BIN LADEN AND INCOME TAXES

You wouldn’t think that with the end of Osama Bin Laden, it would bring taxes to mind, but what can I say, I’m a tax guy.

There was an award of up to $25 million for information leading to his location. I had to ask myself, “I wonder if anybody qualified for the reward.” Then I got thinking... “would this be taxable?” “Would the guy get a 1099?” “Would this be foreign income subject to foreign tax?” Shoot, I actually lost some sleep thinking about this.

For those of you who also wondered about this, here are my thoughts: Payments to informers aren’t specifically exempt, and would therefore be included as taxable income. There’s a bit of “who’s going to know?” going on. Payments made to informers for terrorism are generally kept anonymous under the Rewards for Justice Program. They’re also not required to be reported to the IRS if they meet certain criteria. According to the instructions on form 1099-MISC:

A payment to an informer as an award, fee, or reward for information about criminal activity is not required to be reported if the payment is made by a federal, state, or local government agency, or by a nonprofit organization exempt from tax under section 501(c)(3) that makes the payment to further the charitable purpose of lessening the burdens of government. For more information, see Regulations section 1.6041-3(l).

So in summary, the reward would be considered taxable, but you will not get a 1099 so if you are the informant you are going to have to remember to include the reward on your 2011 tax return.

By the way… if you happen to be the informant… Thank You!

AMERICANS WORK 2 HOURS, 13 MINUTES A DAY TO PAY TAX

According to the Tax Foundation, in 2011, Americans will devote 2 hours and 13 minutes of every eight-hour workday, or over a quarter of their working hours (27.7%), to paying taxes. In a nine-to-five workday, it takes until 11:13 a.m. to earn enough to pay that day's share of taxes at the federal, state and local level.

If we add the federal deficit to the picture—that is, if the federal government were planning to collect enough in taxes during 2011 to finance all of it’s spending—Americans would work until lunchtime, 12:07 p.m., for the government, before keeping any of their earnings for themselves.

FULL HOME SALE EXCLUSION FOR SURVIVING SPOUSE

Q: My husband passed away 1 ½ years ago. Can I still claim the joint home sale exclusion if I roll over funds into another place?

A: Yes. The full $500,000 home sale exclusion (which is reduced to $250,000 for single filers) is still available for up to two years after the death of a spouse. But both spouses must meet the requirements of use and ownership of the home as a principal residence for at least two out of the five previous years. Also, a surviving spouse can’t remarry before the sale.

Tip: You don’t have to “roll over” funds into another home. The rollover requirement was eliminated years ago.

OBAMA FLOATS PLAN TO TAX CARS BY THE MILE

As a member of the State Chamber of Commerce Board of Directors, we often get into discussion on funding highway improvement and repairs. There just is not enough money to go around. Since the road budget is funded by the gasoline tax part of the problem is that people are buying hybrid and electric cars which don’t use as much gas and therefore do not pay as much in gas tax.

TheHill.com reports, "The Obama administration has floated a transportation authorization bill that would require the study and implementation of a plan to tax automobile drivers based on how many miles they drive." The story notes this comes after "a March Congressional Budget Office report that supported the idea of taxing drivers based on miles driven."

Among other things, CBO suggested that a vehicle miles traveled (VMT) tax could be tracked by installing electronic equipment on each car to determine how many miles were driven; payment could take place electronically at filling stations. The issue is that if there are GPS devises in our vehicles the government could keep tabs on where we are at all time. Kind of like George Orwell’s Big Brother.


http://thehill.com/blogs/floor-action/house/159397-obama-floats-plan-to-tax-cars-by-the-mile

RECEPTIONIST PAY

Q. My partner wants to let our current front desk person go and hire a person that will work for minimum wage. We pay our current receptionist $12.00 and she is really good. I would hate to lose our current girl. My partners says we can save a lot of money with the cheaper person. What do you think?

A. Pay peanuts and you get monkeys.

HAPPY MOTHERS DAY – WHAT MOTHER HAD THE MOST CHILDREN

Can you beat 69? The most children born to one mother, according to the Guinness Book of World Records, was a woman from Russia who gave birth to 16 pairs of twins, seven sets of triplets, and four sets of quadruplets. Don't expect the reality show too soon as this happened between the years 1725-1765.

WHERE DID MY TAX DOLLARS GO???

Have you ever wondered where it goes- and I don't mean for food and in your gas tank.

Check this out:
http://wheredidmytaxdollarsgo.com