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*** Ask TaxMama Volume 7, Issue #326 September 16, 2005 ***
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http://taxmama.com/taxcalendar
09.21.2005 - 09.22.2005 EA Exam
10.17.2005 Personal Tax Returns Due
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JOB OF THE WEEK visit the NEW http://taxmama.careerbank.com
------------------------------
WalMart is hiring - not on the floor, but at the ceiling -
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Take the new 2005 Salary Survey
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Dear Family,
News Flash! TaxMama left her living room!
Yes my friends, I finally ventured out of the house.
Amazing, there is still a world out there. And what
a world!
I came face to face with the nicest people.
Old friends, and new...and newer yet.
My buddy Rudy was supposed to be on vacation
this week, but he cashed it in and sent the
money off to help the Hurricane Katrina victims.
Rochelle, who was supposed to be on her way to
Israel this week, cancelled the trip and has
gone off to join her sister in Texas and drive
in to disaster zone to help out.
This is just a little of the love and kindness
I found in people during this time of crisis.
The United States has never faced the displacement
of so many people at one time.
People are opening their homes to victims, driving
into the area and inviting folks to stay with them
until they can get back on their feet. Friends and
family are bringing family members to their homes
until they can find new jobs and new homes in other
towns.
In San Diego, one philanthropist filled up an
entire airplane with much-needed supplies - and
brought back a plane-load of refugees.
As in any time of crisis, like the one on 9-11,
Americans are demonstrating a wonderful capacity
for love and generosity. Even IRS is helping out.
You'll see a couple of announcements about easing
up of tax filing and payment deadlines for relief
workers helping out during this disaster. There's
also a Congressional push to ease the tax burden
on 401(k) and IRA withdrawals - although IRS has
offered some minimal benefits for now. Read today's
IRS News.
And speaking of San Diego, I met the nicest tax
professionals at the join CSEA/CSTC meeting. We
had a lot of fun talking about the tax implications
of doing business on the Internet...and about how
many more people are doing business online than
they realized, including themselves.
It was also such a treat to meet one of my
EA Exam students, Jan Morse and her associate,
Roger Garay, EA. It's much better in person.
Those folks who spent the summer with me, studying
for the EA exam (coming up next week), devoted
nearly 90 hours to class time this summer PLUS
all the extra homework and study time on their
own and with their buddies - all the while,
having to keep up their jobs or tax practices,
and to care for their families. It's a huge
sacrifice and time commitment. You are my heroes!
And then there's BizRadio host Brent Clanton.
http://www.bizradio1320.com/2a
He called to have me talk about the upbeat side
of the disaster - the tax benefits available to
Hurricane Katrina victims. Well, though we barely
scratched the surface, it did get me thinking
about ways to improve the tax benefits.
The research turned up a great idea I've never
seen anyone write about. When I mentioned the
idea to Steve, my MarketWatch editor, he wanted
the article. So,...be patient. It will appear
in the Tax Watch column either later today, or
next week. (I ran this by my friends Lucie and
Jonda at Intuit, unofficially, of course. They
see no flaws in the concept, either - and
they're really smart. They like it.)
Isn't it interesting how things start a whole
train of thoughts and actions? You never know
where an innocent phone call can lead.
For those of my clients urgently trying to get
my attention, as of Monday, I'm back, working
on your returns, full-steam ahead. All
the rest
of the files I have in-house will be processed
and beautiful tax returns will come winging
their way to you soon. (Or along the waves of
electronic carriers.)
Meanwhile, if you're not in the path of the
next hurricane, the weather is gorgeous - go
outside before the weather starts to get cold!
Best wishes,
Eva Rosenberg, EA
Your TaxMama is watching...out for
you.
P.S. If you're in business, you MUST read
Small Business Taxes Made Easy
http://www.taxmama.com/AskTaxMa
P.S.S. NEW! POSTAGE STAMPS - THE ORIGINAL 1913 TAX RETURN
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******************************
To comment on any articles in this issue, please,
DON'T send me back the whole issue. Send a note to
mailto:taxmama@taxmama.com
******************************
ADDRESS CHANGES - Please, do NOT send them to me to do.
