Ask TaxMama Issue 562 – Tax Holidays and More

Dear Family,

This has been an interesting week. I got to do some political lobbying and met a passionate woman. Rebecca Madigan gave up a perfectly good job to pursue the cause of small business-owners, affiliate marketers, generally, folks who work from home. Rebecca started the Peformance Marketing Association (PMA) to help set standards for ‘performance marketing’ – otherwise known as affiliate marketing.  She has been traveling the US to help convince state legislatures not to pass laws creating “nexus” for companies who don’t have a real presence in their state. For tax purposes, Nexus, essentially, means any kind of business presence. (Read Chapter 12 of Small Business Taxes Made Easy. We went to see the Honorable Felipe Fuentes, Speaker of the California State Assembly, to help acquaint him with the issues. Most astute – his questions demonstrated a high level of familiarity with the issues and the legal activity surrounding the cases in the courts. While California has just been skirting the edges of this issues so far, I think the information we brought Mr. Fuentes may have clarified the reality for him – taxing small, out of state merchants will not raise revenue. They will simply fire their California affiliates (folks in California whose websites have ads or links to the out of state merchants’ website). That means, people who may have been earning a few hundred dollars a month, or several thousand dollars will lose their income. Which means California loses tax revenue – AND may have another batch of folks back out there on unemployment.

Well, estate tax reform, even temporarily, has bit the dust yet again about a week ago. An attempt to include it in the Unemployment extension bill failed. But they will keep on trying. Meanwhile, the unemployment fund was extended. Those of you still unemployed will get your benefits, retroactive to May. 99 months and rising!

I am hearing from friends and readers, landing a decent paying job is getting harder and harder. If you’re still unemployed after a year, perhaps it’s time to look around and see what need you can fill? Perhaps it’s time to start a business?

If not that, if you’d rather sit on unemployment until it runs out – and keep trying to get a job at your old salary level, here’s an idea. Go out and do some volunteering. Not only will it get you out of the house, and draw you out of your depression – you might make the one perfect contact who will find you that job you want. Meanwhile, you’ll have a good time.

Speaking of the newly unemployed…it seems the good people of Bell, California have decided to encourage their 3 most highly paid officials to resign last night. There’s a lot of anger, resulting from a news (was it the Los Angeles Times?)expose’ of the $800,000 salary of the city manager of one of the poorest cities in the country. True, $800,000 is a bit much. After all, the President of the United States earns only half that amount! Even if the mayor does waive his wages for the rest of his term – and all those other people have resigned, the problem isn’t over. Those civil servants have pensions that will be paying them over half a million dollars per month. Naturally, both the Los Angeles County and State of California district attorneys are investigating. Since the State District Attorney is Jerry Brown, running for Governor, you can be certain he’s going to make it his mission to root out the corruption and correct the unearned pensio n.,0,3917129.story

This month’s MarketWatch column outlines some of the new laws that may affect your wallet, and taxes. There have been a lot of laws passed lately – and more to come.

EA Class News
Wow! People are passing and passing Part 1. We had lots of fun last night going over the Partnership sample tax return. Tomorrow, we grill the class on Partnership questions and problems. Join us!

Shh…don’t tell anyone. You can get a 10% discount on the EA Class if you register for TaxMama’s Family first. Then ask me for the discount code.

Upcoming Events

August 13, 2010 10:00 – noon PT
Taxes for Writers, Bloggers and Journalists
If you’re earning money from your website, your articles or your blog, you must take this class.

August 19, 2010 at 8:00 am – 9:00 am PT
The next Tax Roundtable is next month. Will you be joining us?
At the last meeting – we covered a lot topics – you can tune in, the replay is here:
Just scroll down to July’s event.
Upcoming on CPE LINK – with CPE for CPAs, EAs, and more

September 1 at 12:00pm PT
Doing Tax Research Online for Free
Identify reliable sources of tax information,
how to use them and understand them.

September 15 at 10:00 PT –
Roger B. Adams, EA (with minor assist from TaxMama)
Understanding Tax Treaties
Learn the fundamental principles of the purpose and application of tax treaties. Why should you care? Because there are over five million Americans living outside of the U.S., over two million of whom live in the Western hemisphere (principally in Canada and Mexico).


Homebuyers Credits for Tax Professionals
The specific laws related to your clients.
How to get it rigth the first time. What to watch out for.
And how to overcome IRS Rejections.
Other TaxMama News:

At Equifax this week, you learn about energy credits available to you; Ilyce Glink helps you protect your home, in case of unemployment; Dan Solin explains how Sec 529 College Savings plans work; Linda Rey helps you insure your summer fun; and the Equifax experts explain how things get updated to your credit report.
This week’s blog has a really nifty tool for you. You get to see how your tax liability would look under three different tax plans. Try it, it’s fun!

In Money Funnies this week, we explore the generation gap.

In IRS News, we learn the Top 10 Things Every Taxpayer Should Know about Identity Theft
In TaxQuips this week TaxMama gives you advice and resources to help you learn about investments and improve your credit score. We help Tim, who got bad advice from friends. And end the week, pointing you to sales tax holidays in your area.
Do you know how to report your income if you work in two different states? Bruce McFarland explains it all.  And Jessica Dorsett, CPA outlines how to record asset purchases on your company’s books.

As always, we love your feedback, opinions and ideas.
You are what makes all this fun – and interesting!

Please use the Comments link online.

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Hugs from your favorite TaxNerd,*

Eva Rosenberg, EA

Your TaxMama®  is watching…out for you.


08/02/2010 2nd Quarter Payroll Taxes Due
08/02/2010 Employer’s Deposit Federal Unemployment (FUTA) 
08/02/2010 Employers File Annual Return for Employee Benefits Plan 5500
08/02/2010 Employers File Annual Return for Employee Benefits Plan 5500-EZ
08/02/2010 Employers File request for Extension filing Employee Benefits Plan Return
08/02/2010 2nd Quarter Federal Excise Tax Return & Payment Voucher
08/16/2010 Employers Make Monthly Payroll tax deposit on the 15th of each month
08/31/2010 Time for businesses to consider setting up retirement plans

From TaxMama® to You!

Follow TaxMama®’s Tweets –

You are invited to put a TaxQuips Widget on your phone, social networking page, website, or… You’ll get the TaxQuips as soon as they published – long before they are distributed in by e-mail. It’s a nifty gadget. Just pick up the code and paste into your site or application.

Download TaxMama’s 2010 iphone Tax Calendar. My gift to you.

Never miss a tax deadline again!
The customizable tax calendar is here.
Add or Remove dates. Add your own reminders – get alerts.


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Take TaxMama®’s 2010 EA Exam Review Class 

Class is going strong.

Part 2 is going strong.
This weekend we cover Business Income and Expenses

Tax Professional and author Wayne Davis ( ) just passed Part I of the exam.
He says ‘I could go on and on about all the valuable info and “insider tips” that you have provided in the class lectures.”

– sign up now – and join the FUN!

A flood of Tax Professionals are interested in
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