Don't Mess With Taxestag:typepad.com,2003:weblog-2521192013-05-22T17:06:16-05:00Translating taxes into money-saving English. Texas journalist Kay Bell helps make your tax tasks less, well, taxing.TypePadThis is an XML content feed. It is intended to be viewed in a newsreader or syndicated to another site, subject to copyright and fair use.Tax considerations of combining business, personal traveltag:typepad.com,2003:post-6a00d8345157c669e20191026c606f970c2013-05-22T17:06:16-05:002013-05-22T17:06:16-05:00It's been one of those days -- don't ask, or I'll never stop! -- so I'm really looking forward to the upcoming Memorial Day break. The hubby and I aren't going anywhere, but a lot of folks are hitting the road or boarding planes, trains or buses on this traditional beginning of the summer vacation season. Vacation is the operative word here. When any of us take a pleasure trip, it's totally on our dime. But if you sometimes combine business and personal travel, your Uncle Sam could help cover some of your on-the-road costs. Of course, you must be careful in claiming business expenses when you piggyback a bit of personal time onto the trip. Just how to do this and what to watch out for is the topic of today's Weekly Tax Tip. The key to getting travel help from the tax code is to make sure that your main reason for travel is work. That way those...skbell1
It's been one of those days -- don't ask, or I'll never stop! -- so I'm really looking forward to the upcoming Memorial Day break.
The hubby and I aren't going anywhere, but a lot of folks are hitting the road or boarding planes, trains or buses on this traditional beginning of the summer vacation season.
Vacation is the operative word here. When any of us take a pleasure trip, it's totally on our dime.
But if you sometimes combine business and personal travel, your Uncle Sam could help cover some of your on-the-road costs.
Of course, you must be careful in claiming business expenses when you piggyback a bit of personal time onto the trip. Just how to do this and what to watch out for is the topic of today's Weekly Tax Tip.
The key to getting travel help from the tax code is to make sure that your main reason for travel is work. That way those legitimate expenses, including transportation and lodging and some meals, can be deducted.
Then when you stay a day or two to see the sights, you only have to cover those personal costs out of your own pocket.
So carefully track your trip, detailing the separate business and personal expenses. Good documentation will help you substantiate your legitimate business travel claims just in case an Internal Revenue Service auditor ever has questions.
Now get packing.
And be sure to enjoy a little help from the tax code the next time a trip is for both business and fun!
http://dontmesswithtaxes.typepad.com/dont_mess_with_taxes/2013/05/tax-considerations-of-combining-business-personal-travel.htmlLois Lerner, IRS tax-exempt office chief, takes the Fifth before House committee: 'I have not done anything wrong'tag:typepad.com,2003:post-6a00d8345157c669e201910269ff89970c2013-05-22T14:34:26-05:002013-05-22T14:56:30-05:00The Internal Revenue Service executive whose apology blew the investigation into the agency's improper use of screening criteria for tax-exempt applications had a chance to explain things today. Instead, Lois Lerner invoked her Fifth Amendment right against giving self-incriminating testimony. Lois Lerner, reading her opening statement to the House Oversight committee. Lerner, Director of Exempt Organizations, was scheduled to testify today before the House Oversight and Government Reform Committee on what she knew about IRS employees in the Cincinnati field office using terms such as Tea Party in pulling applications for closer review. People both inside and outside the beltway have questions as to what Lerner knew about the process and when she knew it. Some lawmakers on both sides of the aisle have called for her to resign. No doubt the Department of Justice investigation into the IRS matter was a key reason Lerner refused to testify. Some also speculate that Lerner's decision also was influenced by House Speaker...skbell1
The Internal Revenue Service executive whose apology blew the investigation into the agency's improper use of screening criteria for tax-exempt applications had a chance to explain things today.
Lois Lerner, reading her opening statement to the House Oversight committee.
Lerner, Director of Exempt Organizations, was scheduled to testify today before the House Oversight and Government Reform Committee on what she knew about IRS employees in the Cincinnati field office using terms such as Tea Party in pulling applications for closer review.
