According to economists the federal government will not be able to contain inflation because the government has pumped trillions of dollars in stimulus funds into the economy, the Federal Reserve will not be able to keep inflation in check in the next several years. While the central bank's unofficial inflation target is 2%, economists expect the price gauge tracked by the Fed to increase by an average of 3% annually from 2014 through 2018.
"An excessively stimulative fiscal policy and a complicated exit from its quantitative-easing policies over the medium term will result in the Fed tolerating a higher level of inflation than it desires," according to the National Association for Business Economics.
To see the entire article go to Bloomberg.
Wednesday, September 9, 2009
Tuesday, September 8, 2009
MISSPELLING YOUR NAME ON YOUR AIRLINE TICKET WILL NOW COST YOU $20-$150 OR MORE
American Airlines now charges 20 dollars to process a name correction (misspelled name). Even if you have to change one letter it is $20 bucks. Many people tend to use their nicknames when they buy a ticket and forget that they have to have the ticket match their government issued ID (drivers license or passport). A simple Chris to Kris will cost you $20. Steven to Stephen is $20. Matt to Mathew is also $20. Changing a complete name on most non-refundable tickets is not allowed.
Monday, September 7, 2009
IS CASH FOR CLUNKERS TAXABLE?
Larry, I heard on the radio that we will have to pay taxes on the money from the Cars for Clunkers. If so, I am really mad because nobody said we had to pay taxes on it. Is this true?
Robbet
Robbet, let's get this cleared up. No, the discount is not taxable to you the purchaser. Of course, if this is a business auto you cannot claim depreciation on the discount.A number of web sites and um, what’s the word, liars, opportunists, political wonks, media personalities, have indeed taken to the airwaves to try and stir the pot a little with respect to the CARS program. It certainly gets attention to scream that the program is some kind of secret tax-raising scheme. Only, they’re wrong. Think of it as a sale or discount: $4500 off! It’s not income to you, period.
Dealers are required to report the reimbursement from NHTSA as part of their gross income. This makes sense – they’re still grossing the same amount after the reimbursement. For example, if a dealer sells a $25,000 car to a customer for $22,000 ($25,000 less the CARS “discount” of $3,000), and the dealer next receives a check from NHTSA for $3,000, the dealer has still grossed $25,000. No harm, no foul. There’s no “extra” tax on the dealer, as has been reported. It’s the same reporting requirement as before.
But what about sales tax? In Nebraska they have ruled that the discount is subject to tax. Most states are not including the CARS portion for purposes of sales tax; there are a handful of states like Nebraska that are taking the position that the entire sale price, including the CARS portion, is subject to sales tax. You can check out which states are using this handy chart from Lexis. The good news?
It is a pleasure serving you.
Larry Kopsa CPA
Robbet
Robbet, let's get this cleared up. No, the discount is not taxable to you the purchaser. Of course, if this is a business auto you cannot claim depreciation on the discount.A number of web sites and um, what’s the word, liars, opportunists, political wonks, media personalities, have indeed taken to the airwaves to try and stir the pot a little with respect to the CARS program. It certainly gets attention to scream that the program is some kind of secret tax-raising scheme. Only, they’re wrong. Think of it as a sale or discount: $4500 off! It’s not income to you, period.
Dealers are required to report the reimbursement from NHTSA as part of their gross income. This makes sense – they’re still grossing the same amount after the reimbursement. For example, if a dealer sells a $25,000 car to a customer for $22,000 ($25,000 less the CARS “discount” of $3,000), and the dealer next receives a check from NHTSA for $3,000, the dealer has still grossed $25,000. No harm, no foul. There’s no “extra” tax on the dealer, as has been reported. It’s the same reporting requirement as before.
But what about sales tax? In Nebraska they have ruled that the discount is subject to tax. Most states are not including the CARS portion for purposes of sales tax; there are a handful of states like Nebraska that are taking the position that the entire sale price, including the CARS portion, is subject to sales tax. You can check out which states are using this handy chart from Lexis. The good news?
It is a pleasure serving you.
Larry Kopsa CPA
Friday, September 4, 2009
DEDUCTIONS WHEN LOOKING FOR A JOB
Larry, thanks for all the great information. My wife just got transferred to Arkansas so in order to stay with her I need to find a new job. Are there any deductions for job hunting?
