WHAT’S NEW FOR NJ INCOME TAXES FOR 2012

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The2012 NJ state income tax forms and instructions are now available at the NJ Divisionof Taxation website.
Thebig change for the 2012 NJ-1040 is the new “Alternative Business Calculation Adjustment”.
Beginningwith 2012, taxpayers who have losses in the categories of -
·     netprofits from business,·     netgains or net income from rents, royalties, patents, and copyrights,·     distributiveshare of partnership income, and ·     netpro rata share of S corporation income -    can use the losses to calculate anadjustment to their taxable income (“Alternative Business CalculationAdjustment”). 
Thepercentage used to calculate the adjustment is being phased in over five years.The percentage will increase from 10 percent for tax year 2012Taxpayers cancarry forward unused losses in those categories for a period of 20 years tocalculate future adjustments. 
Taxpayerswith income and/or losses in any of these categories must complete two newreturn schedules: Schedule NJ-BUS-1 (Business Income Summary Schedule), andSchedule NJ-BUS-2 (Alternative Business Calculation Adjustment) to calculatethe amount of their adjustment or loss carryforward.
Anew Line 34 has been added to Page 2 of the NJ-1040 to enter the AlternativeBusiness Calculation Adjustment.
Ilook forward to the January 2013 NJ-NATP “Famous State Tax Seminar” to learnhow this new adjustment will work.
Theonly other changes to the NJ-1040 are –
·     Anew worksheet has been developed (Worksheet G, Use Tax Calculation) to make iteasier for New Jersey residents to determine the amount to report on Line 45,Use Tax Due on Internet, Mail-Order, or Other Out-of-State Purchases.
·     Anew oval has been added below the signature line that must be filled in if acopy of a deceased taxpayer’s death certificate is enclosed with the return.This oval should be filled in and a copy of the death certificate enclosed onlyif there is a refund due and the check needs to be issued to the decedent’ssurviving spouse/civil union partner or estate.
·     Threenew funds have been added to the list of organizations to which taxpayers cancontribute on the New Jersey tax return – the Boys and Girls Clubs in NewJersey Fund, the NJ National Guard State Family Readiness Council Fund, and theAmerican Red Cross-NJ Fund.
Other than that the 2012 NJ-1040 isno different than the NJ-1040 of past years.
FYI - For 2012, the maximum employeeunemployment insurance/workforce development partnership fund/supplementalworkforce fund contribution (SUI) was $128.78, the maximum employee disabilityinsurance contribution (SDI) was $60.60, and the maximum employee family leaveinsurance contribution (FLI) was $24.24.
Iwas pleased to find that it appears there is no longer an income limitation forsubmitting a NJ-1040 online via the NJWebFile system.  I should be able to submit the 2012 NJ-1040for taxpayers with NJ Gross Incomes over $150,000 this way.
TTFN

