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By raising the age for Social Security, most people would opt to work longer rather then just shooting for that one age where we are all told we are done for the rest of our life. The problem I have is who are these people that dictate how long we can work?
And, by the way, eliminate the early retirement age of 62, or if you want to retire early, and want benefits, you will get significantly less money then if you work all the way to 67 or 69. It will be a choice.
Benefits at What Age?
Source: Liqun Liu, Andrew J. Rettenmaier, and Thomas R. Saving, "Lifetime Income, Longevity and Social Security Progressivity," National Center for Policy Analysis, December 2012.
December 11, 2012
Should we raise the age of eligibility for Social Security and Medicare? Life expectancy has increased seven years since 1970. So, should the eligibility age be raised seven years as well? One problem. Over the past 20 years, life expectancy at age 65 has risen five years for men with above average income but only one year for men with below average income.
In a new study, NCPA Senior Fellow and former Social Security and Medicare Trustee Thomas Saving and NCPA Senior Fellow Andrew Rettenmaier explain how we can skirt this problem: raise the age of eligibility for Social Security and at the same time make the benefit formula more progressive. For Medicare, you could make the premium payments more progressive.
The authors find:
•Once longevity differences are accounted for, Social Security's progressivity is lessened, relative to estimates based on average longevity estimates by birth year.
•However, even for the most recent group of new retirees analyzed, the program remains progressive.
•Further, the study finds that within birth years, the program redistributes from high to low earning workers, even after accounting for income-related differences in longevity.
Combining an increase in the retirement age for all workers with an adjustment to the benefit formula would result in a program that could be financed in the long run at the current tax rate and would retain the program's relative lifetime progressivity.
Progressive price indexing is a reform by which low-income workers' past earnings continue to be indexed by average wages whereas high income workers earnings would be indexed by price level changes. Progressive price indexing would further address concerns about the growth in total benefit payments while retaining and perhaps enhancing the system's progressivity.
11 Aralık 2012 Salı
Green Energy Fails to Connect With Reality : Who Knew?
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More bad news for green energy but then most of us, that are awake in the real world, knew this from the start. It's only those that are invested in population control that want unilateral energy changes. That the new energy sources are not viable means nothing, it's the ability to dictate outcomes by controlling how people live. It's as simple as that.
Ask the question as to who is driving the green energy program that has failed on all fronts and what are the rewards for doing so? The answer is always the same, progressive socialist Democrats, you know, the ones that were just sent back to Washington for 4 more years of high gas prices and food prices that are driving families into poverty.
Think of it as giving a certain group of elites one more chance to crush the American dream. Remember this line from the campaign in 2008, " I want to fundamentally change this country".
What rational did the voter use to want more financial disaster, less income and less personal freedom to choose one's own destiny? Who actually voted for this nightmare?
The Impossibility of Rapid Energy Transitions
Source: Kenneth P. Green, "The Impossibility of Rapid Energy Transitions," The American, December 6, 2012.
December 11, 2012
For decades, politicians have made promises of transitioning to cleaner, more sustainable sources of energy. National security is also a justification that politicians have employed in an effort to garner support for energy transitions. Even now, there is a transition from imported oil and coal to natural gas power plants, says Kenneth P. Green, a senior fellow with Canada's Fraser Institute.
However, despite promises and billions of dollars spent on trying to start an energy revolution, little has been achieved. This is largely because the technology can be very expensive. But more importantly, these technologies don't have the momentum behind them to create an energy transition.
There are three different types of momentum that are necessary when talking about making energy transitions:
•Technological momentum -- When the impact of a technology reaches far beyond itself. For example, the light bulb spawned thousands of variations of it, which led to entire buildings having light fixtures.
•Labor-pool momentum -- The necessary supply of trained talent to enable a transition to other energy sources. This is important because their needs to be specialized engineers, designers, regulators and operators that are needed in the new energy industry.
•Economic momentum -- The costs of development are extremely high and have lengthy lifespans which means that it takes a long time before the costs have been recovered, making it difficult to find investors.
Ask the question as to who is driving the green energy program that has failed on all fronts and what are the rewards for doing so? The answer is always the same, progressive socialist Democrats, you know, the ones that were just sent back to Washington for 4 more years of high gas prices and food prices that are driving families into poverty.
Think of it as giving a certain group of elites one more chance to crush the American dream. Remember this line from the campaign in 2008, " I want to fundamentally change this country".
