*** Ask TaxMama Volume 7, Issue #328 September 30, 2005 ***
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http://taxmama.com/taxcalendar.html
10.17.2005 Personal Tax Returns Due
10.17.2005 Partnership/LLC Tax Returns Due
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JOB OF THE WEEK visit the NEW http://taxmama.careerbank.com
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Make a real difference - become a lobbyist for
The American Diabetes Association
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In fact, they have lots of openings, even Director of Finance
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Take the new 2005 Salary Survey
http://www.careerbank.com/resource/ssurvey/salary_survey.cfm
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Dear Family,
Another year is coming to a close.
Our new year is a time for introspection and
reflection and forgiving - and a cleansing
and renewal. Perhaps resolutions are a part of
it too - though, often more about becoming better
people than building better bodies.
Thank goodness we have times like Rosh Hashanah,
and other ethnic New Years throughout the year.
Most new years are associated with concepts like
resolutions and renewals.
If you're ever feeling that you need a clean
sweep, check the calendar. There's bound to be
someone's New Year coming up. Adopt it. Start
over - and you'll feel much better. (I've
included a list of some ethnic new years to
help you out.)
And speaking of great ideas with which to start
the new year - our conversation with Jacqueline
Freeman, during this week's webinar, was absolutely
inspired. Jacqueline is a blending of graciousness,
common sense, charitable nature and brilliance.
When I grow up, I want to be like her.
We recorded the session and saved it just for you.
http://taxmama.com/workshops/
Another fun feature we'll be adding to Ask TaxMama
from time to time is Your 15 Minutes of
Fame.
I get requests from journalists looking for people
to interview. They often need regular folks instead
of experts. So whenever something like that comes
up, we'll include their queries. And who knows,
during the coming year, you might just find your
name in print!
Today's IRS News includes lots of good news for
the recent Katrina and Rita victims - at least,
taxwise. But there's also bad news that will make
you laugh, if it doesn't make you cry. Often, people
say that the tax system soaks them. Well, this time,
it really did.
This issue is filled with great material - because
you bring it to my attention or share your stories.
Thank you for making this newsletter, and this
site such a joy.
Oh yes, and please, remember to eat a slice of
apple dipped into honey each day. It may help
bring you a sweet and happy year.
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/AskTaxMama/book/
P.S.S. NEW! POSTAGE STAMPS - THE ORIGINAL 1913 TAX RETURN
http://www.cafepress.com/taxmama.28979465
Or create your own custom postage - join
CafePress
http://www.cafepress.com/cp/info/storeref.aspx?refby=taxmama
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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?subject=AskTaxMamaComment
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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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Did you miss this week's webinar?
How to Run Your Business Instead
of Letting it Run You.
With guests, Joseph & Jacqueline Freeman
http://josephfreeman.com/
IT WAS GREAT!
In fact, it was so good, that listening to what
they are doing right now, we found a way to increase
their income by at least 400% just by changing how
they handle their present opportunities. It not
only won't take them any extra time, it will
ensure that when they are too old to do the
physical work involved with FASCIAL REBALANCING
to horses, their income from the business won't
diminish.
The same technique may just work for you, too.
We recorded the session - I've put it up
so you can listen. Definitely, tune in!
http://taxmama.com/workshops/
In fact, it gave me an great idea for my
own business, too.
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EA Exam Review Class - Self-Study
All the material, books, audios and self-hypnosis
tools we used to study for this year's exam will
be at your disposal - including six live classes
with TaxMama or her terrific instructors.
This is an excellent opportunity for someone
who has too little tax background to take a
quick summer review class. We'll guide you on
your studies, so you actually learn how to
understand the tax system works.
http://irsexam.com/register.php
Lots of Practice Tips to help you be a hero
to your clients, too.
http://irsexam.com/register.php
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USE THESE QUICKIE RESOURCES!
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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.
http://asktaxmama.com/go/autographed
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 and tax news. You're also missing daily
news and other commentary.
Please - accept a complimentary subscription from your
cheery TaxMama - to the Internet's NUMBER ONE tax podcast
http://www.taxmama.com/taxquips/
This weeks pearls of wisdom are at:
http://www.asktaxmama.com/podcast/
MONDAY - Business Identity
http://www.asktaxmama.com/podcast/index.php?id=66
TUESDAY - College Donations
http://www.asktaxmama.com/podcast/index.php?id=67
WEDNESDAY - Cleaning Up
http://www.asktaxmama.com/podcast/index.php?id=68
THURSDAY - Defaulted Student Loan
http://www.asktaxmama.com/podcast/index.php?id=69
FRIDAY - What IS Back Up Withholding, Anyway?
http://www.asktaxmama.com/podcast/index.php?id=70
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Ethnic New Years
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Winter - Chinese New Year
http://en.wikipedia.org/wiki/Chinese_New_Year
Winter - Tet Nguyen Dan Vietnamese New Year
http://www3.kumc.edu/diversity/ethnic_relig/tet.html
Winter - Al Hijra - Muslim New Year
http://www.bbc.co.uk/religion/religions/islam/holydays/al_hijra.shtml
Spring - Naw Ruz - Baha'i and Persian New Year
http://www3.kumc.edu/diversity/ethnic_relig/nawruz.html
Fall - Rosh Hashanah - Jewish New Year
http://www.jewfaq.org/holiday2.htm
Fall - Ramadan - Moslem purification
http://www3.kumc.edu/diversity/ethnic_relig/ramadan.html
Fall - Diwali - Buddist, Hindu New Year
http://www3.kumc.edu/diversity/ethnic_relig/diwali.html
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Are you Single - but Don't Want to be?
