Happy 235th
Why we celebrate today:
Historically, citizens of the world’s nations derived their rights from their ruler – a king, emperor or military dictator.
The colonists of the original thirteen colonies were weary. They’d been under the subjugation of Britain for years. They have had to live in fear of the British soldiers; they were under the rule of King George III. The Colonist had to abide by laws that had been enacted by that rule, and had to pay taxes; It was plain to see the British seemed to be getting richer, while the colonist were getting poorer.
Great Britain kept trying to make the colonists follow more rules and pay higher taxes. People started getting mad and began making plans to be able to make their own rules. They no longer wanted Great Britain to be able to tell them what to do, so they decided to tell Great Britain that they were becoming an independent country.
The Second Continental Congress met in Philadelphia, Pennsylvania and they appointed a committee to write a formal document that would tell Great Britain that the Americans had decided to govern themselves.
May 1776, Adams offered the resolution which set the wheels in motion toward the actual writing of the Declaration.
The committee asked Thomas Jefferson to write a draft of the document. Working on a portable desk of his own construction, in a room at Market and 7th Streets in Philadelphia, the 33 year-old Thomas Jefferson set on paper the grievances and aspirations of the 13 colonies –
Connecticut, Delaware, Georgia, Maryland, Massachusetts Bay, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Virginia.
1,337 words beginning with “When in the course of human events …”
He worked for days, in absolute secret, until he had written a document that he thought said everything important that the committee had discussed.
On June 28, 1776, the committee met to read Jefferson’s “fair” copy. They revised the document and declared their independence on July 2, 1776. They officially adopted it on July 4, 1776. That is why we call it “Independence Day.”
Congress ordered that all members must sign the Declaration of Independence and they all began signing the “official” copy on August 2, 1776.
56 men signed the document, pledging to support it with “our lives, our Fortunes and our sacred Honor.”
President John Hancock signed first and his signature was the largest. Putting down his pen, he quipped: “There. Now George the Third can read my name without spectacles, and may now double his reward of 500 pounds for my head. That is my defiance.”
In January of the next year, Congress sent signed copies to all of the states.
The Declaration declared a revolutionary new doctrine: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain inalienable rights that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed.”
It was a bold new concept that individual liberty was a birthright.
On July 4, 1777, the night sky of Philadelphia lit up with the blaze of bonfires. Candles illuminated the windows of houses and public buildings. Church bells rang out load, and cannons were shot from ships. The city was celebrating the first anniversary of the founding of the United States.
The Fourth of July soon became the main patriotic holiday of the entire country. Veterans of the Revolutionary War made a tradition of gathering on the Fourth to remember their victory. In towns and cities, the American flag flew; shops displayed red, white, and blue decorations; and people marched in parades that were followed by public readings of the Declaration of Independence.
In 1941, Congress declared July 4 a federal legal holiday.
The Declaration of Independence is more than just a piece of paper. It is a symbol of our country’s independence and commitment to certain ideas. The signers of the Declaration of Independence wanted the citizens of the United States to have a document that spelled out what was important to our leaders and citizens.
They wanted us to be able to look at the Declaration of Independence and immediately think of the goals we should always be working for, and about the people who have fought so hard to make these ideas possible.
The people who signed the Declaration risked being hanged for treason by the leaders in Great Britain. They had to be very brave to sign something that would be considered treason, a crime punishable by death!
So every time we look at the Declaration of Independence, we should think about all of the effort and ideas that went into the document, and about the courage it took for these people to stand up for what they knew was right — independence!
Our Independence.
Happy Birthday America.
I assembled this information from the question from my daughter, “why do we celebrate July 4th?”
Choosing the Right Representative: A Re-post
Rob Teuber is an attorney with the law firm Weiss Berzowski Brady LLP and author of the tax law blog www.federaltaxlawforum.com.
I deside to repost this as it would seem the information has been forgotten.
Choosing the Right Representative to Help You with Your Federal Tax Problems.
When you or your business is faced with tax problems it is a good idea to consider hiring a professional to help you navigate through the complex tax laws and procedures. The problem is often finding the representative that is right for you. Questions you may have include: Should I hire an accountant or lawyer? Do I need a local representative or does it matter where the person is based? What is the lawyer’s/accountant’s reputation?
