Taxes

As you fill out your tax return this filing season, you might find yourself wondering where that money you forwarded to Uncle Sam via payroll withholding is going.

If you end up owing even more once your Form 1040 calculations are complete, the question is even more pressing. 

Well, USA Today has developed an interactive tax tracking tool.

By Elizabeth Blackwell, TheStreet

Small-business owners are going over their 2009 financial records with various levels of dismay. Most are counting every penny. Yes, the economy seems to be picking up (gradually), and revenue may have stabilized (somewhat). But that doesn't make the looming tax bills any easier to pay.

Which leads some to wonder: Is there a way to postpone the blow? Given that so many businesses are struggling, might the Internal Revenue Service be willing to make a deal?

First, the good news: If you're in really dire straits, you can buy yourself time by delaying certain payments. If you act in good faith and follow the correct procedures, that might be enough to get you through a bad patch.

Here’s an idea you can use to do good, and make out at the same time.

Once you get the basic concept, it makes a lot more sense than the gobblygook we call the Tax Code.

Here’s the secret. There’s a section in the Tax Code that allows you to rent out your house for as much as 14 days tax-free. Rent it the 15th day, and all of the income is taxable. But keep it to 14 or less and there’s no federal tax on the cash.

You knew I had to get around to this one eventually.

In 2004, 2,833 individual tax returns were filed showing incomes of $200,000 or more with absolutely zero U.S. income tax liability. In 2005, the number jumped to 7,389, increasing to 8,252 in 2006. I’m still waiting for updated figures, but you get the idea.

These people were able to avoid paying taxes by the use of sophisticated tax strategies devised by high-priced and very professional tax planners, who guide their clients along the cracks in the Tax Code.

But, it’s not too difficult for you to get the same result.

This news article comes from Ashlea Ebeling and Janet Novack at partner Forbes:

Last week, Oregon voters approved a package of corporate tax hikes and an increase in the state's top individual income tax rate from 9% to 11%, putting the state in a tie with Hawaii for the highest state income tax rate in the nation. (Oregon is listed as second in Forbes’ list, however, because its 11% rate starts at a higher income level.)

The Oregon increases were first adopted by the legislature in July to cover a $773 million budget shortfall and then targeted for voter rejection by the referendum. In previous referendums, Oregonians had nixed tax increases that would have affected a majority of the population directly, notes the Washington-based Tax Foundation.

But this time the tax hike hit only corporations and 2% of individual income taxpayers -- couples with incomes above $250,000 and individuals earning more than $125,000. So voters blithely ignored the warnings of the state's most successful entrepreneur and its only Forbes 400 member, Nike founder and Chairman Phil Knight. He campaigned against the hikes, dubbing them "Oregon's Assisted Suicide Law II" and predicting that "thousands of our most successful residents will leave the state."

Does Oregon's vote mean more income tax hikes targeted at the "rich" are on the way? That's certainly what state employee unions, which backed the Oregon increase, and liberal leaning groups are hoping. And Jamie Yesnowitz, a senior manager in Grant Thornton's state and local tax group in Washington, D.C., thinks such hikes are very possible.

You gotta admire his chutzpah.

“Chutzpah” is a technical tax term that means, “Nice try … but no way we’re going to allow this deduction!”

Attorney William G. Halby, who practiced law for 20 years and specialized in taxation, went all the way to Tax Court. When the members stopped snickering, the Court said no.

Halby’s attempted medical deductions for visits to New York prostitutes and the costs of videos and other pornographic materials were not allowable under the Tax Code.

The president released his fiscal year 2011 budget Monday. As expected, the main focus has been on the immensity of the numbers.

If Obama gets everything he put in the 192-page document, it will cost us $3.8 trillion.

Don't worry. He won't get all his budget wishes. But it's still fun to look at some of the key tax provisions. Who knows, a couple might make it into law.

By Joe Mont, TheStreet

The old saw goes that no one can escape death and taxes. A pending fix to the nation's curiously missing estate tax will likely keep that cliche intact.

Currently, there is no estate tax on the books for 2010. In 2001, Congress, taking its lead from the Bush administration, approved a multi-year reduction of the rate and increased the exemption limit a deceased benefactor can leave to heirs tax-free. Last year, the final year of the relief package, set the exemption at $3.5 million and the top level tax hit was 45%. Even though the rate one again rises to 55%, with a $1 million exemption, in 2011, the current tax year was not covered by the 2001 legislation.

Although it was fully expected that Congress would pass a new rate for the missing year, a ramp-up to bridge the gap, it never happened. As 2009 drew to a close, the House of Representatives approved a new rate and exemption limit. The Senate, however, took no action.