What rational did the voter use to want more financial disaster, less income and less personal freedom to choose one's own destiny? Who actually voted for this nightmare?
The Impossibility of Rapid Energy Transitions
Source: Kenneth P. Green, "The Impossibility of Rapid Energy Transitions," The American, December 6, 2012.
December 11, 2012
For decades, politicians have made promises of transitioning to cleaner, more sustainable sources of energy. National security is also a justification that politicians have employed in an effort to garner support for energy transitions. Even now, there is a transition from imported oil and coal to natural gas power plants, says Kenneth P. Green, a senior fellow with Canada's Fraser Institute.
However, despite promises and billions of dollars spent on trying to start an energy revolution, little has been achieved. This is largely because the technology can be very expensive. But more importantly, these technologies don't have the momentum behind them to create an energy transition.
There are three different types of momentum that are necessary when talking about making energy transitions:
•Technological momentum -- When the impact of a technology reaches far beyond itself. For example, the light bulb spawned thousands of variations of it, which led to entire buildings having light fixtures.
•Labor-pool momentum -- The necessary supply of trained talent to enable a transition to other energy sources. This is important because their needs to be specialized engineers, designers, regulators and operators that are needed in the new energy industry.
•Economic momentum -- The costs of development are extremely high and have lengthy lifespans which means that it takes a long time before the costs have been recovered, making it difficult to find investors.
Green Energy Nighmare : 4 More Years of Failure
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Again, green energy is a failure and it's being forced on us by the current progressive socialists that now have just been reelected. Green energy is costing all of us billions and will cost all of us billions more with results that are no different then what we all saw in the first four years of 'The One'.
Who voted for this? Are they uninformed or just plain ignorant. When you see your power bill "sky rocket" as promised by Mr Obama, you decide if this was smart or insane!
The Failure of Wind Power
Source: Kevin D. Williamson, "Deval-used Wind Power," National Review Online, December 3, 2012.
December 11, 2012
Some politicians, like Massachusetts Governor Deval Patrick, are very ambitious about the role of alternative energy in electricity generation. His goal for the state is to produce 2,000 megawatts of power from alternative energy sources by 2020, says Kevin D. Williamson of the National Review.
Patrick expects wind power to be a major alternative source. However, as the general manager of the local utility authority in Princeton, Mass., describes, many wind-energy projects are failures.
•Princeton Municipal Light Department's wind-energy project has lost nearly $2 million.
•Customers of this utility company pay more in their electricity bill than the average customer -- totaling nearly $744,000 in 2011.
•Moreover, the general manager projects the project to lose $600,000 a year.
The projected yearly losses don't assume changes in wholesale electricity rates or repair costs, which can be extravagant.
•Original warranties on turbines have expired and extended warranty options are not available.
•This is problematic considering that the cost of replacing a gearbox, for instance, is estimated at $600,000.
•About $40 billion worth of wind turbines will go out of warranty by the end of 2012.
Additionally, wind turbines are out of commission more than 20 percent of the time -- only 0.5 percent of that time accounts for regularly scheduled maintenance. This makes it difficult for companies to produce cheap energy to consumers.
On top of the costs of utility losses and the price of subsidies, companies forgo investments in more economically viable projects. Rather than have the government provide incentives for certain ventures, market forces can direct companies and public officials to make sound investments. For example, agricultural and industrial users have more to gain from wind-energy projects than municipal utilities.
In some cases, wind energy has proven an economical investment. Valero installed a massive wind farm at its refinery in Texas that generates enough electricity for the entire complex. Furthermore, equipment used to run Marcellus Shale gas runs off solar power.
In both cases, the firms were willing to invest in the alternative energy because it was economical, not because the government provided incentives.
Who voted for this? Are they uninformed or just plain ignorant. When you see your power bill "sky rocket" as promised by Mr Obama, you decide if this was smart or insane!
The Failure of Wind Power
Source: Kevin D. Williamson, "Deval-used Wind Power," National Review Online, December 3, 2012.
December 11, 2012
Some politicians, like Massachusetts Governor Deval Patrick, are very ambitious about the role of alternative energy in electricity generation. His goal for the state is to produce 2,000 megawatts of power from alternative energy sources by 2020, says Kevin D. Williamson of the National Review.