People both inside and outside the beltway have questions as to what Lerner knew about the process and when she knew it. Some lawmakers on both sides of the aisle have called for
her to resign.
No doubt the Department of Justice investigation into the IRS matter was a key reason Lerner refused to testify.
Some also speculate that Lerner's decision also was influenced by House Speaker John Boehner's statement last week that he wanted to know "who's going to jail" over the bungled review process.
Comment, but no questions: So Lerner decided that, at least for now, it's in her best interests to keep her mouth shut.
But she also knows she's taking a public perception risk. She told the panel:
"My professional career has been devoted to fulfilling the responsibilities of the agencies for which I've worked and I am very proud of the work I have done in government. … Members of this committee have accused me of providing offering false information when I responded to questions about the IRS processing of applications for tax exemption.
I have not done anything wrong. I have not broken any laws. I have not violated any IRS rules or regulations. And I have not provided false information to this or any other congressional committee.
And while I very much would like to answer the committee's questions today, I've been advised by my counsel to assert my constitutional right not to testify or answer questions on the subject matter of this hearing. After very careful consideration, I have decided to follow my counsel's advice and not testify or answer any of the questions today.
Because I'm asserting my right not to testify , I know that some people will assume that I have done something wrong. I have not."
Surprised, unhappy committee members: Her remarks immediately ticked off the panel.
Rep. Trey Gowdy (R-S.C.) objected to Oversight Chairman Rep. Darrell Issa (D-Calif.) excusing Lerner, arguing that the committee should operate like a courtroom and by making an opening statement, Lerner waived her Fifth Amendment right.
"You don’t get to tell your side of the story and not be subjected to
cross examination," said an agitated Gowdy. "That's not the way it works."
Ah, but it is the way it works. Committee hearings, while providing members of Congress with many powers, are not courtrooms.
However, other courthouse terms and practices were invoked.
Issa mentioned the possibility of Lerner testifying if she is granted some form of immunity before eventually releasing her subject to recall before the committee.
Committee members also used the time-tested trial technique of phrasing a point, in this cas a political supposition, as a question that is essentially unanswerable by the witnesses.
And time conveniently ran out in several instances just when a rousing point was made.
Gone but not forgotten: Although Lerner wasn't in the hearing room, her name and role in the screening of Tea Party and other conservative groups' tax exempt applications was cited frequently by panel members in their questions to the remaining witness.
Those witnesses were Treasury Inspector General for Tax Administration J. Russell George, former IRS Commissioner Douglas Shulman and Deputy Treasury Secretary Neal S. Wolin.
Wolin and new IRS Acting Commissioner Daniel Werfel likely will be back before this panel in the coming weeks to discuss progress made in changing the way applications for 501(c)(4) tax-exempt status are processed.
And I suspect Lerner will get an, uh, invitation to give her side of the story then, too. We'll see if circumstances have changed to a degree that she'll accept.
http://dontmesswithtaxes.typepad.com/dont_mess_with_taxes/2013/05/lois-lerner-irs-tax-exempt-office-chief-take-the-fifth-before-house-committee-i-have-not-done-anythi.htmlTornado-ravaged areas of Oklahoma declared major disasters, leading to special tax relief from IRStag:typepad.com,2003:post-6a00d8345157c669e201901c6d7039970b2013-05-21T16:57:54-05:002013-05-21T19:10:28-05:00The tornado that plowed through Moore, Okla., Monday afternoon now rivals the one that hit in the same area on May 3, 1999. The National Weather Service, after its personnel surveyed the damage, has classified the May 20, 2013, twister as a category 5 on the Enhanced Fujita scale. Click for larger view of the two EF5 tornadoes that hit Moore, Okla., 14 years apart. Image courtesy Norman, Okla., National Weather Service office. You also can see the paths of the 1999, 2013 and May 8, 2003, twisters that all touched down in the same area at KFOR-TV NewsChannel 4's interactive map. President Obama didn't need the official rating to make his call. As the meteorologists were joining disaster recovery volunteers in the Sooner State, the president was declaring five Oklahoma counties -- Cleveland, Lincoln, McClain, Oklahoma and Pottawatomie -- as major disaster areas. That designation means that affected residents have the option to file an amended tax return for...skbell1
President Obama didn't need the official rating to make his call. As the meteorologists were joining disaster recovery volunteers in the Sooner State, the president was declaring five Oklahoma counties -- Cleveland, Lincoln, McClain, Oklahoma and Pottawatomie -- as major disaster areas.