Got Single Friends - Who Shouldn't be?
You simply must sign up for Dr. Judith & Dr. Jim's
"Smart Dating Summit" on October 5 and 12, 2005
http://go.asktaxmama.com/smartdating
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Move Mix-Up
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From: Lexington, SC
Dear TaxMama,
I hope we're not in a terrible predicament here. We
built a house in North Carolina (NC) and lived in for 7
years. Then, we bought a house in South Carolina (SC)
before the house in NC sold, just KNOWING that it would
sell quickly. Ha!
5 months later, we now own two mortgages. We are thinking
of moving back home to NC, as we're really homesick. But
we're very worried about the tax implications of selling
this house we're presently in.
We have also thought about taking my husband's retirement
fund (which hasn't grown in years) to pay down the
principle of our NC house if we do move back. His retirement
fund is tax-deferred. And these days, he's a full-time
doctoral student (making my teacher's salary our only income.
(Talk about a low tax bracket!) He's young enough to start
over (40).
What sort of penalties would we have to pay? We borrowed
a lot of money from my father-in-law to make a big down
payment on the SC house and we want to pay it back. We
were going to use the proceeds from the NC house to pay
him.
Help!
Carla
<TaxMama Replies>
Dear Carla,
Whew! Much too complicated!
But think about this, OK?
If you move back home to NC, you're going to
get a job and work, won't you? You have no
choice, so 'Yes!'.
You just might be able to get away with an
'unforseen circumstances' allowance that would
let you pro-rate the $500,000 non-taxable
allowance on the profits when you sell the SC house.
Did the house in SC go up in value significantly?
Remember, the taxable profit is figured after sales
commissions and sales costs, which usually amount
to approximately 10% of the sales price. Once you
take that into account, will you have much of a
profit on the sale? If not, you have nothing to
worry about.
If you do end up with a taxable profit, start
digging through your receipts for expenses
you
incurred to fix up the SC house. Find all the costs
for permanent improvements to the house, like the
painting, appliances and window coverings (that
remain with the house). Such things will reduce
your taxable profit.
Then, if you still have a profit, try for unforeseen
circumstances.
Please read the explanation here:
http://www.taxmama.com/AskTaxMama/307/article3.html
And the computation for it here:
http://www.taxmama.com/AskTaxMama/306/article4.html
But if you do have to pay taxes, well...the rate
will be your regular tax rate for both IRS and
the state. Unless you find a way to drag out the
sale so the escrow doesn't close until after you've
been in the house for over 1 year.
If you can accomplish that, you'll be able to
reduce your tax rate for IRS, to 15%. You see,
you'll be able to use the long-term capital
gains rate. And SC has a lower capital gains
rate, it will apply to you.
You'll be fine. Don't worry.
Do what you want with your life.
IRS and tax codes shouldn't be allowed to destroy
your happiness. There's always a loophole to help.
Best wishes,
Eva Rosenberg, MBA, EA
http://www.TaxMama.com
If you're in business, READ THIS BOOK.
Small Business Taxes Made Easy - read all about it!
http://www.taxmama.com/AskTaxMama/book/
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Impatient Homeowner
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From: Mesquite, Texas
Dear TaxMama,
I have a IRA with my credit union and I was wanting
to cash it in to pay off my house. I am 57 years old.
What penalties would I pay or could I even cash it out?
It was a 401k plan I had with my previous employer.
When I left there I changed it over to an IRA
Thanks
Mary
<TaxMama Replies>
Dear Mary,
Please don't do that!
If your IRA isn't earning more than your mortgage,
then move the account to something more profitable.
You can also refinance your mortgage to get a lower rate.
But pulling the money out of your IRA....?
You'll have a 10% IRS penalty for early withdrawal.
You'll have IRS taxes at your highest
rate, including
the income from the IRA. Why?
Wait until you're 59 1/2 and start drawing money as
you need it. You won't pay penalties. Your taxes will be
at a lower rate...and you'll be better off.
That's just my opinion.
Best wishes,
Eva Rosenberg, MBA, EA
NEW! POSTAGE STAMPS - THE ORIGINAL 1913 TAX RETURN
http://www.cafepress.com/taxmama.28979465
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15 MInutes of Fame Opportunity
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For a major, national, home magazine, the reporter needs
to find these types of women by October 4th:
Women who are struggling with financial problems.
Need to interview and profile women in 30s/40s with
children (preferably the kids should be over 5, and
include one tween or teen). We will be featuring
different types of financial scenarios.