There is a link at the bottom of this issue. Please click
on it and you will be able to make updates and changes
yourself. And faster.
******************************
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Media Tour and Classes
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Next Webinar - September 28, 2005
How to Run Your Business Instead
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Guests, Joseph & Jacqueline Freeman
who've moved back to the farm...
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USE THESE QUICKIE RESOURCES!
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101 WAYS TO BE YOUR BEST
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Small Business Taxes Made Easy
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Custom autographed book, just for you - $17.50
includes shipping in the continental US.
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Bonus: CD - Dan Janal interviews TaxMama:
Should I Incorporate or What?
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This Week's Tax Quips
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If you haven't subscribed yet, you're not
just missing some juicy tips. You're also
missing daily news and other commentary.
Please - accept a complimentary subscription
from your cheery TaxMama
http://www.taxmama.com/taxquips
This weeks pearls of wisdom are at:
http://www.asktaxmama.com
MONDAY - EIC Dilemma
http://www.asktaxmama.com
TUESDAY - Independence at Last
http://www.asktaxmama.com
WEDNESDAY - Daughter's Security
http://www.asktaxmama.com
THURSDAY - Katrina Loss Strategy
http://www.asktaxmama.com
FRIDAY - eBay Cleans Out Closet
http://www.asktaxmama.com
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Astute Statute
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From: Hanover Park, IL
Dear TaxMama,
I withdrew my offer in compromise on 07/10/2000.
The IRS agent I worked with said the statute of limitations
for collections was 5 years from date the offer was withdrawn.
I have already passed the 10 year mark on the assessment.
Has it expired?
Bob
<TaxMama Replies>
Dear Bob,
How interesting. I've never heard that one before.
Hmmm....
The IRS collections statute of limitations is 10
years from the date of assessment.
Of course, to that 10 years, you must add the time
from when you submitted the Offer until it was formally
rejected or closed. And if you ever filed an appeal or
Tax Court petition, add those days or months.
For instance, the Offer was open for 6 months and three
days. So your statute is 10 years, 6 months and 3 days.
Once you've added in all that time...look to see the
date of the original assessment (or revisions due to
audits or adjustments through any notices). If you add
the time to the original audit date - and the time is
past, your debt is extinguished, gone,
uncollectible,
nada, zip!
i.e. your debt was assessed on July
6, 1994.
Add 10 years, 6 months and three days = January 9, 2005.
If your time is up, call IRS 800-829-1040
and ask them
what they are showing as the statute date for your debt.
Believe it or not, they will tell you the truth.
If it's no longer collectible, ask IRS to arrange to
issue lien releases for any liens they have filed.
They'll tell you how. Or... read this article for
instructions. http://go.asktaxmama.com
I hope this helps!
Best wishes,
Eva Rosenberg, MBA, EA
If you're in business, READ THIS BOOK.
Small Business Taxes Made Easy - read all about it!
http://www.taxmama.com/AskTaxMa
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Homeowners Association Tax
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From: Everett, WA
Dear TaxMama,
Does our home owner association ever have to pay
taxes on the money that is collected from the
owners as dues? The attorney at the first
association meeting said it is all non-profit.
Ijust want to make sure.
Thank you in advance for your helpful information.
Jody
<TaxMama Replies>
Hi Jody
What a good question!
Your association attorney is right...sort-of.
Actually, there is a special tax return just for
homeowner's associations. In general, they do
not pay taxes, because they are not designed to
show a profit. Any money not spent in the current
year, is supposed to be earmarked for specific
funds for improvements or repairs.
However, they do pay taxes on unrelated income,
like interest, dividends or investment income earned
on the savings they are holding until the roofing or
paving or whatever work needs to be paid.
They also need to pay taxes on moneys from non-
members, or money from members for the rental of
facilities, or other business-type income.
You can see a copy of that special
tax return,
the Form 1120-H
http://www.irs.gov/pub/irs-pdf
Read the instructions. You'll find they are quite
illuminating.
And, yes, do get involved in the association. It's not
only educational, but you'll also be there to ward
off any silly rules someone might decide to impose
on your all.
