Ask TaxMama Issue 652 – Happy Tax Holiday Season

 
Dear Family,

States around the country are offering sales tax holidays this time of year. Click on the graphic (at left) to find the details.

All these years, we never really heard anything about the taxability of the Olympic medals – or of the cash prizes given to each winner. Suddenly, this month, it’s all over the place. It is good to know that these athletes, doing such a good job representing the US of A to the world are getting something more than accolades. But it is a bit embarrassing to see that the Chinese and Russians pay much more than the US Olympic Committee. (That’s right – it’s not our proud government paying for this.)

We pay only $25,000 for the Gold; $15,000 for the Silver; and $10,000 for the Bronze. (Though, I understand that China only pays for the gold medal.) And yes, my friends, these awards are taxable. Good news is, they are only taxable as prizes – not as self-employment income. (Now that would be really mean, to add an extra 13.3% on top of the income taxes.)

Along with the sudden news about the taxability of the awards is instant bi-partisan agreement to exempt the Olympics income from taxation. While taxpayers are sitting around being unemployed and facing the loss of their homes – Congress can’t come to any rational agreements to help them. But, wow, bring sports into the picture – and both houses and the President can immediately come to terms to bring a bill to exempt these athletes’ winnings from taxation.

What gets me wondering, when I hear the names of the winners in the various competitions, is what happened to the mandatory amateur standing of Olympics athletes? Most of the names I hear are professional athletes. Back in the day, when this was supposed to be all about amateurs, ordinary citizens demonstrating their healthiness, and prowess, I could have agreed with exempting the Olympics winnings. But now, with the pros, who do this for a living, getting awards? It makes no sense to me. It appears that the Christian Science Monitor feels the same way – or at least, guest blogger, Howard Gleckman.

Look, I don’t mind if the House, the Senate and President grant this exemption. That’s fine. But could they also do something useful?

  • Like stop wasting time on ugly election campaigns. (Shame on you President Obama. Last time you ran a clean campaign – why not focus on the issues and your successes and lay off the personalities, and pot shots.)
  • Like start providing funding to re-training programs and unemployment support to give the unemployed time to learn currently marketable skills, while staying in their homes and feeding their families.
  • Like start finding ways to release development funds to small businesses so they can hire people, turn a profit and build our economy, right here in the country – instead of helping the multi-billion dollar conglomerates pay bonuses and send their jobs and funds offshore.

Just a few random thoughts – ideas that might help…Want to add a few ideas of your own?

This week’s Money Funnies has a poignant touch. We meet a busy, crusty waitress and a little boy, counting his pennies. What do we learn from this?

Today, in IRS News we learn ways to safeguard our records in the event of a disaster – and what kind of tax breaks we can get – or can’t – when we’re moving.

Speaking of moving, should you let IRS know? Or hope they lose track of you? We answer that in this week’s It’s A WAHM thing column. A Moving Story – or Three Good Reasons to Tell IRS You Moved.

In fact, last week’s Equifax Blog expands on the theme – Tell IRS and Your State When you Move. Doing this can help you avoid tax problems, believe me. The last thing you want is for the IRS (or your old state) to NOT know where to find you. Missing notices can be costly.

If you want to see all the TaxQuips from earlier in the week, drop by here. There are some interesting topics.

Incidentally, if you’re looking for a job, an intern, or a new employee, please visit the new TaxMama Career center, partnered with JobTarget.com. For 15% off on any postings or orders, use the code: taxcareers .

We have more classes coming up soon . We will be finishing up our Tax Practice Series at CPE Link in August. And we’ll have your small business checklist for you, too, among other interesting sessions.

At TaxMama’s EA Exam Review Course we’ll be starting the Part 2 business and entity courses on August 7th. You still have time to Join the fun!

Remember to follow TaxMama®’s Tweets – http://twitter.com/TaxMama

Have you grabbed the TaxQuips Widget for your phone, social networking page, website, or…? You’ll get the TaxQuips as soon as they published – about an hour before they are distributed in by e-mail. It’s a fun gadget. Just pick up the code and paste into your site or phone app.

http://www.widgetbox.com/widget/taxmamas-taxquips-daily-tax-podcasts

Let’s address a few tidbits of news – and go back to work!

Weekly Equifax blog is still going strong.
http://blog.equifax.com/tax/
Filing Taxes: Paperwork For Your Tax Professional
Avoid Paying Penalties on Estimated Taxes
Learning from Your Tax Filing Mistakes
After Filing Taxes: Responding to Letters from IRS
Tax Tips: How Long Should You Keep Records?
Using Standard Mileage Rate for Business Deductions
Making Estimated tax payments
Free Money Coming Your Way Due to Tax Mistakes
Using Your Home Renovation to Maximize Tax Benefits
Money Management: Explaining Paystubs to Your Teen
Harvesting Capital Gains Now—or Later
Celebrity Tax Hit List: Celebrities in Tax Trouble
Tell IRS and Your State When you Move
Beware of Paying Increased Property Taxes – NEW!

MarketWatch
http://www.marketwatch.com/Journalists/Eva_Rosenberg
Ruling poses tax issues for same-sex couples

BizFilings

What is the Best Entity for Your Business?
The Non-Profit as a Business Model
Tax Issues Regarding Copyrights and Trademarks
Business Licenses You Need and Trust
Now That You Have an LLC, it’s Time to Make Tax Decisions

ITS A WAHM THING

Home Based Business Accounting Software Options
Writing off your Family’s Vacation
TaxMama’s 10 Tips for Success
Writing off summertime parties.
Vehicle Deductions Driving You Crazy?
Are You Classifying Your Workers Properly? (note – this links to TaxMama overview of Stakeholder liaison discussion)
http://taxmama.wpengine.com/?p=11430
The Ins and Outs of Shoeboxed.com
Do you have a Marital Conflict of Interest?
A Moving Story – or Three Good Reasons to Tell IRS You Moved – NEW!

You can find daily TaxQuips into YouTube videos
http://www.youtube.com/taxmama1 http://www.youtube.com/user/taxmama1/videos

As always, we love your feedback, opinions and ideas.

You are what makes all this fun – and interesting!

http://taxmama.wpengine.com/asktaxmama/ask-taxmama-issue-652

TaxNerd gear makes a bold statement year-round.

Hugs from your favorite TaxNerd,

Eva Rosenberg, EA

Your TaxMama® www.TaxMama.com

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08/15/2012 Employers Make Monthly Payroll tax deposit on the 15th of each month
08/30/2012 Time for businesses to consider setting up retirement plans
09/17/2012 Employers Make Monthly Payroll tax deposit on the 15th of each month
09/17/2012 Partnership Returns Due- FINAL DEADLINE
09/17/2012 Corporate Returns Due- FINAL DEADLINE
09/17/2012 S Corporate Returns Due- FINAL DEADLINE
09/17/2012 Estate & Trusts Returns – Final Deadline; Bankruptcy fillings use the same form
09/17/2012 Individuals, Farmers & Fishermen Pay 3rd Quarter Estimated Tax Payment
09/17/2012 Corporations – 3rd Quarter Estimate Tax payment Due 
09/17/2012 Estates & Trusts 3rd Estimated Tax Payment
09/17/2012 Deadline for Corporations and Partnerships to fund SEP-IRAs for previous year.
09/30/2012 Last day to establish SIMPLE plans for current year
09/30/2012 Time for businesses to consider setting up retirement plans

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EA EXAM NEWS & SOLVING THE TAX PUZZLE

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