Patrick expects wind power to be a major alternative source. However, as the general manager of the local utility authority in Princeton, Mass., describes, many wind-energy projects are failures.
•Princeton Municipal Light Department's wind-energy project has lost nearly $2 million.
•Customers of this utility company pay more in their electricity bill than the average customer -- totaling nearly $744,000 in 2011.
•Moreover, the general manager projects the project to lose $600,000 a year.
The projected yearly losses don't assume changes in wholesale electricity rates or repair costs, which can be extravagant.
•Original warranties on turbines have expired and extended warranty options are not available.
•This is problematic considering that the cost of replacing a gearbox, for instance, is estimated at $600,000.
•About $40 billion worth of wind turbines will go out of warranty by the end of 2012.
Additionally, wind turbines are out of commission more than 20 percent of the time -- only 0.5 percent of that time accounts for regularly scheduled maintenance. This makes it difficult for companies to produce cheap energy to consumers.
On top of the costs of utility losses and the price of subsidies, companies forgo investments in more economically viable projects. Rather than have the government provide incentives for certain ventures, market forces can direct companies and public officials to make sound investments. For example, agricultural and industrial users have more to gain from wind-energy projects than municipal utilities.
In some cases, wind energy has proven an economical investment. Valero installed a massive wind farm at its refinery in Texas that generates enough electricity for the entire complex. Furthermore, equipment used to run Marcellus Shale gas runs off solar power.
In both cases, the firms were willing to invest in the alternative energy because it was economical, not because the government provided incentives.
Get ready for the new year with January's Tax Due Date Reminders!
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The staff at Holdsworth & Co. joins you in saying goodbye to 2011 and ringing in a healthy and prosperous 2012!
Thanks for visiting our recently launched blogsite. As we begin the new year, we want to help keep you on course with a list of tax due date reminders for January. We're happy to answer any of your questions and are just a phone call away.
The staff at Holdsworth & Co. joins you in saying goodbye to 2011 and ringing in a healthy and prosperous 2012!
Thanks for visiting our recently launched blogsite. As we begin the new year, we want to help keep you on course with a list of tax due date reminders for January. We're happy to answer any of your questions and are just a phone call away.
| January 10 | Employees - who work for tips. If you received $20 or more in tips during December, report them to your employer. You can use Form 4070, Employee's Report of Tips to Employer. |
| January 17 | Employers - Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in December 2011.Individuals - Make a payment of your estimated tax for 2011 if you did not pay your income tax for the year through withholding (or did not pay in enough tax that way). Use Form 1040-ES. This is the final installment date for 2011 estimated tax. However, you do not have to make this payment if you file your 2011 return (Form 1040) and pay any tax due by January 31, 2012.Employers - Nonpayroll Withholding. If the monthly deposit rule applies, deposit the tax for payments in December 2011.Farmers and Fishermen - Pay your estimated tax for 2011 using Form 1040-ES. You have until April 17 to file your 2011 income tax return (Form 1040). If you do not pay your estimated tax by January 17, you must file your 2011 return and pay any tax due by March 1, 2012, to avoid an estimated tax penalty. |
| January 31 | Employers - Give your employees their copies of Form W-2 for 2011 by January 31, 2012. If an employee agreed to receive Form W-2 electronically, post it on a website accessible to the employee and notify the employee of the posting by January 31.Businesses - Give annual information statements to recipients of 1099 payments made during 2011.Employers - Federal unemployment tax. File Form 940 for 2011. If your undeposited tax is $500 or less, you can either pay it with your return or deposit it. If it is more than $500, you must deposit it. However, if you already deposited the tax for the year in full and on time, you have until February 10 to file the return.Employers - Social Security, Medicare, and withheld income tax. File Form 941 for the fourth quarter of 2011. Deposit any undeposited tax. (If your tax liability is less than $2,500, you can pay it in full with a timely filed return.) If you deposited the tax for the quarter in full and on time, you have until February 10 to file the return.Employers - Nonpayroll taxes. File Form 945 to report income tax withheld for 2011 on all nonpayroll items, including backup withholding and withholding on pensions, annuities, IRAs, gambling winnings, and payments of Indian gaming profits to tribal members. Deposit any undeposited tax. (If your tax liability is less than $2,500, you can pay it in full with a timely filed return.) If you deposited the tax for the year in full and on time, you have until February 10 to file the return.Individuals - who must make estimated tax payments. If you did not pay your last installment of estimated tax by January 17, you may choose (but are not required) to file your income tax return (Form 1040) for 2011. Filing your return and paying any tax due by January 31 prevents any penalty for late payment of last installment.Payers of Gambling Winnings - If you either paid reportable gambling winnings or withheld income tax from gambling winnings, give the winners their copies of Form W-2G.Certain Small Employers - File Form 944 to report Social Security and Medicare taxes and withheld income tax for 2011. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is $2,500 or more from 2011 but less than $2,500 for the fourth quarter, deposit any undeposited tax or pay it in full with a timely filed return. |
Discover Your Pot o' Gold...in Your Tax Deductible Vacation!