2012 – THE YEAR IN TAXES

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It is timefor my annual tax year in review post.Thetax filing season went relatively smoothly. Due to the idiots in Congress’ inability to think or act there wasnothing new in actual tax law – what is taxable and what is deductible – and nounnecessary processing delays for 2011 returns (except for early returns filedelectronically – which did not affect me). The expiring Bush Tax cuts, the usual extenders, and BO’s AmericanOpportunity Credit had all been extended through at least the end of 2011 in arelatively timely manner.  
Ihad been concerned before the season officially began (for me February 1st)that the major tax forms (1040, 1040A, Schedules A + B) were no longeravailable at local Post Offices – but soon discovered that the forms were nowavailable (although in a bit less “bulk) at local libraries.  As a pleasant surprise I found that, whilethe libraries did not have NJ-1040 forms, they did have New York IT-201s andIT-203s!
Themajor issue of this tax season involved the new requirements for cost basisreporting, and the resulting new Form 8949 and the revised Schedule D.  For tax year 2011 brokers were required toreport to client taxpayers, and to the IRS, the cost basis of most stocks,including foreign stocks, acquired on or after January 1, 2011 (“covered”securities) on Form 1099-B.
TheForm 8949 was used to report the individual short-term and long-termtransactions in three separate categories – sales where the cost basis wasreported to the IRS on Form 1099-B, sales where the cost basis was not reportedto the IRS on Form 1099-B, and sales that were not reported on a Form1099-B.  A separate Form 8949 wasrequired for each of the three categories. The Schedule D served as a summary of the 8949s.
Thevarious brokerage and mutual fund houses all responded to the new reportingrequirements differently, some excellently and a few poorly.  This new system required some additionaltime, but only a few cases generated additional agita. 
Thealso new requirement of credit and debit card merchants and third-party payerslike PayPal to report transactions to the IRS, and to the recipient, turnedout, despite initial concerns, to be a non-issue, as taxpayers did not have toseparately report this income on 2011 Schedules C, E, F and entity returns.
Theonly other major reporting change was in the format of Page 1 of the Schedule E(rental and royalty income and deductions). This was a PITA at first (I really saw no need for the revisions), but Isoon got used to it.
Therewere no major problems within my own practice during the season.  My new, faster, laptop, its cable access, andmy copy machine ran smoothly throughout the 2½ months.  The printer, while deciding it would onlyprint colored pages in pink, and the black printing being less than perfect,did not slow down operations.  There wereno issues with my car or any personal concerns to distract and take time awayfrom the job at hand.  And there were noindividual client issues.
TheInternal Revenue Service lost two of the major architects of the current taxreturn preparer regime in 2012 via resignation. David R. Williams, first head of the Return Preparer Office, resigned atthe end of August, replaced by Carol A. Campbell.  And Commissioner Doug Shulman stepped down onNovember 9^th.  IRS Deputy Commissionerfor Services and Enforcement Steven Miller, a 25-year veteran of the agency,took over as Acting Commissioner
Davidwill certainly be missed.  While he and Idisagreed on some of the details of the regulation regime, specificallyexempting CPAs, attorneys, and “supervised employees” from the samerequirements as other PTIN-holders and a grandfathering exemption from the testfor experienced preparers, he did a good job as the face of tax pro regulation.
2012was the first year that non-exempt PTIN-holders were required to take at least15 hours of CPE in federal taxation, including 3 hours of updates and 2 hoursof ethics.  As David predicted, many newCPE providers jumped on the bandwagon.  Anumber of tax preparer “quasi-membership” organizations sprang up during theyear, most of them solely for the purpose of promoting for-profit companies’CPE classes.  My email in-box has beenchock-a-block with CPE offerings for the past few months.  I had considered becoming a CPE provider, butdecided against it for now.
Ihave always taken more than the required 15 credits each year, most, if notall, being classes offered by the National Association of TaxProfessionals.  2012 was no different – Iended the year with 24 credits of federal CPE (and 8 more of state tax CPE).
Theconstitutionality of “Obamacare” had been in question since its passage.  In June of this year the Supreme Court upheldthe law. The Supreme Court’s decision, combined with President Obama’s re-election,ensured that Obamacare is here to stay, at least for a while, and its tax hikeswill kick in next year.
Thebiggest tax story for 2012, once again (the 3^rd year in a row thishas been the biggest tax story!), was the continued inability of the idiots inCongress to accomplish anything.  Thepopular package of “extenders”, including the temporary AMT patch, expired onDecember 31, 2011, and the various Bush and Obama tax cuts and benefits arescheduled to expire on December 31, 2012. As of this writing nothing has been done by the idiots in Washington toextend anything.  The result - the startof the upcoming tax filing season, and the processing of refunds, will bedelayed, and the country faces what has been called “Taxmagedden” on January 1,2013, as it tumbles over the “fiscal cliff”.  
Havingdone nothing all year, the idiots shouldhave just extended everything expired and expiring through 2013 (similar towhat they did in 2011) after the election and begin 2013 with serious work onserious tax reform.  At the very leastthey should have extended the AMT patch through the end of 2012.  But then again – they are idiots!
Overthe past years the members of Congress have proven that they are incompetentand ineffective dolts with no concern for the American public, and areincapable of compromise or of independent thought.  The current Congress has one of the lowestapproval ratings in history, although despite this fact most incumbents who ranin November were re-elected.  As I saidearlier, I guess the thinking was the incompetent idiot you know is better thanthe incompetent idiot you don’t.   
And, according to the NBC report “Congressto Make History -- But for the Wrong Reason” (highlight is mine) -
“By passing just 196 bills into law so far, it is in the running to become the least productive Congress since the1940s.
In fact, that amount is 710 fewer public laws than was producedby the 80th Congress (from 1947-48), which first earned the moniker‘Do-Nothing’ Congress.”
Christopher Bergin of THETAX ANALYSTS BLOG read the minds of the idiots in Congress and quoted theirChristmas message to America in his recent post “Tin Ear Tinhorns” –
“MerryChristmas from Washington, D.C. Here’s your bag of coal.
It’schilly here in Washington. We don’t care how it is where you are. We don’t careabout your 401k plan. We don’t care about whether you have to pay theAlternative Minimum Tax for this year. We don’t care if you don’t get your taxrefund on time or if you have to wait to file your tax return until July. Wejust don’t care.
InWashington, all we see is ourselves. We drive around in our self-importanthaze, yapping on our cell phones and cutting people off on I-66 because what weare doing is all that matters and is certainly more important than anythingyou’re doing.”
The 2011 Tax Offender ofthe Year Award, presented each year by Russ Fox of TAXABLE TALK, wasCongress.  The criteria for the award – “it really needs to be a Bozo-like action oractions”.  Chances are very good thatthe idiots in Congress will be the recipient of this designation again for2012.
There is nothing toindicate that the new Congress to be seated in January of 2013 will be any lessincompetent or ineffective, or will have any more concern for the Americanpublic, than the current, retiring one.
And let us not forget that 2012 wasa Presidential election year – which only further motivated the inaction of theidiots in Congress.  While the two-yearcampaign did highlight the need for tax reform, the result was a blow to thehopes for a substantive rewriting of the Code. BO’s tax plank called for more complexity and confusion and continuedmisuse of the Code.  
Atthe end of my 2011 tax year in review post I predicted –
“As2012 is an election year it is expected that nothing of any consequence will beaccomplished in the tax arena (or any other arena).  Next February the idiots in Congress willprobably extend the payroll tax cut for the rest of the year, and, as Isuggested above, next December they will pass the usual year-end extenders billand also continue the ‘Bush’ tax cuts for another year or two.”
I was almost 100% on the money,except for the idiots extending everything in December. 
Let us hope that 2013 will see thepassage of real tax reform – although I won’t hold my breath!
So, as I ask each year at the end ofthe post, did I forget anything?
TTFN

Why Filing Taxes for Your Client, Even When They Aren't Required, Might Be a Good Thing!

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Most all tax preparers understand how income levels and filing requirements are contingent upon filing status, age and the type of income clients receive. What is often overlooked, however, even when clients aren't required to file with Uncle Sam, is the fact that it may indeed advantage them to do so.

Not surprisingly, the Irs provides definitive instructions on the requirements for filing Forms 1040, 1040A, or 1040Ez. With all of the new prestige tax revisions and exceptions, some tax preparers are turning to Tax Cpe procedure materials or Ea Cpe curriculum to brush up on how these new revisions stand to advantage clients. Some continuing instruction tax courses are even focused exclusively on these new tax laws, showing tax preparers how to clients who fit into this scenario to get the greatest bang out of their tax returns.

Form 1040 Instructions

Quick Tips on Non-Required Filing Benefits

Why Filing Taxes for Your Client, Even When They Aren't Required, Might Be a Good Thing!

Homebuyer Credit

First time homebuyers are eligible for a maximum 00 or 00 if filing married status separately. To qualify, a someone must have entered into a compact on or before April 30th 2010 and have accomplished by September 30th 2010.

Tax Withheld

For taxpayers who have estimated their tax payments, had a former years overpayment, or had income tax withheld, they may be eligible for a refund.

Child Tax Credit

If a taxpayer has at least one child that qualifies and they didn't receive the full estimate of the current Child Tax prestige originally, they could get a refundable credit.