As a lawyer myself, I will answer these questions in typical lawyer fashion: “It depends.”
First and foremost, you should choose a representative that is right for you. The personal relationship that you form with a representative is one of the most valuable criteria for hiring someone. It is important that both the representative and client trust one another, be on the same page as to the desired resolution of the problems and agree on the way to approach the IRS.
Accountant or Lawyer.
Generally, both accountants and lawyers are permitted to practice before the IRS. This means that either may help you in handling a tax audit, appeals of audit findings and tax collection matters. However, subject to certain exceptions, only lawyers can represent a client in court. Therefore, when making a decision on whom to hire, consider how far you are willing (or can afford) to push a case to get the resolution you are looking for. In moving through the process, having a lawyer involved will increase the risk to the IRS that litigation will actually occur. This may encourage a more favorable settlement. Further, if you think you will need the protection of the “Attorney – Client Privilege” while pursuing your case, you may want a lawyer instead of an accountant.
Do You Need a Local Representative.
In days gone by (before the IRS Restructuring and Reform Act of 1998 ) most tax related issues were handled by local IRS offices. The Restructuring Act, however, changed a lot of this by centralizing certain functions in different regions of the country. As such, local representation is less relevant than it used to be. Due to these landscape changes much of the work can easily be managed through conference calls and correspondence.
Knowledge and Reputation.
Of course, when choosing a representative to help you with your tax problems, you want to be sure that he or she has both the knowledge and reputation that can help you. Investigate the person to find out more about who you will be dealing with. If you are reading this post, you are likely already using the internet as a tool to find out more.
Most representatives will have a website. While informative, don’t rest completely on the representations made on that website. The website will list the accomplishments of the attorney/accountant and provide information on their skill set. Start here to find out if the person can do for you what you need. But don’t stop here.
Find out if the prospective representative has a blog. If so, spend some time reading through the blog to see if you are impressed with their knowledge of the tax laws and procedures. If so, this may be the right representative for you.
Use search engines to find out what you can about the representative’s reputation. While you won’t find a website called “here is a list of representatives and what the IRS thinks of them,” you will be able to find out whether the representative has written scholarly articles in industry magazines or business journals. This may be the best way to find out about one’s reputation. If a reputable journal will publish their work, there is a greater likelihood that the author has a good reputation.
Be mindful however, that specific and direct recommendations for a particular representative will likely be hard to come by. Most people don’t want to broadcast to the world that they or their business has had tax troubles.
The Ultimate Goal.
Ultimately, the goal is to find someone that is right for you. When doing so, consider the points made above. At the end of the day, you want to be comfortable with your choice and have confidence that you have hired the right person for the job.
Rob Teuber is an attorney with the law firm Weiss Berzowski Brady LLP and author of the tax law blog www.federaltaxlawforum.com.
Alltop
Well when I change my site around I fail to update over at Alltop. 
What is Alltop?
Alltop is sort of a “digital magazine rack of the Internet. To be clear, Alltop sites are starting points” the site provides categorized selections of links to blogs and other web resources that make it easy to scan a lot of information on a particular subject. For example the Taxespage lists many tax blogs with links to the most recent posts. Alltop is a valuable resource for anyone wanting to research, or just keep up on, well, stuff. If you have ever been to a real magazine rack you know. Click herefor more information on Alltop. Or go to their home page at Alltop.com to start checking out your favorite information.
I have resubmitted, and hope to be back there soon.
Test Your Faxing IQ this Tax Season
Like quizes? humm. How about a quest post desigened like a quiz?
By Steve Adams
Before email and filing tax returns online, there was the fax. At one time it was THE way to transmit important documents (such as W-2 statements and real estate tax information) quickly from one location to another.
While it’s normal to think that faxing has gone the way of the typewriter, it’s still a big part of the accounting world, and even the preferred method of document transfer in some cases.
So to make sure you have the most current information – and a good store of knowledge should you appear as a contestant on Jeopardy! and the Daily Double is a fax-related question – we offer the following quiz.
