*** Ask TaxMama Volume 7, Issue #329 October 7, 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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See the pyramids along the Nile. There's a great job
opeing in Cairo - yes, Egypt, as the Country Director for
the Financial Services Volunteer Corps
http://taxmama.careerbank.com/job.cfm/222590.htm
Take the new 2005 Salary Survey
http://www.careerbank.com/resource/ssurvey/salary_survey.cfm
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Dear Family,
I've been getting reports that people are having
problems accessing the site. It's happened to me,
too. It seems there's something going on with a
section of the Internet's backbone and you'll find
access to a variety of sites disappearing
intermittently. Don't worry. Just try again in a
few minutes. (But that's why we're running late
today...I needed access to the mailserver.)
Some people just love to read statistics.
IRS just released one of their newest reports
analyzing 2002 and 2003 filing information.
Read today's IRS News for some of the highlights.
This week, I tried to file for trademark online.
Gee, it was fun. I hit a roadblock and might have
been side-tracked forever, except for one little
tool I remembered that I had. It's one you can
use, too. Read today's Trademark Applications.
Today's issue includes the latest scam alerts
and a really funny resume.
Today's questions are interesting. And make
it clear that you really need to get advice
BEFORE making decisions about large financial
transactions. Afterwards, is usually too late.
There's lots going on here today! Enjoy!
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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---==========**********O**********==========------
In 2003, Americans OVERPAID their taxes
by more than $500 MILLION!
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Media Tour and Classes
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Join us on October 18, 2005 at 11:30 am EASTERN
TaxMama will be on Your Money Radio Program
click the microphone to listen:
http://yourmoneylive.com
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Did you miss this the last webinar?
How to Run Your Business Instead of Letting
it Run You.
With Jacqueline Freeman of http://josephfreeman.com
Listen here http://taxmama.com/workshops/
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If you're flying Southwest Airlines this month,
be sure to read their Spirit Magazine.
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EA Exam Review Class - Self-Study
Get an early start!
Especially if you still need to learn
about income taxes in the first place.
http://irsexam.com/register.php
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USE
THESE QUICKIE RESOURCES!
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101 WAYS TO BE YOUR BEST
http://www.1automationwiz.com/app/?Clk=1091429
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Small Business Taxes Made Easy
http://asktaxmama.com/go/autographed
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Tiger Direct's sale on hard drives
My husband's favorite place to shop online
http://www.tigerdirect.com/email/affiliate/promo.asp?id=40013864
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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 - Doggone It!
http://www.asktaxmama.com/podcast/index.php?id=71
TUESDAY - Getting Mileage
http://www.asktaxmama.com/podcast/index.php?id=72
WEDNESDAY - Married, Sort of
http://www.asktaxmama.com/podcast/index.php?id=73
THURSDAY - Real Estate Investor
http://www.asktaxmama.com/podcast/index.php?id=74
FRIDAY - Packing it In
http://www.asktaxmama.com/podcast/index.php?id=75
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Scam Alert - Phishing - Amazon
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This week I started getting a whole flurry
of e-mails, seemingly from Amazon.com which
included this warning and a link:
"Due to concerns we have for the safety and integrity
of the Amazon community we have issued this warning.
Per the User Agreement, Section 9, we may immediately
issue a warning, temporarily suspend, indefinitely
suspend or terminate your membership and refuse to
provide our services to you if we believe that your
actions may cause financial loss or legal liability
for you, our users or us. We may also take these
actions if we are unable to verify or authenticate
any information you provide to us. "
Do NOT click on the link. Period.
Delete the e-mail. It's not from Amazon.com
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Are you SINGLE?