American occasion Credit

Given the newly renamed and vast Hope credit, taxpayers can claim this prestige for tuition and positive fees for undergraduate and post-secondary education. The maximum prestige per student is ,500.

Earned income Tax Credit

For those individuals who worked but earned dinky in 2010, this tax prestige may prove beneficial in considering to file because it may qualify them for a refund.

Health Coverage Tax Credit

This prestige is primarily for individuals who have received Adjustment aid (either Trade or Reemployment Trade). Further, those receiving Pbgc pension payments may also qualify and receive a credit.

Quick Tips of Non-Required Filing for Losses

Two Scenarios

When taxpayers have suffered an whole loss because of an speculation losses:

• Only if filed in 2010 can they carry that loss transmit and offset dutible capital gains in future years
• They can carry these losses as far back as 2008 and perhaps ask a reimbursement of carry forward, but, again, only if they filed in 2010.

When taxpayers have company losses that experienced a net operating loss (Nol) for 2010:
There are a plethora of resources ready that cover these details and the types of taxpayers that fall into this unique category. The key for enrolled agents, certified collective accounts and other tax professionals is to do the research, sign up for an enrolled agent class or look on the tax Cpe sites that showcase this information.

Irs Circular 230 Disclosure

Pursuant to the requirements of the Internal income aid Circular 230, we forewarn you that, to the extent any guidance relating to a Federal tax issue is contained in this communication, together with in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax connected penalties that may be imposed on you or any other someone under the Internal income Code, or (b) promoting, marketing or recommending to another someone any transaction or matter addressed in this communication.

Why Filing Taxes for Your Client, Even When They Aren't Required, Might Be a Good Thing!Is the IRS lying and defrauding the American people? Hear from the man who beat Video Clips. Duration : 45.58 Mins.

Robert Lawrence challenged the IRS claim that he is required to file a 1040 Income Tax Confession Form and pay a Federal Income Tax. The US Government charged him with committing “tax crimes”, but later dismissed these charges! The IRS dropped the case when they found out that Robert relied on the instructions within the IRS' 1040 booklet and the law. Robert had proof from these sources that he was not required to file. Hear how this living “David” won his victory over the paper-tiger “Goliath” (the IRS). Freedom Law School Speaker: Robert Lawrence Host: Peymon Mottahedeh
Keywords: googlevideo

2012's Worst Paying College Degrees

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Payscale.com analyzed the data in its online salary database and has revealed the college degrees that go along with the jobs that have the lowest median pay for their respective career professionals in its 2012-13 College Salary Report. Note - these figures represent the typical annual combination of pay, bonuses, commissions and profit sharing earned by people who have been successful in working in these fields for at least 10 years and were willing to participate in Payscale.com's survey, which means the reported median incomes will likely be inflated above each field's actual median incomes....

College Degree	Median Annual Salary
Child and Family Studies	$37,700
Social Work	$45,300
Elementary Education	$46,000
Human Development	$47,800
Special Education	$48,900
Culinary Arts	$49,700
Athletic Training	$49,800

So what possesses people to take out big student loans to go into professions like these that offer such little compensation? Payscale.com offers the following insight:

"According to our research, people in these majors typically believe their work makes the world a better place," says PayScale’s lead analyst Katie Bardaro.

To translate, the people in these majors are perhaps so disconnected from reality that they do not recognize that the reason their trades provide so little return on their educational investment is because they really do not require unique ability, which is why society does not reward them with greater compensation.

These people are then exploited by the higher education establishment, which really does know better, but can't help noticing that these same people are willing to pay nearly the same amount of money for their college degrees as do people in careers that society values a lot more.

And let's not forget the role of the U.S. federal government in guaranteeing and issuing student loans, which has its own ulterior motives for pushing higher education that offers little real benefit to society.

Elsewhere on the Web

Say what you will about the careers that go with the degrees above, but at least many of the people who pursue these degrees might actually get jobs in their fields of study, if only low paying ones. Kiplinger's Caitlin Dewey takes things several steps further and identifies the college degrees in Payscale.com's database that combine low pay with high rates of unemployment for their graduates!

Also, this isn't just an American phenomenon. Don't miss this perspective by a recent PhD graduate in Britain who complains that the "real world" doesn't understand or appreciate their skills.

Image Source: Global Elites.

A First Look at 2013's Quarterly Dividends

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We now have dividend futures data through the fourth quarter of 2013. Our chart below shows how the expected future for dividends looks:

Given all the dividend-related activity following the 6 November 2012 election in the United States, where companies have acted to pull dividends from 2013 into 2012 instead to beat a now guaranteed dividend tax increase, we anticipate that there may be quite a bit of error in the actual dividends that will be paid in 2012-Q4 and for 2013-Q1. We believe the value that will actually be recorded for 2012-Q4 will be about $0.42 per share higher than what we've shown on the chart above based on how much money appears to have been transferred from 2013-Q1.

Looking at the history of the expected future for that quarter, 2013-Q1's expected cash dividend of $7.88 per share is down considerably from the high value of $8.30 per share that was expected to be paid in that quarter back on 17 October 2012. Almost all of the decline in the level of expected dividends for 2013-Q1 has taken place since 15 November 2012.

Looking forward now in time, the expected level of cash dividends for the S&P 500 looks as if the first three quarters for the U.S. economy in 2013 will be lackluster. The fourth quarter looks as if it will be better by comparison, but even here we've already seen some erosion in investor expectations for that future quarter.

Here, the expected dividends for that quarter first debuted on 13 December 2012 at $8.90 per share. That has fallen to $8.84 through the futures for 19 December 2012.

We hope you've enjoyed 2012. As we've long forecast, 2013 will be a very different story....

The Growth Trend of Americans Living Alone

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Following on the heels of our finding that the increase in the share of single person households over time is the primary factor in the observed increase in U.S. income inequality for households over the last six decades, we thought it might be interesting to share what we found in the U.S. Census' data from 1940 onward regarding the growth trend of Americans living alone.