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Tim, who owns his own business, decided he wanted to take a two-week trip around the US. So he did--and was able to legally deduct every dime that he spent on his "vacation". Here's how he did it.
1. Make all your business appointments before you leave for your trip.
Most people believe that they can go on vacation and simply hand out their business cards in order to make the trip deductible.
Wrong.
You must have at least one business appointment before you leave in order to establish the "prior set business purpose" required by the IRS. Keeping this in mind, before he left for his trip, Tim set up appointments with business colleagues in the various cities that he planned to visit.
Let's say Tim is a manufacturer of green office products looking to expand his business and distribute more product. One possible way to establish business contacts--if he doesn't already have them--is to place advertisements looking for distributors in newspapers in each location he plans to visit. He could then interview those who respond when he gets to the business destination.
In order to deduct all of your on-the-road business expenses, you must be traveling on business. The IRS states that travel expenses are 100% deductible as long as your trip is business related and you are traveling away from your regular place of business longer than an ordinary day's work and you need to sleep or rest to meet the demands of your work while away from home.
For every day you are on business travel, you can deduct 100% of lodging, tips, car rentals, and 50% of your food. Tim spends three days meeting with potential distributors. If he spends $50 a day for food, he can deduct 50% of this amount, or $25.
If you have a business day on Friday and another one on Monday, you can deduct all on-the-road expenses during the weekend.
The IRS says that you can deduct transportation expenses if business is the primary purpose of the trip. A majority of days in the trip must be for business activities, otherwise, you cannot make any transportation deductions.
Since Tim accrued six business days, he could spend another five days having fun and still deduct all his transportation to San Diego. The reason is that the majority of the days were business days (six out of eleven). However, he can only deduct six days worth of lodging, dry cleaning, shoe shines, and tips. The important point is that Tim would be spending money on lodging, airfare, and food, but now most of his expenses will become deductible.
Consult us before you plan your next trip. We'll show you the right way to legally deduct your vacation when you combine it with business. Bon Voyage!
Tim, who owns his own business, decided he wanted to take a two-week trip around the US. So he did--and was able to legally deduct every dime that he spent on his "vacation". Here's how he did it.
1. Make all your business appointments before you leave for your trip.
Most people believe that they can go on vacation and simply hand out their business cards in order to make the trip deductible.
Wrong.
You must have at least one business appointment before you leave in order to establish the "prior set business purpose" required by the IRS. Keeping this in mind, before he left for his trip, Tim set up appointments with business colleagues in the various cities that he planned to visit.
Let's say Tim is a manufacturer of green office products looking to expand his business and distribute more product. One possible way to establish business contacts--if he doesn't already have them--is to place advertisements looking for distributors in newspapers in each location he plans to visit. He could then interview those who respond when he gets to the business destination.
In order to deduct all of your on-the-road business expenses, you must be traveling on business. The IRS states that travel expenses are 100% deductible as long as your trip is business related and you are traveling away from your regular place of business longer than an ordinary day's work and you need to sleep or rest to meet the demands of your work while away from home.
For every day you are on business travel, you can deduct 100% of lodging, tips, car rentals, and 50% of your food. Tim spends three days meeting with potential distributors. If he spends $50 a day for food, he can deduct 50% of this amount, or $25.
If you have a business day on Friday and another one on Monday, you can deduct all on-the-road expenses during the weekend.
The IRS says that you can deduct transportation expenses if business is the primary purpose of the trip. A majority of days in the trip must be for business activities, otherwise, you cannot make any transportation deductions.
