Archive for the ‘Taxes’ Category

According to a recent accountingweb article, many families are unaware of the many options available for funding higher education.

People are stumbling over the differences between grants and loans, secured vs. unsecured loans, and tax issues that accompany work-study programs, among other things.

While we are years away from worrying about college here at OffAssist, it never hurts to learn how it works, right?

The Virginia Society of Certified Public Accountants has a lot of great, free financial advice on their website. Recently they ran an article that is timely for most of us, how to shop for back-to-school without busting the budget. Check it out here.

One of their tips is to shop on your state’s tax free weekend, if your home state has one. Not sure? Check out this handy list of state sales tax holidays we tracked down.

Read all the skinny in the IRS newsroom, here.

The short and sweet? Mileage rates for business or moving/medical are each going up $0.08/mile, effective July 1st.

Charities?

Well, I’m thinking it’s obvious the government doesn’t give a fig about how people are giving less money in lean times and more time. And gee, wouldn’t it be nice to reward those people giving their time and using their own liquid gold gasoline to do it? Apparently not.

New business mileage rate is $0.585/mile; medical-moving will be $0.27/mile; charity, well, it’s still a chinchy $0.14/mile.

Even people getting paper checks are starting to see stimulus funds by now, and those with direct deposit have had theirs for a while.

Now, what do you do with it? Me, well, I stimulated the local economy by installing a new water heater since I discovered mine leaking a few days before the check came in. I think the water heater guy enjoyed it more than I did, but at least having the stimulus check (which, yes, I know full well I’ll be paying for next year!) made the unexpected home improvement sting a little less.

For those of you without a pressing need for home repairs, here’s a round up of articles on smart ways to spend–or not spend–your 2008 income tax refund advance

CPAs offer advice on how to spend tax refund at accountingweb.

Freemoneyfinance.com has a top ten list of tips here.

MySuperChargedLife’s awesome economic stimulus round-up can be found here.

Thinking about saving or investing your check instead? Check out the math in this post at My Two Dollars comparing your options.

Here are suggestions on HOW to invest it from Lazy Man & Money.

Then, of course, there are the inevitable scams related to the stimulus checks that you have to watch out for.

I first read about New York’s “Amazon Tax” in April, when it was still waiting to become law. Now that it has, the online retail giant is fighting back.

Check out the first article at Gizmodo. It’s old enough now that it has TONS of interesting reader comments, too.

Then check out the update at Ars Technica.

This is a bad, bad thing. As a service professional providing intangible intellectual property (writing and editing) most of what I do is not subject to Texas sales tax. If I have to worry about New York (or any other state) wanting me to collect taxes on their behalf, well, it’d be bad. Numbers are already not my forte and you’re going to make me keep track of MORE?!?

*sigh*

Just to satisfy my inner conspiracy theorist, does anyone know if there are any major small business accounting software firms based in New York? I am sure widespread adoption of this type of law would be a boon to them!

PS -

Did everyone else out there know that you are supposed to report online purchases to the IRS on your taxes? Dude! Turbo Tax so does not have that in their taxes-for-the-befuddled questionnaire!

Okay, I confess. A lot of this goes beyond my ability to understand since while I am a virtual assistant, I don’t interact in any of the big virtual worlds.

I tried Second Life and, well, it was slow and kinda boring–if I want a virtual life that can be as tedious as the real thing I’ll play the Sims I don’t play any MMORPGs, and, even during the brief period when I did, I would never dream of spending real money on virtual stuff, beyond the monthly game fee.

Instead, I refer you to this spiffy physorg.com article about taxing profits made in virtual worlds. From what I can see, it is mostly aimed at Second Life, since most of the money in the MMORPGs goes to offshore “gold farmers”, but what do I know?

As long as they stick to gaming, we’re good. I am a little leery of the implications of taxing virtual activity since, well, I both work and get paid virtually. I pay income tax and self-employment tax, if they add another tax, well, that would be bad.

Really.

It seems like last Spring all I did was post endless rounds of updates and Q&As; for the stupid telephone tax deduction.

Now it’s the “economic stimulus payment”. Wonder what new stupid thing the IRS will throw at Americans next year?

If you are one of the many people confused by the economic stimulus payment, there’s a great article at accountingweb.com that helps clear things up.

For those of you who just want the gist, here it is:

• Everyone with a social security number if eligible for the stimulus payments, whether they normally file a tax return or not.
• For those who normally do not file a tax return, the IRS has created an expedited method to get them in the system so they can receive their payments.

• This is not a rebate or refund. It is Advanced Payment of a taxpayer’s estimated 2008 refund.
• This means that when you file your 2008 taxes in 2009, if the rebate amount is, say, $2000 and your economic stimulus payment was $1200, the actual rebate you will get next year will only be $800, or the difference between your rebate and the advanced rebate you already received.
• On the other side, if your 2008 taxes show that you owe money, or your refund is less than the amount of the payment you receive this year, you don’t have to pay back the difference.
• This is not taxable income. You will not have to claim it as such, though I am sure there will be extra hoops to jump through next year because of it.
• If you haven’t filed your taxes, you can’t get a stimulus payment.
• If you had your 2007 tax refund direct deposited in more than one account, you will have to wait for a check, which will be issued after the direct deposits, beginning in mid-May.

Those are the high points. More details are available at accountingweb, and at the IRS page I listed last week.

Honestly, what a pain!

I don’t the “Fair Tax” is a workable solution, but I loved the Flat Tax notion and wish someone would revive it. If only so I don’t have to post about the IRS so much every Spring!

Well, the IRS says it will be on its way beginning May 2nd–that’s when the first of the ‘economic stimulus’ (can you tell what I think of this idea?) payments are scheduled to go out the taxpaying public.

For more details on pre-bate schedules and amounts, check out the fast & dirty version on accountingweb. For that level of excruciating detail only the government can achieve, check out the IRS page on the 2008 economic stimulus payments.

If you just want to know when to expect your check, you can find the IRS online calculator here.

The IRS spent $42 million mailing out letters telling people about this year’s economic stimulus payments (the so-called “pre-bates”) they’ll be sending out later this year.

So, in addition to sending out all kinds of bank later this year that this country doesn’t have and with the government operating so far in the red that they can’t remember what black ink on the books looked like, they spent 42 million EXTRA dollars to mail people letters that are basically just to remind them to file taxes.

And that doesn’t even touch on the cost of the next big packet mailing. Or the cost of actually mailing physical checks to taxpayers throughout the nation. More details about how I’m the only one outraged at how the IRS wastes money here.

In all fairness to the IRS, my husband, who knows all about the primary problems in Florida and Michigan, had no idea that the IRS was giving away money later this year until I mentioned it last night. But then, he doesn’t work for Candy… lol.

The US Small Business Administration’s Office of Advocacy has announced their top ten issues to work on for 2008, as part of r3 initiative. The r3 initiative takes nominations from small businesses and puts together a top ten list of issues to act on during the year to help small businesses. r3 stands for Regulatory Review and Reform.

The SBA forwards the list to the agencies in charge of each issue, posts the list on their website, and posts updates to the issues twice a year.

This is not the same as the IRS initiative we mentioned back in August. For more details, check out the accoutingweb article, or go straight to the list on the SBA website.

The one most interesting to OffAssist is the request for a standardized home office deduction. I know that I don’t claim the home office deduction because the rules are draconian and the tax complications if we ever sell our house make it more trouble than it is worth. A simpler system would be great!