Enjoy your new home.
Best wishes,
Eva Rosenberg, MBA, EA
NEW! POSTAGE STAMPS - THE ORIGINAL 1913 TAX RETURN
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------------------------------
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Mystery Shopper
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From: Weston, Ohio
Dear Tax Mama,
My boy friend lives with me and is unemployed and
collecting unemployment.
I work full time. Can I claim him as a dependent?
His unemployment check is a very small amount.
Thank you so much.
Mary
<TaxMama Replies>
Dear Mary,
Your boyfriend was collecting unemployment
income
much of the year. All of that is taxable income.
Add that to the income he had before he started
collecting unemployment, and...
No doubt, that income is enough to keep him from
being your dependent. I am sure that it feels
small, when you're trying to make ends meet.
But,...if it's so small, why the heck is he
sitting on his butt collecting it?
Get out and get a job. Any job.
When there's no work in my own field, I'll go
find something else, even if it means washing
dishes, pushing a broom or doing telephone
soliciting or some kind of work through one of
the many temporary agencies in the city.
Times are tough. You can't always find the job you're
trained to do. But there's always SOME work out there.
I couldn't imagine either my husband or myself sitting
around, wallowing and living off anyone because we're
out of work.
And if your boyfriend's industry, field
or area of
expertise has been outsourced out of the country,
it's time to learn some new skills. His unemployment
agency will be happy to point him to training
opportunities. Or perhaps it's time to start his
own business doing handyman stuff, or mowing
lawns or running errands for elderly people.
If you've been supporting him long enough for you
to consider him your dependent, it's been too long.
And if he's too proud or too good to take the jobs
that are available...because he can't get the job he
wants... It's time for you both to rethink your
futures.
I wish you both lots of luck.
Best wishes,
Eva Rosenberg, MBA, EA
http://www.TaxMama.com
Author of the new book from McGraw-Hill,
Small Business Taxes Made Easy
http://www.taxmama.com/AskTaxMa
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Because We Care
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HURRICANE KATRINA
To help or to get help:
First.gov - http://go.asktaxmama.com
FEMA - http://www.fema.gov/news
==========
Don't let yourself or your friend feel
helpless.
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Helping Seniors keep their pets
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==========
The Jeremiah Society asks "Who Will Care for the Children?"
Today, many of these people outlive their parents. And therein
lies the problem. Once their loving caregivers are gone, who
will care for them? And will they be able to care for themselves?
The Jeremiah Society, is working to help enhance and enrich the
lives of developmentally disabled teens and adults in the Jewish
Community Please Call Rose Lacher, (714) 997-8193
http://www.jccoc.org/adults
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MONEY FUNNIES
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Two Tips for Telemarketer Calls
1) The three little words are: "Hold On, Please..."
Saying this, while putting down your phone
and
walking off (instead of hanging-up immediately).
This will make each telemarketing call so time-
consuming that boiler room sales would grind to
a halt.
When you eventually hear the phone company's
"beep-beep-beep" tone, you know it's time to go
back and hang up your handset, which has
efficiently completed its task.
(2) Do you ever get those annoying phone calls with
no one on the other end? This is a telemarketing
technique where a machine makes phone calls and
records the time of day when a person answers the
phone. It is used to determine the best time of day
for a "real" salesperson to call back and reach
someone at home.
After answering and realizing that no one is there,
immediately start hitting your # button
on the phone,
6 or 7 times, as quickly as possible.
This confuses the machine that dialed the call and
it kicks your number out of their system. Gosh, what
a shame not to have your name in their
system
any longer !!!
------
Contributed by Uneida in Fremont
[Remember, we're always looking for SHORT, clean humor!]
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IRS and Tax NEWS
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Courtesy of IRS
IR-2005-103 September 14, 2005
Katrina Relief Workers Have Until Jan. 3 to File and Pay Taxes
WASHINGTON — Hurricane Katrina relief workers have
until Jan. 3, 2006 to file any returns and pay any
taxes due, according to the Internal Revenue Service.