I need women who are struggling with various financial
problems, such as:
Struggling to meet day to day expenses and unable to
save in general;
Unable to save for college;
Struggling with credit card debt;
Dealing with a job loss and resulting loss of income;
Dealing with divorce and the resulting loss of income;
Dealing with a health crisis and resulting medical
bills because of no insurance coverage, or because
a parent had to quit work.
Women must be comfortable disclosing their financial
details and having their photos in the magazine.
If you're interested in being interviewed, let me
know your financial background, age, and city/town/state.
If you're interested, please send an empty e-mail to:
mailto:taxmama@taxmama.com?subject=15Minutes
Or taxmama@taxmama.com with 15Minutes in the
subject line.
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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/KatrinaRecovery
FEMA - http://www.fema.gov/news/newsrelease.fema?id=18473
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Talk to Linda Baker for more information
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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.html
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MONEY FUNNIES
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The Seven-Hundred-Ten
A few days ago I was having some work done at
the local Ford Dealership. A blonde came in
and asked for a seven-hundred-ten.
We all looked at each other and another
customer asked, "What is a seven-hundred-ten?"
She replied, "You know, the little piece in the
middle of the engine, I have lost it and need a
new one." She said that she did not know what
it was but this piece had always been there.
He gave her a piece of paper and a pen and asked
her to draw what the piece looked like. She drew
a circle and in the middle of it wrote 710.
He then took her over to another car, which had
its hood up and asked, "Is there a 710 on this car?"
She pointed and said, "Of course, it's right "there."
http://womencentral.net/oil2.jpg
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Contributed by Barb Herbst
[Remember, we're always looking for SHORT, clean humor!]
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IRS and Tax NEWS
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Courtesy of IRS
FIRST, THE GOOD NEWS!
The Katrina Emergency Tax Relief Act of 2005 (H.R. 3768)
was signed into law on September 23, 2005
You are welcome to read the 30 page Technical Explanation
prepared by the staff of the Joint Committee on Taxation
http://www.house.gov/jct/x-64-05r.pdf
As a result of KETRA, once again, IRS extends the
deadline for Hurricane Katrina victims - this time
to February 28, 2005
http://www.irs.gov/newsroom/article/0,,id=148657,00.html
The same relief has been granted to anyone affected
by Hurricane Rita
http://www.irs.gov/newsroom/article/0,,id=148540,00.html
THEN, THE BAD NEWS!
Sept. 23, 2005 Problem Alert:
IRS Reports Some Tax Payments From 13 States Lost
The Internal Revenue Service is alerting taxpayers in 13
states that approximately 30,000 estimated tax payments
sent to a San Francisco post office box in early September
have been lost in the aftermath of a traffic accident.
Taxpayers who may be affected include:
• Residents of Alaska, Arizona, California, Hawaii,
Idaho, Montana, Nevada, Ohio, Oregon, Utah, Virginia,
Washington and Wyoming and
• Anyone who mailed an IRS tax payment to the IRS San
Francisco post office box between Sept. 1 and Sept. 11.
The accident occurred on the San Mateo Bridge near San
Francisco in the early morning hours of Sept. 11, as a
contract courier was delivering mail from the post
office to a check-processing facility in Hayward, Calif.
The IRS estimates that approximately 30,000 of the
estimated 45,000 tax payments on board the vehicle ––
mostly Form 1040-ES quarterly estimated tax payments ––
were ejected into the San Francisco Bay and are not
recoverable.
Read this for more information - and for information
on what to do if your check was soaked...
http://www.irs.gov/newsroom/article/0,,id=98129,00.html
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CAREER CENTER Employee of the Week
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John is an Accountant with an MST, a CPA, 7+ years
experience in tax and public accounting.
He lives in Belleville IL, but would love to move to
Dallas, TX or Saint Louis, MO or Nashville, TN.
After spending most of his career running Credit Unions
(President of Northeast Illinois Credit Union; Treasurer
of Tempel Federal Credit Union), John took time off to
get his CPA and his Master of Science in Taxation at
Fontbonne University, in St. Louis, MO (August 2005).
Even his education was exemplary, John received the
Outstanding MST Student Award (April 2005)
John is an accomplished team player with proven ability
in accounting and tax. Extremely motivated for a long-
term career and eager to contribute with solid credentials.
Driven by personal initiative and achievement of
professional goals with highly regarded computer skills
and attention to detail.
You can find John and professionals like him
at TaxMama's Career Bank
http://taxmama.careerbank.com/
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CAREER CENTER http://taxmama.careerbank.com/
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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/
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Not-So-Fr*e Books
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http://taxmama.com/resources/shopbook.html
eBook - TaxMama's Secrets:
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For more:
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TaxMama On the WWW & Tooting Her Own Horn
http://taxmama.com/toots/index.html
TaxMama is teaching - in person and Online:
http://taxmama.com/toots/meettaxmama.html
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Critical Dates http://taxmama.com/taxcalendar.html
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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 redistribute this
publication or to use it on your site. mailto:taxmama@taxmama.com
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