Our chart below reveals the general trend for how single person households grew from 7.7% of all U.S. households in 1940 to an estimated 27.5% in 2011.

Here, we find that the percentage share of single person households in the U.S. doubled in the 28 years from 1940 to 1968. It then took another 20 years for the percentage share of single person households to more than triple its 1940 level, reaching that mark in 1988. Since that time, the growth rate of householders living alone has sharply decelerated. The percentage share of single person households has only increased by 3.5% in the last 23 years.

In essence, the number of single-person households in the U.S. grew exponentially from 1940 into the mid-1960s, then steadily from then until about the early 1980s and at a decelerating pace in the years since.

Data Sources

U.S. Census Bureau. Households by Size: 1960 to Present. [Excel spreadsheet]. Accessed 16 December 2012.

U.S. Census Bureau. Historical Census of Housing Tables: Living Alone. Accessed 16 December 2012.

Visualizing Teens Working Full or Part Time

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Today's data visualization exercise features the Bureau of Labor Statistics' data reporting the number of U.S. teens working either full or part-time, which goes back to January 1968. Our first chart improves on the BLS' data, by showing how both full and part-time working 16 to 19 year olds make up the complete teen employment scene:

Looking at the chart, we see that full-time jobs for teens peaked in 1979, while we see that part-time jobs for teens peaked in 1999. Overall, the number of part-time jobs for teens has been more stable than the number of full-time jobs, which have been declining since 1980.

The decline in full-time jobs for teens is especially visible in our second chart, which shows how the relative share of full-time jobs for teens has declined in stages over time:

As a short primer to the reasons why the decline in the relative share of full-time jobs for U.S. teens looks the way it does, we'll point you to one document, which reveals the history of both the U.S. federal and California's minimum wages. Note the timing of when major shifts occur in our two charts with the dates listed....

A First Look at 2013's Quarterly Dividends

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We now have dividend futures data through the fourth quarter of 2013. Our chart below shows how the expected future for dividends looks:

Given all the dividend-related activity following the 6 November 2012 election in the United States, where companies have acted to pull dividends from 2013 into 2012 instead to beat a now guaranteed dividend tax increase, we anticipate that there may be quite a bit of error in the actual dividends that will be paid in 2012-Q4 and for 2013-Q1. We believe the value that will actually be recorded for 2012-Q4 will be about $0.42 per share higher than what we've shown on the chart above based on how much money appears to have been transferred from 2013-Q1.

Looking at the history of the expected future for that quarter, 2013-Q1's expected cash dividend of $7.88 per share is down considerably from the high value of $8.30 per share that was expected to be paid in that quarter back on 17 October 2012. Almost all of the decline in the level of expected dividends for 2013-Q1 has taken place since 15 November 2012.

Looking forward now in time, the expected level of cash dividends for the S&P 500 looks as if the first three quarters for the U.S. economy in 2013 will be lackluster. The fourth quarter looks as if it will be better by comparison, but even here we've already seen some erosion in investor expectations for that future quarter.

Here, the expected dividends for that quarter first debuted on 13 December 2012 at $8.90 per share. That has fallen to $8.84 through the futures for 19 December 2012.

We hope you've enjoyed 2012. As we've long forecast, 2013 will be a very different story....

What Difference Would Banning Guns Make?

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In the wake of the Newtown school massacre, we've noted a strong uptick in our site traffic by people wanting to find out how different the U.S. might be if the nation adopted Canada's much more restrictive firearms laws. This post gathers all our analysis on that topic from 2011 in one place.

Who Kills Who

We examine the FBI's data on the race of victims and their killers. We find that the vast majority of offenders prefer to kill their own kind (that evidence is borne out elsewhere, where criminals also seem to prefer killing other criminals!)

U.S. vs Canada: Comparing Oranges and Apples

We want to compare the U.S. and Canada's murder statistics, but find we can't do a direct comparison because Canada is significantly lacking in two things the U.S. has in much greater quantities: blacks and Hispanics!

U.S. vs Canada: Comparing Apples to Apples

We work out how to get around Canada's demographic deficiencies in reporting its homicides to be able to directly compare the populations of both nations.

U.S. vs Canada: Homicide Edition

We determine the real difference in the number of homicides per 100,000 people between Canada and the most demographically-similar-to-Canada portion of the U.S. population.

U.S. vs Canada: Homicide Modi Operandi

This is the one post that has drawn the most attention since the shootings in Connecticut. We break down the number of homicides per 100,000 by method for Canada and the most demographically-similar-to-Canada portion of the U.S. population, finding that Canada's much more strict laws regulating firearms "saves" about one life for every 100,000 people, although Canadian homicide offenders have adapted to the lack of firearms available to them by making murder more brutal.

U.S. vs Canada: Assault Edition

We find that there's an additional price to be paid for saving that one life for every 100,000 people with strict gun control laws. It turns out that after adjusting for the major demographic differences between the two nations, Canada is a much more violent place than is the U.S. (Ed. At least Canadians are polite, eh? Just don't cross them....)

U.S. vs Canada: Suicide Edition

Do Canada's stricter gun-control laws reduce the number of suicides per 100,000 people compared to the U.S.? We find the answer is not at all....

Update: Doc Palmer picks up on a report that indicates the U.S. is also much less violent than the U.K., Sweden, Belgium and Holland - all places that also feature much more restrictive gun laws than does the U.S....

Why There Are Only 12 Days of Christmas

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By now, you may be getting very tired of the Christmas carol equivalent of "The Wheels on the Bus Go Round and Round".

We're talking of course about "The Twelve Days of Christmas" song. You know, the one with "five goooooolden rings" and "a partridge in a pear tree".

What most people don't fully appreciate about the carol is just how much stuff is being doled out in the twelve days it spans. Not even PNC Wealth Management, the people who calculate the value of the gifts being given out on each day in the song each year, really get it.

You see, they treat the math as if only one gift is being given out on each of the 12 days, whether it be a single set of 10 lords-a-leaping on Day 10 or 3 French hens on Day 3. But here's the thing - if you pay close attention to the lyrics, many of the gifts are repeated on each subsequent day after being given out.

