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Posted
Sep 30 2009, 01:02 PM
by
Karen Datko
Money Blog: Smart Spending Blog - MSN Money
This guest post comes from Frank Curmudgeon at Bad Money Advice.
There was a pretty good post over at Wise Bread the other day on how if a credit card company forgives some of what you owe, what was forgiven is income you have to pay taxes on.
On the one hand, this is a point worth repeating because it seems to surprise most people. On the other hand, the post neglects to mention an important exception, and, moreover, feeds into the belief that this is an irrational fluke of the tax code. It isn't. It makes sense.
You owe Credit Card Corporation (CCC) $5,000. Realizing you are unlikely to pay them back in full, and now regretting lending you the money to begin with, CCC agrees to settle the debt for $2,000 cash. You sell your PEZ dispenser collection on eBay and send them a check.
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Posted
Sep 08 2009, 08:28 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This post comes from J.D. Roth at partner blog Get Rich Slowly.
Note: Although I try to keep GRS a politics-free zone, today's topic is inherently political. I've stayed as neutral as possible in the article, but I know that there'll be some political discussion in the comments. Please keep conversation civil, as always.
Because I was frustrated with my own ignorance about the U.S. federal budget and our tax system, I recently spent 12 hours researching a variety of tax topics. From my research came two articles: my recent short guide to the federal budget and today's post, which answers some of my personal questions about taxes.
In the earlier post, we tried to take a few small steps toward understanding the federal budget. We looked at where the U.S. government spends its money. But where does it actually find the cash to spend?
Of the $2.333 trillion in U.S. government receipts:
- $1050 billion (45.0%) comes from individual income taxes.
- $939 billion (40.2%) comes from social insurance/retirement receipts.
- $221 billion (9.5%) comes from corporate income taxes.
- $76 billion (3.3%) comes from excise taxes.
- $20 billion (0.9%) comes from estate and gift taxes.
- $28 billion (1.2%) comes from Federal Reserve deposits.
- $16 billion (0.7%) comes from other miscellaneous sources.
As you can see, nearly half of government receipts come from individual income taxes. Naturally, taxes are a hot-button issue. They have been since this nation was founded. (To be fair, though, the driving force then was "taxation without representation." Modern complaints are against taxes in principle, I think.)
During my research, several questions about taxes occurred to me. In today's article, I'll do my best to share the answers I found.
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Posted
Aug 17 2009, 02:27 PM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
 Is this an idea whose time has come? A new bill in the U.S. House would allow pet owners to deduct up to $3,500 for "qualified pet-care expenses" for household pets, including vet bills.
Would the so-called HAPPY (Humanity and Pets Partnered Through the Years) Act give pet owners a break they deserve? Would it encourage more people to adopt abandoned or neglected pets? Would we finally be able to list some dependents on our income tax return? (Others have attempted -- unsuccessfully -- to use their pets as deductions.)
Bing: New tax deductions
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Posted
Mar 16 2009, 04:25 PM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
This guest post comes from Andy H at Bankling.
As Web searches have recently shown, Americans are very worried about the economy. So it wasn't a moment too soon that the Obama administration announced the launch of Recovery.gov. A week later, he also mentioned it in a widely syndicated speech, so I'm guessing thousands of Americans are now logging on to the site to see what's up.
Let's take a look under the Recovery.hood, shall we?
My first impressions of Recovery.gov are actually pretty good. I'm not one to praise the government for anything (no, really), but I have to admit that federal laws governing accessibility standards of government Web sites make for a quality end product. The home page text and navigation are clear, concise, and to the point -- and how many Web sites can claim that these days? I'd also like to say that I think Recovery.gov was a good pick for the domain name -- much superior to Bailout.gov or CanadaRelocationGuide.gov.
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Posted
Mar 10 2009, 06:08 AM
by
Karen Datko
Money Blog: Smart Spending Blog - MSN Money
This post comes from Jim Wang at partner blog Bargaineering.
Starting today, I'll be volunteering every Tuesday morning in the kitchen at the local Howard County Meals on Wheels facility. It's less than five miles away one-way, but I still wanted to research how to claim the driving mileage on my taxes to reduce my tax burden as much as possible.
At 10 miles a week and 52 weeks, we're looking at only 520 miles for the entire year. The deduction for 2008 was 14 cents a mile (IRS standard mileage rates), so we're talking a $72.80 deduction -- but every bit helps.
This is what you need to do to determine whether you can claim it and what you need to do to document it. (This is covered in IRS Publication 526.)
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Posted
Jan 29 2009, 04:32 PM
by
Karen Datko
Money Blog: Smart Spending Blog - MSN Money
The ranks of people collecting unemployment benefits have swelled to unprecedented numbers, and there are some things those people should know. They can start by reading Kay Bell's post called "Tax concerns of the unemployed" at Don't Mess With Taxes.
First off, unemployment compensation is subject to income tax.
"Not to rub salt in the wound, but the tax code often causes additional problems for unemployed folks," Kay wrote.
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Posted
Jan 08 2009, 07:20 AM
by
Karen Datko
Rating:
Money Blog: Smart Spending Blog - MSN Money
The tough economy has produced one blessing we can count. "It's helped the IRS find a heart," Kay Bell said in a post at Don't Mess With Taxes.
IRS Commissioner Doug Shulman announced that the Internal Revenue Service will work with people who can't pay what they owe because of job loss or some other financial catastrophe.
You'll still have to pay your taxes, but you may get more time to do it. "The IRS does feel your pain," Kay wrote.
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Posted
Dec 02 2008, 06:30 AM
by
Karen Datko
Rating:
Filed under: banking, credit, Bargaineering, online banking, financial planning, credit cards, credit reports, homeowners insurance, mutual funds, estate planning, wills, executor, emergency fund, income tax, tax software
Money Blog: Smart Spending Blog - MSN Money
This post comes from partner blog Blueprint for Financial Prosperity. Popular Mechanics created a list called "100 skills every man should know," which naturally gravitated toward DIY/physical skills like jump-starting a car and splitting firewood. The Frisky listed "30 skills every woman should have before turning 30," which actually touched on more than physical skills (though No. 12 is physical), with a handful of financial skills (Nos. 17-20). The following isn't a checklist of things you necessarily need to do in your life. It's a list of things you should know how to do in case the need arises.
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