Fax Quiz
Q1. Faxing was invented in:
-
- 1843
- 1945
- 1972
- 1984
- The correct answer is A. 1843—almost 20 years before the first Federal income tax was levied. The technology didn’t really become common in offices until the mid-1980s, but the basic concept was patented more than 150 years prior by Alexander Bain.
Q2. The amount of money spent on faxing the last few years has:
-
- Increased
- Decreased
- Remained the same
- If you guessed B you’d be in good company. But you’d be wrong. The truth is the dollar volume spent on faxing has grown steadily over the last few years, and is projected to continue doing so.
Q3. Privacy laws allow you to send documents with a client’s Social Security Number on them by either email or fax:
-
- True
- False
- False, with a caveat. Social Security Number protection laws vary from state-to-state, but it is illegal in at least some states to transmit a document that contains an SSN via standard email because it is considered too insecure, i.e. email can be intercepted or misdirected too easily. Even if the law allows the use of email, though, it goes against the industry’s best practices for the same reasons. Faxes are immune to this type of interception by the nature of how they are transmitted. Internet fax services that provide 128-bit encryption provide an additional level of security.
Q4. The number of trees that could be saved each year by delivering just one percent (1%) of paper faxes in America as electronic documents is:
-
- 15 million
- 27.2 million
- 52.5 million
- 73.5 million
- It is 73.5 million. That’s just one percent in one country. In addition, moving from fax machines to an Internet fax service would save energy and cut down on the waste stream by eliminating the need to dispose of the machine, toner containers and wasted paper.
Q5. Some advantages of an Internet fax service over a fax machine are:
-
- No need to go back to the office to read your faxes
- Internet fax accounts never have busy signals on inbound faxes
- Because they’re electronic, your faxes can travel with you more easily
- Only A and C
- All of the above
- All of the above. Since Internet fax services are tied to your email account, you can receive faxes anywhere you can get email. That also means you can store your faxes on your laptop.
So how did you score? 4-5 correct: You are a faxing genius! 2-3 correct: You’re smarter than the average bear when it comes to faxes. 0-1 correct: Your old VCR is probably still flashing 12:00.
Steve Adams is vice president of marketing for Protus (www.protus.com), a provider of communications tools for small-to-medium-businesses and enterprise organizations, including the MyFax internet fax service; my1voice, a virtual phone service.
He can be reached at sadams@protus.com.
Thanks for the post Steve.
If you have a post that you think should be written for the “Taxing Public”, please send it my way, I will do my best to get it out.
IRS on Publication 17
Five Facts about IRS Publication 17
While the Internal Revenue Service provides publications about a wide range of topics, there is one publication every taxpayer should have with them when they are preparing their federal tax return. Publication 17, Your Federal Income Tax is available at IRS.gov and contains a wealth of information for individual taxpayers.
Here are the top five things the IRS wants you to know about Publication 17 and how it will come in handy when you prepare your taxes.
- The online version of Publication 17 contains electronic links that make finding your answer simple. Both the downloadable PDF and online 2009 Publication 17 have more than 6,000 hyperlinks.
- Publication 17 features details on recent tax law changes and legislation that can help you save money at tax time. You’ll find lots of helpful information about the American Recovery and Reinvestment Act of 2009, including the Making Work Pay Credit and the First-time Homebuyer Credit.
- This publication is packed with basic tax-filing information and tips on what income to report and how to report it. Publication 17 also includes information on figuring capital gains and losses, claiming dependents, choosing the standard deduction versus itemizing deductions, and using IRAs to save for retirement.
- Publication 17 is also available in Spanish. – Publicación 17 también está disponible en español. Formato pdf
- You can get a hard copy of Publication 17 for free. To get a copy, visit IRS.gov or call 800-TAX-FORM (800-829-3676).
Links:
- Publication 17, Your Federal Income Tax
- Publication 17, Your Federal Income Tax (PDF 2085K)
this is IRS Tax Tip 2010-18
You Should Know about the Making Work Pay Tax Credit
From IRS – Issue Number: IRS Tax Tip 2010-15
Ten Things You Should Know about the Making Work Pay Tax Credit
Many working taxpayers are eligible for the Making Work Pay Tax Credit, a provision created by the American Recovery and Reinvestment Act in early 2009.