So instead of just one partridge in a pear tree, the recipient of all this true love would actually have 12 - one partridge in a pear tree for each day the song goes on. The "goooooolden rings" would be pretty cool to get, because you'd be getting 40 of them, which you could then equally divide among the 40 milking maids would would start arriving in batches of eight on Day 8.

Needless to say, this is a lot of stuff to keep track of, which is why we've created today's tool, which you can use to keep track of how many total items have been transferred as gifts through each day of Christmas. Just enter the day, and we'll tell you just how many items we're talking about....

Days of Christmas
Input Data	Values
What Day of Christmas Is It?

How Many Gifts Have Been Given to Your True Love?
Calculated Results	Values
Gifts Given on Entered Day of Christmas
Total Gifts Accumulated Through Entered Day of Christmas

And there you have it. Going back to the title of our post "Why Christmas Only Has 12 Days", we find that after 12 days, the gift recipient in the song has accumulated 364 items - enough for every other day of the year (except for leap years, but don't tell the 10 lords.)

You can get a visual sense of all the gifts given during these twelve days in the following image, which was the inspiration for today's post!

This is our final post for 2012 - we'll see you again in the new year. In the meantime, we'll leave you with the only tolerable version of "The Twelve Days of Christmas" that we could find:

Have a Merry Christmas!

WHAT FOOLS THESE POLITICIANS BE!

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Anonline article at NATIONAL JOURNAL dated Saturday told us, “Week five of the fiscal-cliff negotiationscame and went without any resolution”.
Todayis December 17^th.  The monthof December is more than half over. There are only two weeks left in the year.  And theidiots in Washington have not done a damned thing to avoid the serious problemsthat will result from the expired and expiring tax laws and the other issuesinvolved with the so-called “fiscal cliff”!
Ihave nothing but the utmost contempt for the idiots in Congress.  Thereis no legitimate excuse for their incompetence, inaction, and total disregardfor the American public.  Thesearseholes take our money, in the form of inflated paychecks and extensiveentitlements, and bitch and moan and bicker and blame and basically doabsolutely nothing but play with their private parts. 
Thelyrics from the musical 1776 echo in my ears – “Piddle, twiddle, and resolve. Not one damned thing do we {they}solve!”
Boththe Democrats and the Republicans, and their leaders (pictured above), areequally incompetent and equally to blame. 
Wehad the opportunity to throw many of the bums out this past November, but we(not me; my actions in the election booth, or rather in my case on the electiontable, reflected the concept of GRIP – Get Rid of Incumbent Politicians)re-elected most of them.  I suppose thethinking was the devil (incompetent idiot) we know is better than the devil(incompetent idiot) we don’t know.
Wehave all along assumed that these fools would eventually at least temporarily extend most of the already expired“extenders”, most important of which is the AMT patch, and the expiring “Bush”and other tax cuts for at least all but perhaps the “richest” taxpayers.  Well eventuallyis here!  
Whatwill happen if nothing is done?  The taxfiling season will not be able to start for most filers until March of 2013,seriously delaying refunds.  Thewithholding tables for 2013 will either be too little or too much, resulting ineither underwithholding or seriously reduced pay checks.  The federal income tax liability of justabout every American taxpayer will increase by potentially thousands of dollars(for the average middle class taxpayer too, and not just the “wealthy”).  And that is only the beginning.  Even if the problem is temporarily fixedretroactively in 2013 there will be delays, possible withholding FUs, and otherconsequences. 
Inshort, it will definitely not be a happy New Year!
Whatmore can I say? 
TTFN  

THIS AND THAT

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Hereelaborations on “stuff” that appeared in earlier posts.+ The“Last Word” of a recent BUZZ installment proposed a federal law.   Here isthe idea, slightly adjusted -  Let uspass a federal law that says (1) Taxlegislation CANNOT be temporary.  Exceptfor declared natural disasters or an official declaration of war, anylegislation that makes a change to the US Tax Code will automatically bepermanent, unless revised or repealed by specific subsequent legislation.And (2) Exceptfor declared natural disasters or an official declaration of war, any taxlegislation passed after September 30th cannot take effect until January 1st ofthe next year.Writteninto the legislation should be a requirement that a 2/3 majority of both housesof Congress would be needed to repeal or revise this law.Temporarytax law is not good tax policy (except perhaps for dealing with declarednatural disasters like KATRINA and SANDY). In the past the idiots in Congress have consistently extended the temporarytax breaks that become known as the “extenders”, often waiting until literallythe very last minute, and as a result causing problems and delays with the IRSprinting of forms and instructions and processing of returns, and confusingtaxpayers.The IRShad usually “gone to press” with tax forms, schedules and instructions for theyear in October.  Putting a September 30^thdeadline on making changes to the Tax Code in the current year will allow theIRS to return to this schedule.  It willalso make year-end tax planning much easier for individuals and businesses, asthey will know what will be in effect for the year during the last quarter andhave plenty of time to plan accordingly.+ Below isa recent comment on my post WHY WE NEED TAX REFORM by new tax blogger DavidFazio, EA -“You hit the nail squarely on the head: theCash for Clunkers program was a success because it kept the IRS out of theprocess. Taxpayers got their government discount (the equivalent of an IRS taxcredit) at the point of sale. They didn't have to wait up to a year to reap thebenefit. We have become a nation of deductionjunkies. Congress has tweaked the code so much that we start to feel that everydollar we spend should be deductible. We have special deductions/credits forteachers, adoption, child care, income earned outside the US, education,student loan interest and so on. Does a teacher with out-of-pocketexpenses deserve an above-the-line $250 deduction more than the schoolcafeteria worker who doesn't itemize and has $15 deducted out of her paycheckevery week for her uniform? Does the college graduate deserve a specialdeduction for his student loan interest when a Hurricane Sandy victim can'tdeduct interest on the credit card he's incurring while he's rebuilding hishome and waiting for the insurance check? Now no one said he taxcode was fair. But too many perks are being handed out via the 1040 that (asyou pointed out) are completely unnecessary.”Greatminds do think alike!  I havealways been confused by the $250 deduction for “educator expenses”.  The tax savings is $60-$70 for most educators.  Depending on where you live, this barelycovers the cost of a dinner out.  Andwhy, as David asks, were educators singled out. Are they more valuable than policemen, firemen, nurses, EMTs, or evenschool cafeteria workers, all of whom have “out of pocket” employee expenses?Therecipient of a special tax break, whatever it is, depends on either how muchthe recipient’s lobby pays the idiots in Congress to vote for it, or which special-interestgroup the idiots in Congress want to buy the votes of. David alsotalks about the student loan interest deduction, which is part of a group oftax benefits related to post-secondary education.  But, as I have said time and again, thisgroup should be replaced by direct “point of purchase” student financial aid.TTFN