That designation means that affected residents have the option to file an amended tax return for 2012 if changes to that return could get them tax money they can use now to make repairs and get their lives somewhat back on track.
The Internal Revenue Service also announced this afternoon that taxpayers in those counties also are eligible for additional tax relief.
The IRS is postponing various tax filing and payment deadlines that
occurred on Saturday, May 18, the day that the deadly tornado outbreak began.
Individual, business tax relief: Affected individuals and
businesses now have until Sept. 30 to file returns and pay
any taxes due.
This includes the June 17 and Sept. 16 estimated tax deadlines.
A variety of business tax deadlines also are
covered, including the July 31 deadline for second quarter payroll
and excise tax returns and the Sept. 3 deadline for truckers filing
highway use tax returns.
The IRS will abate any interest, late-payment or late-filing penalty
that would otherwise apply to these filings and payments.
In addition, the IRS is waiving failure-to-deposit penalties for federal
payroll and excise tax deposits normally due on or after May 18 and
before June 3 if the deposits are made by June 3, 2013.
Because the IRS automatically provides the announced relief to any taxpayer located in the disaster area, affected taxpayers don't need to do anything special.
Some outsiders included, too: The IRS noted that other locations may be added in coming days based on additional damage assessments by FEMA.
But for now if you don't live in one of the major disaster areas but you also need tax relief because of the storms, the IRS says it will work with you. This includes folks whose books, records or tax professionals are located in the areas affected by these storms.
In addition, all relief workers who are in Oklahoma helping out as part of a recognized government or philanthropic organization are eligible for this special tax relief.
Volunteers and other affected taxpayers who qualify for the special tax treatment and who live outside the disaster area need to contact the IRS toll-free at (866) 562-5227.
More disaster relief info: Among the relief available to Oklahoma tornado survivors are grants for temporary housing and home repairs, low-cost loans to
cover uninsured property losses and other programs to help individuals
and business owners recover from the effects of the disaster.
Federal
funding also is available to state, tribal, and eligible local
governments and certain private nonprofit organizations on a
cost-sharing basis for emergency work in the disaster area counties.
http://dontmesswithtaxes.typepad.com/dont_mess_with_taxes/2013/05/tornado-ravaged-areas-of-oklahoma-declared-major-disasters-leading-to-special-tax-relief-from-irs.htmlHelping Oklahoma tornado survivors, planning for the next natural disastertag:typepad.com,2003:post-6a00d8345157c669e20192aa29de07970d2013-05-21T12:18:00-05:002013-05-21T17:52:19-05:00It is that horrid time of year. Instead of enjoying the return of welcome warm weather, we're watching the tragic aftermath of Mother Nature's fury. As everyone knows by now, what will likely turn out to be the second category F5 tornado in 14 years devastated Moore, Okla., a suburb of Oklahoma City, on Monday, May 20, afternoon. Visit NBCNews.com for breaking news, world news, and news about the economy But while Moore residents took the hardest hit, that city isn't the only one that must rebuild. Over the last four days, more than 50 tornadoes have been reported in Oklahoma, Kansas and into the Midwest. People are bracing for additional outbreaks today. And on Sunday, May 19, afternoon, 35 miles southeast of Oklahoma City a deadly twister roared through Shawnee, Okla. Now we're dealing with the tornadoes' tragedies. People have died. Many more have lost their homes and businesses. They've got to start over. Ready and wanting to help:...skbell1
It is that horrid time of year. Instead of enjoying the return of welcome warm weather, we're watching the tragic aftermath of Mother Nature's fury.