Here are 10 things the IRS wants you to know about this tax credit to ensure you receive the entire amount for which you are eligible.
1. In 2009 and 2010, the Making Work Pay provision provides a refundable tax credit of up to $400 for individuals and up to $800 for married taxpayers filing joint returns.
2. For taxpayers who receive a paycheck and are subject to withholding, the credit will typically be handled by their employers through automated withholding changes.
3. Taxpayers receiving less than the full amount of the allowable credit through reduced withholding will be entitled to claim any remaining credit when they file their tax return.
4. The amount of the credit actually received during 2009 in the form of reduced withholding will be reported on your 2009 tax return. Taxpayers who do not have taxes withheld by an employer during the year can claim the credit on their 2009 tax return filed in 2010.
5. Taxpayers who file Form 1040 or 1040A will use Schedule M, Making Work Pay and Government Retiree Credits to figure the Making Work Pay Tax Credit. Completing Schedule M will help taxpayers determine whether they have already received the full credit in their paycheck or are due more money as a result of the credit.
6. Taxpayers who file Form 1040-EZ will use the worksheet for Line 8 on the back of the 1040-EZ to figure their Making Work Pay Tax Credit.
7. In 2010, you may notice that your paychecks are slightly lower than in 2009. The slight decrease may be because of the Making Work Pay Credit. Most of the credit for wage earners is distributed through reduced withholding. The credit – which was spread out over nine months last year – is being spread over 12 months this year. A little less credit in each paycheck means slightly higher withholding. But don’t worry, in the end it all adds up.
8. Certain taxpayers should review their tax withholding to ensure enough tax is being withheld in 2010. Those who should pay particular attention to their withholding include: married couples with two incomes, individuals with multiple jobs, dependents, pensioners, Social Security recipients who also work, and workers without valid Social Security numbers.
Having too little tax withheld could result in potentially smaller refunds or – in limited instances – small balance due rather than an expected refund.
9. To ensure your current withholding is appropriate for your individual situation, you can review Publication 919, How Do I Adjust My Tax Withholding? You can also perform a quick check of your withholding using the interactive IRS Withholding Calculator on IRS.gov.
10. If you find you need to adjust your withholding, submit a revised Form W-4, Employee’s Withholding Allowance Certificate to your employer.
Visit IRS.gov for more information about the making Work Pay Tax Credit, Schedule M, Form W-4 or Publication 919. You can also call 800-TAX-FORM (800-829-3676) to order forms and publications.
Links:
- The American Recovery and Reinvestment Act of 2009: Information Center
- Publication 919, How Do I Adjust My Withholding?
FYI: This credit is going to upset a lot of folks, please use caution.
Personal Finance 101: Budgeting – it doesn’t have to hurt
With the economy as it is and all that’s happening in our country and around the world, most people are looking for ways to save money, cut out waste, spend less, tighten their purse strings -whatever you want to call it. We all are trying to survive on less, to make more money or figure out ways to make what we have go further. I thought this post especially timely as the holiday season is upon us and many of us are wondering how Santa is going to make it all work this year.
There are a couple of basic things involved with managing your personal finances successfully; know how much money is coming in and how much money is going out; then make sure more is coming in then going out. It sounds easy enough but actually requires some careful planning.
A budget plan is a chart that shows you the flow of money in your everyday life. A budget can help you determine where you are overspending as well as help you adjust bad spending habits. Usually by making slight adjustments to your budget, you can create the ability to save more or free up money to make larger payments on your debts or at this time of year, buy presents for your family and friends. YAY for presents & smiles & fun & good food & egg nog!! Oops, I got a little carried away, back to the budgeting plan.
The first thing needed to create a successful budget plan is to know exactly the amount of net cash you have coming in each month. So start by gathering your paystubs, deposit slips, if you have reoccurring monthly bank deposits (alimony or child support pmts, SSA, pensions, etc). It’s a good idea to have either a monthly budget book or even an online planner. Even something as simple as an excel spreadsheet works, but you need something where you can record your expenditures and income. Start by keeping track of all your monthly living expenses and other monthly bills. There’s really no need to spend money on fancy budgeting software – you can go online and Google “budget plans” and you’ll find some great household budgets you can download, copy or print for free that are pretty good and will get you started. You can “tweak” it to fit your own expenses – there’s usually a couple miscellaneous categories already listed anyway. You can even do this on a piece of paper.