WHAT'S NEW FOR NEW YORK STATE INCOME TAXES FOR 2012

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The2012 New York State income tax returns are now available online.
Thefirst thing I noticed is that Page 1 of the IT-201 and IT-203 resident andnon-resident income tax forms are expanded to include a detailed listing ofdependents. 
Theforms are still 4 pages, and the space for the dependent listing section ismade by eliminating the detail for itemized deductions previously on the bottomhalf of Page 2.  The itemized deductionschedule has been moved to new Forms IT-201-D and IT-203-D.  
Goodnews, at least for me.  Forms IT-2,IT-1099-R, and IT-1099-UI have been eliminated! I no longer have to waste my time filling in these stupid forms.  We now merely attach the state copy of theW-2 and appropriate 1099s with the filing of the return, like with the federaland other state filings, and like what used to be the case with NY state filings.  Thank God for small favors.  
Taxrates have been reduced for taxpayers with taxable incomes of over $40,000. andthe tax computation worksheets for taxpayers with New York adjusted grossincome of more than $100,000 are now based on filing status.
Taxpayersrequesting direct deposit are asked some additional information about the bank accountto which refunds are to be deposited, and taxpayers must now enter only whole dollaramounts on income tax forms (nothing major here – I have never used cents ontax returns, except for some dependent returns).
Thereare a couple of new tax credits for 2012, including a “Beer Production Credit”.  Too bad there is not a “Beer ConsumptionCredit”.
The2012 NJ returns are not yet available.  Iwill let you know when they are.

MY BEST TAX ADVICE

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 I am finishing up a new report on MY BEST TAX ADVICE. iT will be ready in early January.

This report will be “chock-a-block” with the best tax planning and advice I have accumulated from 40 years as a professional 1040 preparer, geared toward the average middle-class taxpayer.

While, as I said above, it will not be available until January, I am making a special “pre-publication” offer –

For all orders postmarked by December 31, 2012 the price for this report, delivered as an email “pdf” attachment, is only $3.95! And I will include as a special gift my compilation of Schedule A Forms, Schedules, and Worksheets (current price for this compilation = $3.00)!
The cost for this report will be at least $4.95 in 2013, and this price will NOT include the Schedule A forms package.
Mail your check or money order for $3.95 (payable to Taxes and Accounting, Inc) and your email address to -

MY BEST TAX ADVICE
TAXES AND ACCOUNTING, INC
POST OFFICE BOX A
HAWLEY PA 18428TTFN

Why Filing Taxes for Your Client, Even When They Aren't Required, Might Be a Good Thing!

To contact us Click HERE

Most all tax preparers understand how income levels and filing requirements are contingent upon filing status, age and the type of income clients receive. What is often overlooked, however, even when clients aren't required to file with Uncle Sam, is the fact that it may indeed advantage them to do so.

Not surprisingly, the Irs provides definitive instructions on the requirements for filing Forms 1040, 1040A, or 1040Ez. With all of the new prestige tax revisions and exceptions, some tax preparers are turning to Tax Cpe procedure materials or Ea Cpe curriculum to brush up on how these new revisions stand to advantage clients. Some continuing instruction tax courses are even focused exclusively on these new tax laws, showing tax preparers how to clients who fit into this scenario to get the greatest bang out of their tax returns.

Form 1040 Instructions

Quick Tips on Non-Required Filing Benefits

Why Filing Taxes for Your Client, Even When They Aren't Required, Might Be a Good Thing!

Homebuyer Credit

First time homebuyers are eligible for a maximum 00 or 00 if filing married status separately. To qualify, a someone must have entered into a compact on or before April 30th 2010 and have accomplished by September 30th 2010.

Tax Withheld

For taxpayers who have estimated their tax payments, had a former years overpayment, or had income tax withheld, they may be eligible for a refund.

Child Tax Credit

If a taxpayer has at least one child that qualifies and they didn't receive the full estimate of the current Child Tax prestige originally, they could get a refundable credit.

American occasion Credit

Given the newly renamed and vast Hope credit, taxpayers can claim this prestige for tuition and positive fees for undergraduate and post-secondary education. The maximum prestige per student is ,500.

Earned income Tax Credit

For those individuals who worked but earned dinky in 2010, this tax prestige may prove beneficial in considering to file because it may qualify them for a refund.

Health Coverage Tax Credit

This prestige is primarily for individuals who have received Adjustment aid (either Trade or Reemployment Trade). Further, those receiving Pbgc pension payments may also qualify and receive a credit.

Quick Tips of Non-Required Filing for Losses

Two Scenarios

When taxpayers have suffered an whole loss because of an speculation losses:

• Only if filed in 2010 can they carry that loss transmit and offset dutible capital gains in future years
• They can carry these losses as far back as 2008 and perhaps ask a reimbursement of carry forward, but, again, only if they filed in 2010.

When taxpayers have company losses that experienced a net operating loss (Nol) for 2010:
There are a plethora of resources ready that cover these details and the types of taxpayers that fall into this unique category. The key for enrolled agents, certified collective accounts and other tax professionals is to do the research, sign up for an enrolled agent class or look on the tax Cpe sites that showcase this information.