Don't miss Dr. Judith & Dr. Jim's
"Smart Dating Summit" on October 12, 2005
http://go.asktaxmama.com/smartdating
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Filing for a Trademark Online
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Did you know that you can file for a trademark
all by yourself, online? Yup, just go right here:
http://www.uspto.gov/
Before you try to do it on the fly, start here
and read the specs for what you have to have at
hand before you file the application.
http://www.uspto.gov/web/offices/tac/doc/basic/index.html
Read more - http://taxmama.blogspot.com/
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Tip Tips
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From: Fort Myers, FL
Dear TaxMama,
I work for an hourly wage and tips.
I keep a careful daily log of my tips.
At the end of the year, if my employer doesn't
feel that I have claimed enough on tips, and
they want to insure that they've paid enough
on their tax portion, they will increase the
claimed gratuities on my W-2, above what I made.
Is this legal?
Thanks for your time!
Lindsey
<TaxMama Replies>
Dear Lindsey,
IRS sets a percentage that employers must add
to wages to account for tips. It's an approximate
amount for employers to use, when employees
don't keep daily logs.
However, if you're keeping a detailed, daily log
and you turn that in to your employer, he ought
to be able to use that to report your tips.
IRS Publication 531 explains how to keep the daily
http://www.irs.gov/pub/irs-pdf/p531.pdf
record using a booklet IRS prints out called Form 1244
http://www.irs.gov/pub/irs-pdf/p1244.pdf
You can get the actual booklet from IRS by calling
their forms line at 1-800-TAX FORM (800-829-1040).
In fact, request a dozen, so you have one for
each month.
Make a copy for your own file. And give your boss
the original every month.
Remind your employer that the tips you're reporting
are only the tips you get to keep, after you've
shared the money with hostess, and kitchen staff.
That's all that should be included on your W-2.
If you sign that booklet each month and give it to
him, he's off the hook as far as IRS liability for your
unreported earnings goes. He shouldn't be adding
any more income just because HE feels it ought to
be more.
Good luck!
Best wishes,
Eva Rosenberg, MBA, EA
NEW! POSTAGE STAMPS - THE ORIGINAL 1913 TAX RETURN
http://www.cafepress.com/taxmama.28979465
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Sick of Taxes
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From: Lawrenceburg, Tn
Dear TaxMama,
After filing last year, the iIRS wants me to pay
back taxes against the previous year. The problem
occurred because my wife is disabled and collects
Social Security disablity checks.
She took her pension and 401(k) in a lump sum. They
took out the taxes due, but my tax preparer, checked
the box that indicated we had to pay a penalty for
this, even though they saw that she was on disablity.
Now IRS also want me to pay taxes on her disability
from the previous year. This was through an insurance
policy with Prudential insurance.
I need to know what to do to correct this.
Thanks
Tony
<TaxMama Replies>
Dear Tony,
If your wife is on permanent disability
(which she must be if Social Security/SSA is
coughing up early checks), you'll need to
explain that to IRS.
There is a code on the 1099-Rs that reports
the penalty status of the draw from the 401(k).
The code should have said disability, not early
withdrawal.
Your tax preparer should have attached an
explanation with the tax return.
There should be no penalties - but you do have
to pay the tax. And generally, the companies
that administer the 401(k)s and handle the
distributions don't take enough withholding -
unless you tell them to increase it. People
rarely do. So, you undoubtedly do owe taxes
since, with a lump sum, and Social Security,
(80% of which is taxable at that income level)
and your regular income, you're tax bracket
just zoomed up to the highest level.
You certainly could have avoided that, with
just a little planning. That 401(k) money
should have been rolled over to an IRA, which
would have cost you NO tax. And your wife could
have drawn only as much money as she needed
each year, to keep your taxes lowest.
But...you've done what you've done. So, you have
the IRS notice. Just call the phone number on
the notice. Explain your situation and that there
should be no early withdrawal penalties.
Be prepared to fax them some written proof of your
wife's disability. If you have the letter from the
Social Securtiy Administration accepting your
wife's application for disability payments, that
will probably work. Otherwise, get a doctor's
letter.
As to the Prudential policy, you'll need to check
with her employer, if the policy is from her job.
