form and send it to them with a check for $125. It is an official looking form but does indicate that it is not a government form.

What is the purpose of this form? That is a good question. Based on the instructions, the company will prepare some document and send it back to you for filing with your other corporate records. They threaten you with dire results if you do not comply. Their main goal is to scare you into sending them $125. Don’t do it! Dealing with this company does not provide you with any additional protection.

My suggestion: THROW THE LETTER AWAY. The company is not providing any benefits for the fee.

If you are incorporated you must file an annual report with the Secretary of the State of Massachusetts. You can do this online or on paper. The cost is $125. (Guess how the company calculated their fee!) Here is a link to the Secretary of State’s web site where you can get much better information on your filing requirements. There also is a posting about the Compliance Services letter.

http://www.sec.state.ma.us/cor/coridx.htm

Please pass this blog on to your incorporated friends.