Theodore
Theodore, thanks for the kind words. I hope that you are successful in finding a new job. Here is the information that you need on job hunting expenses.
1. In order to deduct job search costs, the expenses must be spent on a job search in your current occupation. You may not deduct expenses incurred while looking for a job in a new occupation.
2. You can deduct employment and outplacement agency fees you pay while looking for a job in your present occupation. If your employer pays you back in a later year for employment agency fees, you must include the amount you receive in your gross income up to the amount of your tax benefit in the earlier year.
3. You can deduct amounts you spend for preparing and mailing copies of a résumé to prospective employers as long as you are looking for a new job in your present occupation.
4. If you travel to an area to look for a new job in your present occupation, you may deduct travel expenses to and from the area. You can only deduct the travel expenses if the trip is primarily to look for a new job. The amount of time you spend on personal activity compared to the amount of time you spend looking for work is important in determining whether the trip is primarily personal or is primarily to look for a new job.
5. You cannot deduct job search expenses if there was a substantial break between the end of your last job and the time you begin looking for a new one.
6. You cannot deduct job search expenses if you are looking for a job for the first time.These expenses are only deductible if you itemize your deductions (long form).
You also need to keep in mind that the tax laws also allow a deduction for moving expenses. Let me know if you have any questions on moving expenses.
It is a pleasure serving you.
Larry Kopsa CPA
Theodore
Theodore, thanks for the kind words. I hope that you are successful in finding a new job. Here is the information that you need on job hunting expenses.
1. In order to deduct job search costs, the expenses must be spent on a job search in your current occupation. You may not deduct expenses incurred while looking for a job in a new occupation.
2. You can deduct employment and outplacement agency fees you pay while looking for a job in your present occupation. If your employer pays you back in a later year for employment agency fees, you must include the amount you receive in your gross income up to the amount of your tax benefit in the earlier year.
3. You can deduct amounts you spend for preparing and mailing copies of a résumé to prospective employers as long as you are looking for a new job in your present occupation.
4. If you travel to an area to look for a new job in your present occupation, you may deduct travel expenses to and from the area. You can only deduct the travel expenses if the trip is primarily to look for a new job. The amount of time you spend on personal activity compared to the amount of time you spend looking for work is important in determining whether the trip is primarily personal or is primarily to look for a new job.
5. You cannot deduct job search expenses if there was a substantial break between the end of your last job and the time you begin looking for a new one.
6. You cannot deduct job search expenses if you are looking for a job for the first time.These expenses are only deductible if you itemize your deductions (long form).
You also need to keep in mind that the tax laws also allow a deduction for moving expenses. Let me know if you have any questions on moving expenses.
It is a pleasure serving you.
Larry Kopsa CPA
Thursday, September 3, 2009
Wednesday, September 2, 2009
WHEN SHOULD I START TAKING SOCIAL SECURITY BENEFITS?
Do you think I should start drawing Social Security at age 62?
Bill
Bill, deciding when to start drawing Social Security has too many variables for me to give you a correct answer. There is a very good article addressing this issue in the AARP website
http://bulletin.aarp.org/yourmoney/socialsecurity/articles/when_to_collect_social_security.html
The article directs you to the Social Security Calculator that is located at http://www.ssa.gov/planners/calculators.htm
Remember if you start taking Social Security early you can only have earned income of $14,160 in 2009 or you will have to pay back $1 for every $2 over this amount.
Your accountant or the Social Security Administration should be able to provide you with more assistance on this matter.
Larry Kopsa CPA
Bill
Bill, deciding when to start drawing Social Security has too many variables for me to give you a correct answer. There is a very good article addressing this issue in the AARP website
http://bulletin.aarp.org/yourmoney/socialsecurity/articles/when_to_collect_social_security.html
The article directs you to the Social Security Calculator that is located at http://www.ssa.gov/planners/calculators.htm
Remember if you start taking Social Security early you can only have earned income of $14,160 in 2009 or you will have to pay back $1 for every $2 over this amount.
Your accountant or the Social Security Administration should be able to provide you with more assistance on this matter.
Larry Kopsa CPA
Tuesday, September 1, 2009
GOVERNMENT TRUE-ISMS
A liberal is someone who feels a great debt to his fellow man ..which debt he proposes to pay off with your money. -G. Gordon Liddy
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