As everyone knows by now, what will likely turn out to be the second category F5 tornado in 14 years devastated Moore, Okla., a suburb of Oklahoma City, on Monday, May 20, afternoon.
And on Sunday, May 19, afternoon, 35 miles southeast of Oklahoma City a deadly twister roared through Shawnee, Okla.
Now we're dealing with the tornadoes' tragedies. People have died. Many more have lost their homes and businesses. They've got to start over.
Ready and wanting to help: As neighbors -- and I'm not just talking about us Texans or Kansans or Arkansans or Missourians who've also seen our share of deadly twisters, but all Americans -- we naturally want to help in any way possible.
A friend commented that she just wanted to get in her car and drive up there to do what she could. That's a laudable sentiment, but don't. They have officials and volunteer groups who, sadly, are very experienced in dealing with the physical devastation of deadly storms.
Also, don't send clothing. While way too many folks have only the clothes they were wearing when the tornadoes hit, most charities' disaster operations are not equipped to store and distribute clothing and other household goods.
Instead, donate money to a charity that will get the help to the folks who need it. Your cash will allow on-the-ground volunteers to buy supplies,
materials, fuel for emergency vehicles and food.
Many charities from which to choose: The two largest national charities, American Red Cross and Salvation Army, have specific funds for disasters.
You can contribute at:
The groups' websites by clicking the links above.
By calling the charities.
Red Cross can be reached at 1-800-RED CROSS (1-800-733-2767) or 1-800-257-7575 for Spanish speakers or the TDD line for hearing impaired at 1-800-220-4095.
The Salvation Army's phone number is 1-800-SAL-ARMY (1-800-725-2769).
By texting to make a $10 donation. For a Red Cross donation, text REDCROSS to 90999. To donate to the Salvation Army text STORM to 80888.
On a more local basis, the United Way of Central Oklahoma is accepting online donations. If you prefer to send a check, make it payable to United Way of Central Oklahoma and mail it to P.O. Box 837, Oklahoma City, OK 73101 with the notation "May Tornado Relief."
Make sure your home and auto insurance coverage is adequate and up to date.
Double check what your medical policy covers in case, God forbid, you're injured in a disaster.
Have a credit card with a decent balance available to cover post-disaster costs.
Gather key financial documents to take with you if you must evacuate. This includes not only the previously mentioned insurance info, but also your other important financial documents, such as investment and bank account statements
Take an inventory of your home, both the items inside and your surrounding property, in case you have to file claims for disaster damage.
Tax help after a disaster: And, of course, your financial documents should include copies of your tax records.
All of our preparations, however, are no safeguard when an actual disaster looms. So most importantly, listen to public safety officials and if they say get out, get out!
Tax deduction for gifts: Finally, although it's far from being at the top of anyone's mind right now, I must remind you that if you do donate to a charity to help victims of the rash of tornadoes, your gift could be deducted on your tax return if you itemize.
I know that's not why anyone is giving today. But it might be worth considering at a calmer time, like when you're doing your taxes next year.
http://dontmesswithtaxes.typepad.com/dont_mess_with_taxes/2013/05/helping-oklahoma-tornado-survivors-planning-for-the-next-disaster.htmlHouse and Senate committee hearings on IRS screening of Tea Party tax-exempt applications set for May 21 & 22tag:typepad.com,2003:post-6a00d8345157c669e2019102423d7d970c2013-05-20T12:49:00-05:002013-05-20T18:04:02-05:00Clear your calendars tax wonks and scandal mongers. Two more Congressional hearings are scheduled this week to make political points look into how the Internal Revenue Service dealt with Tea Party groups' applications for tax-exempt status. Representatives got the first formal whack at the IRS on Friday, May 17, when the full House Ways and Means panel grilled outgoing (aka fired) Acting IRS Commissioner Steven Miller. The tax-writing panelists also had a few questions for J. Russell George, Treasury Inspector General for Tax Administration. At issue is whether the IRS improperly targeted conservative groups when reviewing their requests for a controversial tax status. At the time in question, groups that had already been designated by the IRS as 501(c)(4) organizations, such as Karl Rove's Crossroads GPS, were under fire outside of the agency for what some saw as violations of the tax rule that they don't participate in political activities. Tomorrow, the questions about the IRS process of granting this...skbell1
Clear your calendars tax wonks and scandal mongers. Two more Congressional hearings are scheduled this week to make political points look into how the Internal Revenue Service dealt with Tea Party groups' applications for tax-exempt status.