Irs Circular 230 Disclosure

Pursuant to the requirements of the Internal income aid Circular 230, we forewarn you that, to the extent any guidance relating to a Federal tax issue is contained in this communication, together with in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax connected penalties that may be imposed on you or any other someone under the Internal income Code, or (b) promoting, marketing or recommending to another someone any transaction or matter addressed in this communication.

Why Filing Taxes for Your Client, Even When They Aren't Required, Might Be a Good Thing!Is the IRS lying and defrauding the American people? Hear from the man who beat Video Clips. Duration : 45.58 Mins.

Robert Lawrence challenged the IRS claim that he is required to file a 1040 Income Tax Confession Form and pay a Federal Income Tax. The US Government charged him with committing “tax crimes”, but later dismissed these charges! The IRS dropped the case when they found out that Robert relied on the instructions within the IRS' 1040 booklet and the law. Robert had proof from these sources that he was not required to file. Hear how this living “David” won his victory over the paper-tiger “Goliath” (the IRS). Freedom Law School Speaker: Robert Lawrence Host: Peymon Mottahedeh
Keywords: googlevideo

Random Thoughts

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How do we know that the Fed pays attention to the things we write? Previously, commenting on the apparent lack of effect that the Fed's latest round of quantitative easing has had on stock prices, we observed:

1. The Fed is doing it wrong. In the two previous rounds of QE, the Fed purchased large quantities of U.S. Treasuries. So far in this round, the Fed is only purchasing Mortgage Backed Securities. The stock market just doesn't get the same bang for the buck as when the Fed buys up Treasuries, which acts to reduce long-term interest rates across a wider swath of the economy, which is really what helped boost stock prices in earlier rounds.
2. QE, as an effective policy, is running out of gas. The interest rates that the Fed might hope to lower in its QE programs started off at a much lower level, and a lot closer to their minimum zero level, than in its previous incarnations. With less room to maneuver, the Fed's actions just don't have the same oomph they once did.

And now, the Fed has announced that they've gotten the message and are going to start "doing it right" and also buy Treasury securities, which will give this latest generation of QE more "oomph". Interestingly, they've also announced the economic targets that must be satisfied before they will discontinue the plan. All together, that suggests to us that they're thinking the future for the economy in much of 2013 will be somewhat worse than other official sources are letting on....

It looks like that as far as the pace of layoffs in the U.S. is concerned, the impact of Hurricane Sandy lasted for just three weeks.

Assuming that the volatility we've previously noted dies down, we should have enough data to begin projecting the new trend in initial unemployment benefit claim filings within a few weeks.

Suppose we converted a house to run entirely off the grid on green, renewable energy sources like solar or wind, so that we would never again have to pay an electric bill or generate any carbon emissions for the power it consumes, as President Obama would seem to desire all Americans do. What possible environmental harm would we cause by lighting it with the soon-to-be-banned 100-watt incandescent bulbs, which we might note are far more friendly for the environment and are much less costly than their CFL replacements? And if the answer is "none", why must we have the government progressively ban all incandescent light bulbs from production?

On a development note, we can't help but notice that if we combined the site traffic our tools for determining individual, family and household income distribution percentile rankings, they would collectively represent the most popular tool ever on Political Calculations. So guess what will be coming soon!...

And speaking of coming soon, here's our Christmas countdown clock!

Air Shark!

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There we were, surfing the web for ideas of what to get a certain 9-year old boy for Christmas, when we stumbled into something that made us suddenly sit up and say "That is so cool!"

That something is the Air Swimmer Remote Control Inflatable Flying Shark. Here's a Youtube video of it in action:

We like it because it combines a boy's love of flying R/C vehicles with nature's perfect predator! And as an added bonus, it echoes some of the more fun scenes from the 2010 Doctor Who Christmas special, many of which were excerpted and remixed with appropriate music in the following video preview:

The real preview for the 2010 Doctor Who Christmas special is available here. The episode is simply brilliant, with one of the best twists ever in retelling Charles Dickens' classic Christmas Carol story. Very highly recommended!

And at the very least, we've also answered Mark Cuban's problem of what to get his fellow multi-millionaire venture investors on Shark Tank for Christmas this year!

GIT 'ER DONE!

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Itis almost December.  When dealing withthe potential “fiscal cliff”, now is not the time to consider long-termissues. 
Thefirst, and most important, thing to do ASAP is to extend the AMT patch throughthe end of 2012 (or, more better, through the end of 2013) so that theprocessing of 2012 tax returns and refunds are not delayed, and middle classtaxpayers are not hit with possible tax increases of between $3,000 and $4,000.
Thesecond thing to do is to extend all of the various tax benefits that willexpire on December 31, 2012, for one more year (through the end of 2013), andperhaps also the various popular “extenders” that expired on 12/31/11 alongwith the AMT patch (except for the 2% Social Security reduction).  The reason for doing this is so that we do notbegin 2013 with uncertainty concerning proper withholding.    
Thetime for considering serious long-term tax reform is January 2013, when the newCongress (which is really not that new) convenes.  This is when legislators should beconsidering whether to do away with or limit various tax loopholes andexpenditures, and whether to raise or lower tax rates – while there is almost afull year before any tax legislation must be passed (not that they should waituntil the last minute, as has become the custom).
Congresshas wasted away 2012, and must be made aware that their actions, or ratherinactions, have consequences.  They must putaside ridiculous partisan battling and consider the American people for achange.
TTFN 

DAMNED IF THEY DO AND DAMNED IF THEY DON'T

To contact us Click HERE

Itis December already and there is no progress in Washington on “taxmegeddon”.
If(or more likely when) BO and the idiots in Congress fail to act on the “fiscalcliff” issues before the end of 2012, what is the IRS going to do regardingwithholding tables for 2013?
Ifthe Service follows “current” law, federal income tax withholding will substantiallyincrease for many, if not most, employees, as the so-called “Bush tax cuts”will have expired on December 31, 2012, and everything will go back to pre-Bushrules.  If the idiots in Washingtoneventually pass retroactive extensions of the expiring breaks, the IRS willneed to revise the withholding tables, as will software companies, andwithholding will be totally FU-ed for an extended period of time, resulting inlower pay checks for almost all employees for a couple of months.
Ifthe Service assumes the idiots in Washington will eventually pass retroactiveextensions and does not change the federal withholding tables, keeping everythingthe same as 2012 or with some inflation adjustments, and the idiots inWashington do nothing, the IRS will need to revise the withholding tables, aswill software companies, and withholding will be totally FU-ed for an extendedperiod of time, resulting in many employees being under-withheld for the yearand owing tax when filing their 2013 returns.
Unfortunatelyit is we taxpayers, not the IRS or the idiots in Washington, who may be damnedif they do and damned if they don’t.
Wemust hope that whatever assumption the IRS uses to determine federal income taxwithholding effective January 1, 2013 turns out to be correct. 
TTFN 

Why Filing Taxes for Your Client, Even When They Aren't Required, Might Be a Good Thing!