Or check with your insurance agent if
it's a
private policy.
Here's an overview of how and when disability
payments are taxable.
http://taxmama.com/AskTaxMama/192/pmts.html
Of course, things like VA and firefighters' disability
generally isn't taxable.
Best wishes,
Eva Rosenberg, MBA, EA
http://www.TaxMama.com
Subscribe to the daily podcast - TaxMama's TaxQuips
http://www.asktaxmama.com/podcast/
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15 MInutes of Fame Opportunity
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Journalist working on a Good Housekeeping
article about children's medical devices is
looking for stories from parents whose kids'
medical care was impeded by lack of suitable
medical equipment for a baby or child's needs.
Examples could include dialysis equipment, shunts,
or ventilator masks that were too big for the child,
use of adult or makeshift equipment because special
devices were lacking, or any other problem with
a medical device.
She could also use some experts with in-depth knowledge
of this problem.
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, RITA et al
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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Don't let yourself or your friend feel
helpless.
Share the Power - SCHOLARSHIPS FOR SELF-DEFENSE TRAINING AVAILABLE
SHARE THE POWER:SELF DEFENSE TRAINING is gaining POWER!
visit Share The Power - http://www.sharethepower.com
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A.N.G.E.L.S. DAY
Helping Seniors keep their pets
http://angelsday.org/
Talk to Linda Baker for more information
(310) 680-0798 LBaker6343@aol.com
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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.html
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MONEY FUNNIES
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MY RESUME
My first job was working in an orange juice factory,
but I got canned because I couldn't concentrate.
Then I worked in the woods as a lumberjack, but I
just couldn't hack it, so they gave me the ax.
After that I tried to be a tailor, but I just wasn't
suited for it, mainly because it was a so-so job.
Next I tried working in a muffler factory but that
was too exhausting.
Then I tried to be a cook wanting to add some
spice to my life but I just didn't have the thyme.
I attempted to be a deli worker, but any way I sliced it,
I couldn't cut the mustard.
My best job was being a musician, but eventually I got
fired because my performance wasn't noteworthy.
I studied a long time to become a doctor, but I didn't
have any patience.
Next was a job in a shoe factory; I tried but I
just didn't fit in.
I became a professional fisherman, but discovered
that I couldn't live on my net income.
I managed to get a good job at a pool maintenance
company, but the work was just too draining.
So then I got a job in a physical health club center,
but they said I wasn't fit for the job.
After many years of trying to find steady work I
finally got a job as a historian - until I realized
there was no future in it.
My last job was working at Starbucks coffee shop, but
I quit because it was always the same old grind.
SO I RETIRED AND I FOUND I AM PERFECT FOR THE JOB
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Contributed by Ziva in Israel
[Remember, we're always looking for SHORT, clean humor!]
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IRS and Tax NEWS
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Courtesy of IRS
Excerpts from Statistics of Income
~ Corporate pretax profits reported on returns for
tax year 2002 declined by 6.6 percent, to $563.7
billion. The finance and insurance sector showed the
largest decrease, down 7.9 percent to $247.0 billion.
Total income tax before credits decreased 5.1 percent
to $209.7 billion, and income tax after credits dropped
7.9 percent to $153.6 billion. The alternative minimum
tax increased 40.6 percent to $2.5 billion.
~ For tax year 2003, nonfarm sole proprietorship profits
increased 4.2 percent to $230.3 billion. The largest
percentage increases for major industrial sectors were
13.1 percent for real estate and rental and leasing,
7.3 percent for transportation and warehousing, and
7.1 percent for professional, scientific and technical
services. The wholesale trade sector, however, reported
a 4.3 percent decrease, while health care and social
assistance profits fell by 3.5 percent.
For more details.
http://www.irs.gov/taxstats/productsandpubs/article/0,,id=148763,00.html
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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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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
However, you are encouraged to forward an intact copy to
all your
friends and invite them to subscribe!