Representatives got the first formal whack at the IRS on Friday, May 17, when the full House Ways and Means panel grilled outgoing (aka fired) Acting IRS Commissioner Steven Miller. The tax-writing panelists also had a few questions for J. Russell George, Treasury Inspector General for Tax Administration.
At issue is whether the IRS improperly targeted conservative groups when reviewing their requests for a controversial tax status. At the time in question, groups that had already been designated by the IRS as 501(c)(4) organizations, such as Karl Rove's Crossroads GPS, were under fire outside of the agency for what some saw as violations of the tax rule that they don't participate in political activities.
Tomorrow, the questions about the IRS process of granting this tax-exempt status will be asked by Senators.
Miller and George will reprise their earlier House appearances.
Douglas Shulman, who was IRS Commissioner while the over-zealous inquiry was underway, also will testify.
If you can't make the session being held in 215 Dirksen Senate Office Building, it will be broadcast on C-SPAN and streamed at the Finance Committee's website.
Back to the House: IRS witnesses then will bounce back to the House side of Capitol Hill.
The House Oversight and Government Reform Committee, led by Rep. Darrell Issa (R-Calif.), will hear from four witnesses beginning at 9:30 a.m. Eastern time Wednesday, May 22.
The hardest working man in the IRS investigation, TIGTA's George, will make his third official appearance before Congressional questioners on Wednesday.
Shulman also will testify again, making his first appearance on this issue on the House side.
New witnesses include Neal S. Wolin, Deputy Secretary at the Department of the Treasury, and Lois Lerner, Director of Exempt Organizations at the IRS.
Focus on first apologist: The questioning of Lerner (pictured at right) will be of particular interest. She brought the IRS tax-exempt review process to the wider public view on May 10 when, while speaking at an American Bar Association event, she apologized for the agency's actions.
While the questionable review process already was under TIGTA scrutiny and known to some in the IRS -- just who in the agency and when they knew are key questions, as is interest in the timing of White House knowledge of the situation -- Lerner's remarks basically kicked off the so-called IRS scandal.
Lerner's comments about the Tea Party targeting also raised more eyebrows when it was revealed that the IRS executive had planted the question.
Many members of Congress, including the ranking Democrat on the House Ways and Means Committee, have called on Lerner to resign. You can bet that during Wednesday's hearing Lerner will be asked, among other things, why she's still on the job.
If you're in the Washington, D.C., area, the Oversight Committee's hearing will be held in Room 2154 of the Rayburn House Office Building. If you can't make it, the hearing will be broadcast on C-SPAN and streamed live at the committee's website.
http://dontmesswithtaxes.typepad.com/dont_mess_with_taxes/2013/05/congressional-hearings-irs-tea-party-may-21-and-may-22.htmlEnjoy the song stylings of Steve Miller, the singer, not tax guy tag:typepad.com,2003:post-6a00d8345157c669e2017eeb49b309970d2013-05-19T18:35:19-05:002013-05-19T18:34:16-05:00Admit it. For the last week or so, the song "Take the Money and Run" has been playing continuously in your head. That musical inclination is natural if you grew up listening to tunes on the radio in the '70s, are a Texan, or both (guilty!) because the recently sacked acting Internal Revenue Service commissioner shares the same name as a popular Lone Star State band. But I've had friends from elsewhere in the country mention that the same thing has been happening to them. Steve Miller in the news: This actually started back in November 2012. That's when a career IRS guy named Steven Miller was tapped to temporarily helm the IRS after Douglas Shulman resigned. All of us fans of the Steve Miller Band got a chuckle over the shared name. Then when Steve Miller the IRS guy was fired, songs by Steve Miller the Texas musician came back to mind in full force. "Take the Money and...skbell1
Admit it. For the last week or so, the song "Take the Money and Run" has been playing continuously in your head.