To contact us Click HERE

Most all tax preparers understand how income levels and filing requirements are contingent upon filing status, age and the type of income clients receive. What is often overlooked, however, even when clients aren't required to file with Uncle Sam, is the fact that it may indeed advantage them to do so.

Not surprisingly, the Irs provides definitive instructions on the requirements for filing Forms 1040, 1040A, or 1040Ez. With all of the new prestige tax revisions and exceptions, some tax preparers are turning to Tax Cpe procedure materials or Ea Cpe curriculum to brush up on how these new revisions stand to advantage clients. Some continuing instruction tax courses are even focused exclusively on these new tax laws, showing tax preparers how to clients who fit into this scenario to get the greatest bang out of their tax returns.

Form 1040 Instructions

Quick Tips on Non-Required Filing Benefits

Why Filing Taxes for Your Client, Even When They Aren't Required, Might Be a Good Thing!

Homebuyer Credit

First time homebuyers are eligible for a maximum 00 or 00 if filing married status separately. To qualify, a someone must have entered into a compact on or before April 30th 2010 and have accomplished by September 30th 2010.

Tax Withheld

For taxpayers who have estimated their tax payments, had a former years overpayment, or had income tax withheld, they may be eligible for a refund.

Child Tax Credit

If a taxpayer has at least one child that qualifies and they didn't receive the full estimate of the current Child Tax prestige originally, they could get a refundable credit.

American occasion Credit

Given the newly renamed and vast Hope credit, taxpayers can claim this prestige for tuition and positive fees for undergraduate and post-secondary education. The maximum prestige per student is ,500.

Earned income Tax Credit

For those individuals who worked but earned dinky in 2010, this tax prestige may prove beneficial in considering to file because it may qualify them for a refund.

Health Coverage Tax Credit

This prestige is primarily for individuals who have received Adjustment aid (either Trade or Reemployment Trade). Further, those receiving Pbgc pension payments may also qualify and receive a credit.

Quick Tips of Non-Required Filing for Losses

Two Scenarios

When taxpayers have suffered an whole loss because of an speculation losses:

• Only if filed in 2010 can they carry that loss transmit and offset dutible capital gains in future years
• They can carry these losses as far back as 2008 and perhaps ask a reimbursement of carry forward, but, again, only if they filed in 2010.

When taxpayers have company losses that experienced a net operating loss (Nol) for 2010:
There are a plethora of resources ready that cover these details and the types of taxpayers that fall into this unique category. The key for enrolled agents, certified collective accounts and other tax professionals is to do the research, sign up for an enrolled agent class or look on the tax Cpe sites that showcase this information.

Irs Circular 230 Disclosure

Pursuant to the requirements of the Internal income aid Circular 230, we forewarn you that, to the extent any guidance relating to a Federal tax issue is contained in this communication, together with in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax connected penalties that may be imposed on you or any other someone under the Internal income Code, or (b) promoting, marketing or recommending to another someone any transaction or matter addressed in this communication.

Why Filing Taxes for Your Client, Even When They Aren't Required, Might Be a Good Thing!Is the IRS lying and defrauding the American people? Hear from the man who beat Video Clips. Duration : 45.58 Mins.

Robert Lawrence challenged the IRS claim that he is required to file a 1040 Income Tax Confession Form and pay a Federal Income Tax. The US Government charged him with committing “tax crimes”, but later dismissed these charges! The IRS dropped the case when they found out that Robert relied on the instructions within the IRS' 1040 booklet and the law. Robert had proof from these sources that he was not required to file. Hear how this living “David” won his victory over the paper-tiger “Goliath” (the IRS). Freedom Law School Speaker: Robert Lawrence Host: Peymon Mottahedeh
Keywords: googlevideo

DAMNED IF THEY DO AND DAMNED IF THEY DON'T

To contact us Click HERE

Itis December already and there is no progress in Washington on “taxmegeddon”.
If(or more likely when) BO and the idiots in Congress fail to act on the “fiscalcliff” issues before the end of 2012, what is the IRS going to do regardingwithholding tables for 2013?
Ifthe Service follows “current” law, federal income tax withholding will substantiallyincrease for many, if not most, employees, as the so-called “Bush tax cuts”will have expired on December 31, 2012, and everything will go back to pre-Bushrules.  If the idiots in Washingtoneventually pass retroactive extensions of the expiring breaks, the IRS willneed to revise the withholding tables, as will software companies, andwithholding will be totally FU-ed for an extended period of time, resulting inlower pay checks for almost all employees for a couple of months.
Ifthe Service assumes the idiots in Washington will eventually pass retroactiveextensions and does not change the federal withholding tables, keeping everythingthe same as 2012 or with some inflation adjustments, and the idiots inWashington do nothing, the IRS will need to revise the withholding tables, aswill software companies, and withholding will be totally FU-ed for an extendedperiod of time, resulting in many employees being under-withheld for the yearand owing tax when filing their 2013 returns.
Unfortunatelyit is we taxpayers, not the IRS or the idiots in Washington, who may be damnedif they do and damned if they don’t.
Wemust hope that whatever assumption the IRS uses to determine federal income taxwithholding effective January 1, 2013 turns out to be correct. 
TTFN