Since Tim accrued six business days, he could spend another five days having fun and still deduct all his transportation to San Diego. The reason is that the majority of the days were business days (six out of eleven). However, he can only deduct six days worth of lodging, dry cleaning, shoe shines, and tips. The important point is that Tim would be spending money on lodging, airfare, and food, but now most of his expenses will become deductible.
Consult us before you plan your next trip. We'll show you the right way to legally deduct your vacation when you combine it with business. Bon Voyage!
 |
| Dublin, Ireland |
Tim, who owns his own business, decided he wanted to take a two-week trip around the US. So he did--and was able to legally deduct every dime that he spent on his "vacation". Here's how he did it.
1. Make all your business appointments before you leave for your trip.
Most people believe that they can go on vacation and simply hand out their business cards in order to make the trip deductible.
Wrong.
You must have at least one business appointment before you leave in order to establish the "prior set business purpose" required by the IRS. Keeping this in mind, before he left for his trip, Tim set up appointments with business colleagues in the various cities that he planned to visit.
Let's say Tim is a manufacturer of green office products looking to expand his business and distribute more product. One possible way to establish business contacts--if he doesn't already have them--is to place advertisements looking for distributors in newspapers in each location he plans to visit. He could then interview those who respond when he gets to the business destination.
Example: Tim wants to vacation in Hawaii. If he places several advertisements for distributors, or contacts some of his downline distributors to perform a presentation, then the IRS would accept his trip for business.
Tip: It would be vital for Tim to document this business purpose by keeping a copy of the advertisement and all correspondence along with noting what appointments he will have in his diary.2. Make Sure your Trip is All "Business Travel."
In order to deduct all of your on-the-road business expenses, you must be traveling on business. The IRS states that travel expenses are 100% deductible as long as your trip is business related and you are traveling away from your regular place of business longer than an ordinary day's work and you need to sleep or rest to meet the demands of your work while away from home.
Example: Tim wanted to go to a regional meeting in Boston, which is only a one-hour drive from his home. If he were to sleep in the hotel where the meeting will be held (in order to avoid possible automobile and traffic problems), his overnight stay qualifies as business travel in the eyes of the IRS.
Tip: Remember: You don't need to live far away to be on business travel. If you have a good reason for sleeping at your destination, you could live a couple of miles away and still be on travel status.3. Make sure that you deduct all of your on-the-road -expenses for each day you're away.
For every day you are on business travel, you can deduct 100% of lodging, tips, car rentals, and 50% of your food. Tim spends three days meeting with potential distributors. If he spends $50 a day for food, he can deduct 50% of this amount, or $25.
Tip:The IRS doesn't require receipts for travel expense under $75 per expense--except for lodging.
Example: If Tim pays $6 for drinks an the plane, $6.95 for breakfast, $12.00 for lunch, $50 for dinner, he does not need receipts for anything since each item was under $75.
Tip: He would, however, need to document these items in your diary. A good tax diary is essential in order to audit-proof your records. Adequate documentation shall consist of amount, date, place and business reason for the expense.
Example: If, however, Tim stays in the Bates Motel and spends $22 on lodging, will he need a receipt? The answer is yes. You need receipts for all paid lodging.
Tip: Not only are your on-the-road expenses deductible from your trip, but also all laundry, shoe shines, manicures, and dry-cleaning costs for clothes worn on the trip. Thus, your first dry cleaning bill that you incur when you get home will be fully deductible. Make sure that you keep the dry cleaning receipt and have your clothing dry cleaned within a day or two of getting home.4. Sandwich weekends between business days.
If you have a business day on Friday and another one on Monday, you can deduct all on-the-road expenses during the weekend.
Example: Tim makes business appointments in Florida on Friday and one on the following Monday. Even though he has no business on Saturday and Sunday, he may deduct on-the-road business expenses incurred during the weekend.5. Make the majority of your trip days business days.
The IRS says that you can deduct transportation expenses if business is the primary purpose of the trip. A majority of days in the trip must be for business activities, otherwise, you cannot make any transportation deductions.
Example: Tim spends six days in San Diego. He leaves early on Thursday morning. He had a seminar on Friday and meets with distributors on Monday and flies home on Tuesday, taking the last flight of the day home after playing a complete round of golf. How many days are considered business days?All of them. Thursday is a business day, since it includes traveling - even if the rest of the day is spent at the beach. Friday is a business day because he had a seminar. Monday is a business day because he met with prospects and distributors in pre-arranged appointments. Saturday and Sunday are sandwiched between business days, so they count, and Tuesday is a travel day.