That musical inclination is natural if you grew up listening to tunes
on the radio in the '70s, are a Texan, or both (guilty!) because the
recently sacked acting Internal Revenue Service commissioner shares the
same name as a popular Lone Star State band.
But I've had friends from elsewhere in the country mention that the same thing has been happening to them.
Steve Miller in the news: This actually started back in November 2012.
"Take the Money and Run" is at the top of the playlist because it even mentions taxes:
Billy Mack is a detective down in Texas. You know he knows just exactly what the facts is. He ain't gonna let those two escape justice. He makes his livin' off of the people's taxes.
If you're interested in adding some Steve Miller, the band not the soon-to-be-ex IRS employee, songs to your iPod, let me suggest:
Take the Money and Run
The Joker
Fly Like an Eagle
Rock 'n Me
Jet Airliner
Swing Town
Jungle Love
Space Cowboy
And if you want to catch Steve and his latest band incarnation in person, they're now on tour. Great timing guys!
http://dontmesswithtaxes.typepad.com/dont_mess_with_taxes/2013/05/enjoy-the-song-stylings-of-steve-miller-the-singer-not-tax-guy-.htmlAll IRS all the time, at least last week at my other tax blogtag:typepad.com,2003:post-6a00d8345157c669e201901c5b19b2970b2013-05-19T16:10:12-05:002013-05-19T16:10:02-05:00I write and blog about taxes, so it's no big surprise that some of those pieces focus on the Internal Revenue Service. And given all that's going on right now in connection with the IRS, it's also no big surprise that the federal tax agency was the topic of three posts last week at my other tax blog. That's right, instead of the ususal Tuesday and Thursday items, I took a look on last Monday at the fallout from the IRS focus on Tea Party groups that applied for tax-exempt status. The next day was a reminder that IRS furloughs start on Friday, May 24. And then I closed out the week over at Bankrate's Taxes Blog with a wrap-up of the IRS under siege. If you happen to miss my posts over there during the week, you can find a summary (and links) here the following weekend. You also might find these items of interest: IRS investigation is the...skbell1
I write and blog about taxes, so it's no big surprise that some of those pieces focus on the Internal Revenue Service.
And given all that's going on right now in connection with the IRS, it's also
no big surprise that the federal tax agency was the topic of three posts last week at my other tax blog.
http://dontmesswithtaxes.typepad.com/dont_mess_with_taxes/2013/05/all-irs-all-the-time-at-least-last-week-at-my-other-tax-blog.htmlThere's a new Powerball multimillionaire. Winner, IRS rejoicetag:typepad.com,2003:post-6a00d8345157c669e201901c59e757970b2013-05-19T13:17:00-05:002013-05-19T23:58:22-05:00One Powerball ticket for last night's $590.5 million lottery jackpot was sold at a grocery story in Zephyrhills, Fla. The winning numbers were 10, 13, 14, 22, 52 and the Powerball 11. Yes, that's a little less than earlier estimates of the ultimate payout. But the final tally is still enough to make last night's jackpot the largest in Powerball history. The game's previous largest jackpot was $587.5 million won Nov. 28, 2012. The lottery multimillionaire now must decide whether to take his or her new fortune in 30 year payouts or in one lump sum of almost $371 million. If the winner followers the usual pattern, Powerball officials soon will be writing a big check for $370,896,780.54. Taxes off the top, later: Of course, the winner will see a big chunk of change come out of that payout immediately thanks to the withholding that lottery officials must calculate and send to Uncle Sam. That tax withholding rate is 25...skbell1
One Powerball ticket for last night's $590.5 million lottery jackpot was sold at a grocery story in Zephyrhills, Fla.
The winning numbers were 10, 13, 14, 22, 52 and the Powerball 11.
Yes, that's a little less than earlier estimates of the ultimate payout. But the final tally is still enough to make last night's jackpot the largest in Powerball history. The game's previous largest jackpot was $587.5 million won Nov. 28, 2012.