I always suggest that you start with the “known” or fixed expenses each month, like car payment(s), rent/house payment, car insurance, medical insurance, etc. and enter those. Then go to your bills that you need to get a 12-month average for, like your utilities. By looking back on your heating bills, phone & electric bills from the last year, you can get an average monthly amount and in many cases the utility companies will let you go on a monthly budget plan if that’s easier for you. If you don’t know or didn’t keep records of those bills for the last 12 months, most utility companies can get you those figures easy enough if you ask, in most cases at no cost to you, or a very minimal fee. Groceries are a little harder to determine as well as eating out so the best way for you to truly set an accurate budget is to track every single expense for at least one full month, usually two months in a row if you’re doing this for the first time or it’s been more than a couple of years since you’ve done a budget. I know it can be a pain in the behind but it helps you to get the most accurate picture of your finances and a place to begin and usually people find out they’re spending a lot more on things they don’t really need or didn’t know they were spending that much money on and it helps tremendously in giving you back control.
The other thing in creating an accurate budget plan is to remember to include all the little things most of us don’t think about, like buying a specialty coffee or latte on the way to work or a few lottery tickets a week or month, garbage pick-up, paper products, a drink or two out with friends, kids or adults lunch money each week. Lunch money can add up real quick as I found out in my house when my 3 daughters were all in 3 different schools and I was shelling out lunch money every morning. When I added it up, I had to add another category to my budget plan since it was over $150 per mth just for them! And yes sometimes I did pack their lunches but that still cost me on average $2-3 per day (about the same as hot lunch) so I still had to plan for and budget that in – and it wasn’t something I thought of at all at first.
You also really need to control your emotions and try not to “impulse buy”. I know…I know sometimes you just have to have that chocolate bar (ladies you know what I’m talkin’ about) or a Friday night beer or two after work, and by no means am I suggesting you cut out all those types of indulgences – after all, you work hard for your money and if you can’t buy a few frivilous fun things to relax or reward yourself once in awhile, then what’s it all for? I agree…but the point here is in order to make sure you have enough money at the end of a given month to be able to do those things while still paying all your bills and saving some money, then you have to first have an idea of what you’re spending and where. Most of the time people find they can save a substantial amount ($100′s per mth sometimes) by cutting out things that they really won’t even miss; like the morning latte. Or….still get a coffee on the way to work if that’s what you really like, but make it a regular for $1.50 instead of a specialty drink at $4. Or if you usually go out to lunch at work and you really enjoy it, try going out only 3 times per wk then pack some of the time. Or eat out where you know you’re likely to have leftovers. That way if it’s an $8 lunch but you can eat the rest the next day, then it now became a $4 lunch or give yourself a weekly “lunch out” budget. It might sound a bit silly but I know for me, as a single mother of 3, at times when things were so very lean, I had to do that to survive or be able to get birthday presents, and I still do the “weekly lunch out” thing – it just makes good sense to me. And none of this is complicated or has negatively impacted my daily life…I’m still feeling “fulfilled” each day whether I pack a sandwich and some fruit from home or got out with friends from work that day.
Remember to keep all receipts for 2 months and then you can go back and create an accurate budget plan. Then you can pick and choose for yourself where you want to cut things, change things in order to meet your financials goals. Whether it’s saving money for the future (which that’s a topic for another day) or coming up with money for Christmas or birthdays, a vacation fund or maybe it’s just being able to pay all your bills ontime and not feel so stressed. Whatever it is that you want to accomplish, ask yourself ”Do I really need to buy this? Can I cover it in my budget? Is it going to help me with my long term goals? Can I live without it today? We all hope to have discretionary income each month to have fun with but sometimes we have to learn to cut back temporarily (hobbies, entertainment, specialty clothes) to have more in the long run. I hope this helps – maybe even inspires you to get started today and hopefully add a few more presents under your tree this year.
Kimmer
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