Since Tim accrued six business days, he could spend another five days having fun and still deduct all his transportation to San Diego. The reason is that the majority of the days were business days (six out of eleven). However, he can only deduct six days worth of lodging, dry cleaning, shoe shines, and tips. The important point is that Tim would be spending money on lodging, airfare, and food, but now most of his expenses will become deductible.
Consult us before you plan your next trip. We'll show you the right way to legally deduct your vacation when you combine it with business. Bon Voyage!
Tim, who owns his own business, decided he wanted to take a two-week trip around the US. So he did--and was able to legally deduct every dime that he spent on his "vacation". Here's how he did it.
1. Make all your business appointments before you leave for your trip.
Most people believe that they can go on vacation and simply hand out their business cards in order to make the trip deductible.
Wrong.
You must have at least one business appointment before you leave in order to establish the "prior set business purpose" required by the IRS. Keeping this in mind, before he left for his trip, Tim set up appointments with business colleagues in the various cities that he planned to visit.
Let's say Tim is a manufacturer of green office products looking to expand his business and distribute more product. One possible way to establish business contacts--if he doesn't already have them--is to place advertisements looking for distributors in newspapers in each location he plans to visit. He could then interview those who respond when he gets to the business destination.
Example: Tim wants to vacation in Hawaii. If he places several advertisements for distributors, or contacts some of his downline distributors to perform a presentation, then the IRS would accept his trip for business.
Tip: It would be vital for Tim to document this business purpose by keeping a copy of the advertisement and all correspondence along with noting what appointments he will have in his diary.2. Make Sure your Trip is All "Business Travel."
In order to deduct all of your on-the-road business expenses, you must be traveling on business. The IRS states that travel expenses are 100% deductible as long as your trip is business related and you are traveling away from your regular place of business longer than an ordinary day's work and you need to sleep or rest to meet the demands of your work while away from home.
Example: Tim wanted to go to a regional meeting in Boston, which is only a one-hour drive from his home. If he were to sleep in the hotel where the meeting will be held (in order to avoid possible automobile and traffic problems), his overnight stay qualifies as business travel in the eyes of the IRS.
Tip: Remember: You don't need to live far away to be on business travel. If you have a good reason for sleeping at your destination, you could live a couple of miles away and still be on travel status.3. Make sure that you deduct all of your on-the-road -expenses for each day you're away.
For every day you are on business travel, you can deduct 100% of lodging, tips, car rentals, and 50% of your food. Tim spends three days meeting with potential distributors. If he spends $50 a day for food, he can deduct 50% of this amount, or $25.
Tip:The IRS doesn't require receipts for travel expense under $75 per expense--except for lodging.
Example: If Tim pays $6 for drinks an the plane, $6.95 for breakfast, $12.00 for lunch, $50 for dinner, he does not need receipts for anything since each item was under $75.
Tip: He would, however, need to document these items in your diary. A good tax diary is essential in order to audit-proof your records. Adequate documentation shall consist of amount, date, place and business reason for the expense.
Example: If, however, Tim stays in the Bates Motel and spends $22 on lodging, will he need a receipt? The answer is yes. You need receipts for all paid lodging.
Tip: Not only are your on-the-road expenses deductible from your trip, but also all laundry, shoe shines, manicures, and dry-cleaning costs for clothes worn on the trip. Thus, your first dry cleaning bill that you incur when you get home will be fully deductible. Make sure that you keep the dry cleaning receipt and have your clothing dry cleaned within a day or two of getting home.4. Sandwich weekends between business days.
If you have a business day on Friday and another one on Monday, you can deduct all on-the-road expenses during the weekend.
Example: Tim makes business appointments in Florida on Friday and one on the following Monday. Even though he has no business on Saturday and Sunday, he may deduct on-the-road business expenses incurred during the weekend.5. Make the majority of your trip days business days.
The IRS says that you can deduct transportation expenses if business is the primary purpose of the trip. A majority of days in the trip must be for business activities, otherwise, you cannot make any transportation deductions.
Example: Tim spends six days in San Diego. He leaves early on Thursday morning. He had a seminar on Friday and meets with distributors on Monday and flies home on Tuesday, taking the last flight of the day home after playing a complete round of golf. How many days are considered business days?All of them. Thursday is a business day, since it includes traveling - even if the rest of the day is spent at the beach. Friday is a business day because he had a seminar. Monday is a business day because he met with prospects and distributors in pre-arranged appointments. Saturday and Sunday are sandwiched between business days, so they count, and Tuesday is a travel day.