The lottery multimillionaire now must decide whether to take his or her new fortune in 30 year payouts or in one lump sum of almost $371 million.
If the winner followers the usual pattern, Powerball officials soon will be writing a big check for $370,896,780.54.
Taxes off the top, later: Of course, the winner will see a big chunk of change come out of that payout immediately thanks to the withholding that lottery officials must calculate and send to Uncle Sam.
That tax withholding rate is 25 percent.
So the $371 million is reduced by almost $93 million. If my handheld calculator is correct, the precise withholding amount is $92,724,192. That amount also is this week's By the Numbers figure.
The winner then must do the math again in April, adding in other taxable income and subtracting deductions, to compute the additional tax due the U.S. Treasury based on the winner's eventual tax bracket. Remember, the top tax rate now is 39.6 percent on taxable income of more than $400,000 for single filers.
A head-of-household taxpayer can make up to $425,000 before hitting that top tax rate. Married couples filing jointing don't owe taxes at the top rate until they make more than $450,000.
And don't forget, the 3.8 percent Medicare tax on investment earnings comes into play for folks with gross incomes of $200,000 or more or married couples filing jointly with combined gross incomes of $250,000 or more.
State taxes, too: The one bit of good tax news for the Powerball jackpot winner is that if the new multimillionaire is indeed a resident of Florida and not just a tourist who bought the ticket while vacationing, is that he or she won't have to worry about state taxes.
Florida doesn't have an income tax.
In case you're wondering, Alaska, Nevada, South Dakota, Texas, Washington and Wyoming join the Sunshine State in not collecting an income tax. New Hampshire and Tennessee don't tax wages, but do collect a tax on investment earnings.
More than one winner: While the Internal Revenue Service obviously is very happy about the Powerball payout (and the agency really needs something positive given the attention it got last week), Uncle Sam and other tax collectors have millions more reasons to smile.
Powerball's website reports that in addition to the one jackpot winner Saturday, another 7,598,546 lottery players won prizes totaling more than $84 million.
Two tickets are worth $1 million each to the owners in New York and South Carolina.
Those lucky lottery players join a lot of other smaller prize winners who live in states that do collect taxes on income that includes prize winnings.
Starting over: Now I'm not encouraging gambling. I know it's a costly compulsion for many folks and can wreck finances and lives.
But if like the hubby and me you just occasionally play the lottery and want to possibly join the fraternity of winners, the Powerball jackpot resets at $40 million for Wednesday's drawing.
Relative to May 18 payout, it's a pittance. But I wouldn't turn it down, even with the accompanying tax bill.
http://dontmesswithtaxes.typepad.com/dont_mess_with_taxes/2013/05/theres-a-new-powerball-multimillionaire-ticket-owner-irs-rejoice.htmlAnother big betting day as Powerball and Preakness converge … and don't forget, winners, about the taxes!tag:typepad.com,2003:post-6a00d8345157c669e2019102475c6a970c2013-05-18T12:56:44-05:002013-05-18T12:56:44-05:00Here we are again. Eight weeks after gamblers were having a field day putting money on a big Powerball jackpot and March Madness college basketball games, we're back at another gambling convergence. Today we have another huge Powerball amount up for grabs -- at $600 million as I type and growing -- and the Preakness. The possible Powerball winnings could pass the all-time U.S. jackpot amount of $656 million that was paid out as a Mega Millions prize, split three ways, in March. If there is a Powerball winner tonight, the current jackpot's lump sum would be $376.9 million. As the amount increases, so does the amount available to the ultimate winner. And remember, you'll owe taxes on that lump sum. As I've said many, many, many times before, I'll happily hand over Uncle Sam his share. So send your good thoughts the hubby's way, as he is charged with getting us a winning ticket! Since Texas is a community...skbell1
Here we are again.
Eight weeks after gamblers were having a field day putting money on a big Powerball jackpot and March Madness college basketball games, we're back at another gambling convergence.