In general, this means that relief workers are entitled
to the same extensions that apply to individuals and
businesses located in the disaster area. Eligible relief
workers should notify the IRS that they are affected by
Katrina when they file returns or respond to notices or
contacts from the tax agency.
Eligible relief workers are those assisting in the
disaster area. This includes people affiliated with
recognized government or philanthropic organizations
and others.
Relief workers can get the extensions by marking the
top of appropriate forms with "Hurricane Katrina"
written in red ink. They can also alert the IRS by
calling the toll-free disaster hotline at 1-866-562-5227.
[TaxMama note: This was the funniest thing! I was just
talking to the Press Liaison at the Treasury Department
asking if there would be any legislation offering
concessions to the volunteers and relief workers, when
this notice came from IRS! Now, they've started reading
my mind.]
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More good news from IRS:
IR-2005-105 September 15, 2005
Retirement Plans Can Make Loans,
Hardship Distributions to Katrina Victims
WASHINGTON – 401(k) s and similar employer-sponsored
retirement plans can make loans and hardship distributions
to victims of Hurricane Katrina and members of their
families, the Internal Revenue Service announced today.
For the first time ever, the IRS and the Departments of
the Treasury and Labor are providing broad-based relief
to retirement plan participants affected by a major disaster.
401(k) plan participants, employees of public schools and
tax-exempt organizations with 403(b) tax-sheltered annuities,
and state and local government employees with certain 457
deferred-compensation plans may be eligible to take
advantage of these streamlined loan procedures and
liberalized hardship distribution rules. Though IRA
participants are barred from taking out loans, they may
be eligible to receive distributions under liberalized
procedures.
Retirement plans can provide this relief to employees
and certain members of their families who live or work
in the disaster area. To qualify for this relief, hardship
withdrawals must be made by March 31, 2006.
For more details, please read:
http://www.irs.gov/pub/irs
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Great News for the Rest of Us!
MILEAGE RATE INCREASE
September 1, 2005 through December 31, 2005.
Standard mileage rates:
Jan 1-Aug. 31,2005 Sept 1-Dec. 31, 2005
Business 40.5 cents 48.5 cents
Medical 15.0 22.0
Moving 15.0 22.0
Charity 14.0 14.0
(Charity rate is set by law, not IRS, so can't
change until Congress changes it.)
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CAREER CENTER http://taxmama.careerbank.com/
------------------------------
Is it time to hire new employees? TaxMama's
Career Center provides members like you with the
best tools for finding employees in our industry.
Explore the center today and take advantage of its
exclusive tools including job postings and resume
searches. As a member of the leading online career
center network for banking, finance and accounting
professionals, you can post your job on our Career
Center once and it will automatically be seen on
90+ accounting, finance and banking organization
career centers. Visit the TaxMama's CareerBank
http://taxmama.careerbank.com/
------------------------------
CAREER CENTER Employee of the Week
------------------------------
William is an Auditor, Accountant, & tax Professional,
with an MBA and CPA, 15 years experience - $30-$40/hour
or $75,000/year. He is in Terrace Park, OH.
Began accounting career in January 1987 working with a
regional CPA firm owned by former Big Four partners.
Bank auditing, accounting and tax preparation experience.
College instructor. Expertise in small- and medium-sized
businesses, skilled at providing auditing, accounting,
financial, tax and computer consulting services. Consults
to large corporations including Big Four firm, offering
auditing, accounting, and tax services of all types.
You can find William and professionals like him
at TaxMama's Career Bank
http://taxmama.careerbank.com/
------------------------------
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------------------------------
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-------------------------
Not-So-Fr*e Books
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eBook - TaxMama's Secrets:
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------------------------------
TaxMama On the WWW & Tooting Her Own Horn
http://taxmama.com/toots/index
TaxMama is teaching - in person and Online:
http://taxmama.com/toots
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Critical Dates http://taxmama.com/taxcalendar
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Ask TaxMama is published by the good folks at
http://taxmama.com
ISSN 15320790 © copyright, Eva Rosenberg, 1999 - 2005
TaxAnxiety Inc. P.O. Box 280549, Northridge, CA 91328
Written (e-mail) permission is required to copy or
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------------------------------