Since Tim accrued six business days, he could spend another five days having fun and still deduct all his transportation to San Diego. The reason is that the majority of the days were business days (six out of eleven). However, he can only deduct six days worth of lodging, dry cleaning, shoe shines, and tips. The important point is that Tim would be spending money on lodging, airfare, and food, but now most of his expenses will become deductible.
Consult us before you plan your next trip. We'll show you the right way to legally deduct your vacation when you combine it with business. Bon Voyage!
8 Aralık 2012 Cumartesi
2012Q3 GDP: An Upward Revision, As Expected
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We were really amused to read Ed Morrissey's lead in his take on the BEA's release of its second estimate for how much the U.S. economy grew in the third quarter of 2012:
When I wrote about the advance estimate from the Commerce Department on Q3 GDP hitting 2.0%, some commenters warned that the report — which came out just before the election — would be sharply revised after it. They were right, although the revision went in the opposite direction they suspected. The revised Q3 GDP number jumped upward to 2.7%, the best quarter of the year, although still substantially a stagnation number, especially when one sees the source of the growth
While Ed then goes on to note the role of government spending and particularly defense spending in boosting the GDP growth rate for the quarter, we really can't help wonder who the commenters who picked the wrong direction for the revision are.
Because clearly, they aren't us! Here's what we wrote nearly one month ago:
As we expected, economic growth in the United States picked up in the third quarter of 2012, increasing from the annualized growth rate of 1.3% recorded in 2012-Q2 to 2.0% in the BEA's initial GDP estimate for 2012-Q3.
We had forecast that real GDP would be recorded at $13,602.8 billion in terms of constant 2005 U.S. dollars, and the BEA's initial estimate came in at $13,616.2 billion - a difference of $13.4 billion, or within 0.01% of the BEA's recorded figure.
The BEA will revise this figure twice more before the end of the year. We anticipate that it will be adjusted upward, as the third quarter of 2012 likely recorded the U.S.' strongest economic performance for the year.
And here's what we wrote nearly a month before that:
Although we're coming off a quarter where the U.S. economy could reasonably be described as being in a "microrecession", as we had long expected, we anticipate that the GDP growth rate will be stronger in the third quarter of 2012 by comparison. Going by the dividend futures data we've had available since November 2011, the third quarter of 2012 has always looked as if it would be the strongest in 2012. Much like how the second quarter of 2008 was the strongest quarter in that year, even though the U.S. economy had already peaked and had begun falling into recession earlier in December 2007.
We'll give the next-to-final word to the Emperor:
But alas, when it came to serious analysis of data in real time, the Emperor was no Moradmin Bast. Geek out on that if you will....
Your Paycheck Over the Cliff
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Assuming that President Obama continues his policy of not negotiating in good faith with U.S. congressional leaders on federal budget matters, what might your paycheck look like in 2013 after President Bush's 2003 income tax rate cuts expire?
That matters to you because if you earn either wages or a salary from a job, your income taxes will increase. And with that increase, so will the amount of taxes that you have withheld from each of your paychecks also go up.
We wondered what the potential impact of that might be on a working American's paycheck, so we adapted our paycheck withholding tool for 2012 by incorporating the withholding tax rates that would apply under 2003's original rules, updating the income thresholds to account for inflation.
That tool is below - just enter the indicated data for all the typical items that might affect the amount of federal income taxes that will be withheld from your paycheck and we'll work out how much federal income taxes will be withheld from your paycheck beginning in January 2013, as well as the percentage change from the amount that would be withheld from a paycheck you would receive in 2012.
In doing this exercise, we've taken the IRS' withholding tax income thresholds for both 2001 and 2012 and updated them to account for inflation, which we estimated based on the increase in Social Security's maximum taxable earnings from those years to 2013. We've also taken into account the reduced maximum amount of any health care flexible spending account contributions you might make in 2013, which will occur independently of other changes the nation's tax law thanks to ObamaCare.
As a result, the amount of federal income tax withholding from your paycheck that is estimated in this tool should be very close to the right ballpark for what you might actually see in your paychecks beginning in January 2013.
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