Today we have another huge Powerball amount up for grabs -- at $600 million as I type and growing -- and the Preakness.
If there is a Powerball winner tonight, the current jackpot's lump sum would be $376.9 million. As the amount increases, so does the amount available to the ultimate winner.
And remember, you'll owe taxes on that lump sum.
As I've said many, many, many times before, I'll happily hand over Uncle Sam his share. So send your good thoughts the hubby's way, as he is charged with getting us a winning ticket!
Since Texas is a community property state, even though he's buying the Powerball slip, we'll get to share it equally. That's fine with me.
But we get a break on another consideration. Because there is no state income tax here in Texas, we won't have to worry about that tax bill.
Click on image for a look at today's Preakness lineup.
Winning bettors on the second leg of horse racing's Triple Crown today in Baltimore also will owe taxes.
http://dontmesswithtaxes.typepad.com/dont_mess_with_taxes/2013/05/another-big-betting-day-as-powerball-preakness-and-taxes-converge.htmlWho had the worst week in D.C.? tag:typepad.com,2003:post-6a00d8345157c669e20191023f72ee970c2013-05-18T09:19:31-05:002013-05-18T09:32:30-05:00Last week was wild in D.C. Three separate hot button issues erupted into what are being termed by many as scandals. It made me miss being there to watch the crazy first-hand. Questions are being asked, fingers pointed, jobs lost in the wake of three scandals fixating Washington, D.C., this May. Benghazi attack, political aftermath: Let's start with the tragedy at the U.S. embassy in Benghazi, Libya. In that attack last September, Ambassador Chris Stevens and three other Americans were killed. Questions about the circumstances surrounding the attack and how the Obama Administration dealt with it bubbled back up last week. This latest round of inquiry focuses on the talking points -- the list of officially approved statements -- used by the White House and other federal agency officials in public discussions of the attack. Who said what? Why did they say that? And just who wrote and approved the talking points? IRS added attention to the Tea Party: Then...skbell1
Last week was wild in D.C.
Three separate hot button issues erupted into what are being termed by many as scandals. It made me miss being there to watch the crazy first-hand.
Questions are being asked, fingers pointed, jobs lost in the wake of three scandals fixating Washington, D.C., this May.
Benghazi attack, political aftermath: Let's start with the tragedy at the U.S. embassy in Benghazi, Libya. In that attack last September, Ambassador Chris Stevens and three other Americans were killed.
Questions about the circumstances surrounding the attack and how the Obama Administration dealt with it bubbled back up last week. This latest round of inquiry focuses on the talking points -- the list of officially approved statements -- used by the White House and other federal agency officials in public discussions of the attack.
Who said what? Why did they say that? And just who wrote and approved the talking points?
IRS added attention to the Tea Party: Then the Internal Revenue Service admitted that some of its workers used improper screening methods to examine groups' applications for tax-exempt status.
Did that system deny groups the desirable 501(c)(4) designation, which allows them to escape paying taxes and keep their donors' names secret? Was information gathered inappropriately shared with other federal agencies?
IRS use of specific search terms such as Tea Party and patriot has, so far, caused two high-level IRS employees to look for new jobs and prompted at least three Congressional hearings, the first of which by the House Ways and Means Committee was held Friday, May 17.
Justice and the media: Finally, the Department of Justice is dealing with reaction to the revelation that it seized Associated Press phone records as part of an investigation into potential national-security leaks connected to CIA counter-terrorism operations.
Was it really a war on journalists? Or did the DoJ correctly walk a thin line to obtain material it argues was critical to a serious national security breach?
Who's having the toughest time? This trouble trifecta naturally prompts comparisons to similar prior situations in the nation's capital, as well as raises questions about which matter is causing the most problems for its participants.
Personally, I think Steven Miller, the former Acting IRS Commissioner, deserves our collective sympathy.
There's no question that the IRS royally screwed up in how it approached the processing of the tax-exempt applications. But Miller lost his job because of it and had to deal with pontificating politicians on Friday during the Ways and Means Committee hearing into the matter.
So who do you think had the worst go of it last week?