Roni Deutch Tax Center - Tax Help Blog

Will I need to report my economic stimulus check as income?

Roni Deutch Tax Center — Wed, 14 May 2008 20:51:43 GMT

No. Many rumors have been floating around about the economic stimulus checks, and most of them are misconceptions. When you file your 2008 tax return you will not need to include your refund as part of your adjusted gross income.

It is also important to note that if you did not qualify for the payment based on your previous tax return, but your situation changes this year, then you may be eligible for the stimulus check when you file next April.

What if I have not received my economic stimulus check?

Roni Deutch Tax Center — Wed, 14 May 2008 20:50:07 GMT

First of all, do not worry. The Treasury Department will mail most of the stimulus checks based upon the IRS schedule, but not all. If you filed your return late, then your check will be mailed out after the initial batch of checks are sent out. Additionally, if you filed your return close to the April 15, then it is likely that the IRS did not process your return before the deadline so you might be lumped in with the checks for late filers.

Everyone who will get a stimulus check will first get a letter from the IRS telling you to expect it. Your check is likely to be mailed out a few weeks after the letter, so if you have not yet gotten the notice then it could be even longer before you get the payment.

If you have not gotten your check yet, then the best thing to do is just wait for a few weeks. If you filed a return, then you have nothing to worry about. However, the IRS has setup a “Where's My Stimulus Payment” page on their website that will let you track the status of your payment.

The Facts About A Gas Tax Holiday

Roni Deutch Tax Center — Thu, 08 May 2008 15:02:43 GMT

Over the past week the phrase "gas tax holiday" went from something no one knew about to a phrase being blasted through all media outlets. But what exactly is a gas tax holiday? Is it a new federal holiday that will give us all another three-day weekend? And will a gas tax holiday do anything for our downward spiraling economy?

The phrase "gas tax holiday" refers to a proposal from presidential hopefuls Sen. Hillary Clinton and Sen. John McCain to suspend the federal excise tax on gasoline from Memorial Day to Labor Day. It is a direct result of the eve-rising fuel prices that are expected to surpass $4 per gallon later this summer.

Currently the federal government levies an 18.4-cent excise tax on gasoline and a 24.4-cent tax on diesel. If the tax holiday were implemented estimates say that it could save the average American around $30 during the 3-month holiday. However, this number is just a guess as the actual savings are widely debated. But keep in mind that this tax-free holiday only applies to the federal taxes levied on fuel, not the state taxes.

People who support the holiday claim it is a fair tax break that all Americans will benefit from. According to reports, the average American gas tank holds between 15 and 18 gallons, and if the price of gas actually fell during the holiday, it could account for savings of $2 - $5 per fill-up. Which isn’t exactly a lot of money considering how much money Americans are spending at the pump.

Although it would not be very effective, the main reason Senators McCain and Clinton endorsed the holiday is because it was a good campaign move. Americans are frustrated with rising gas prices and are looking for lower gas prices. By supporting this gas tax holiday, the two candidates are hoping to get positive attention for their campaigns. Unfortunately, but it looks like the opposite has happened.

Just a few days after the gas tax holiday was announced, 200 of the nation’s leading economists came out against the measure. They said it would basically do nothing. They point out that a price drop would correlate to increased demand and could give even more money to the big oil corporations. Additionally, it would result in a massive loss of revenue to the federal government.

Unlike the other presidential hopefuls, Sen. Barack Obama has come out strongly against the gas tax holiday, calling it a quick-fix to a deeper problem.

Clinton, Obama, and McCain’s Tax Returns Analyzed

Roni Deutch Tax Center — Fri, 25 Apr 2008 19:18:22 GMT

Clinton’s win Tuesday in Pennsylvania showed that the race for the presidential nomination is still up for grabs. As we get closer to the Democratic convention, and the upcoming general election, all the remaining candidates have now publicly released their tax returns. It may have taken Clinton and McCain longer than Obama, but it is always better late then never! It is important to take a detailed look at this data as it can shed light into financial habits of the candidates, and well as their charitable nature.

Hilary Clinton (D)
Estimated Net Worth: $34.9 Million

Although Hilary Clinton only takes in $165,200 per year in wages from serving as a U.S. Senator, her and her husband have made millions from book deals, speaking engagements, and interest from their fortune. Over the last 7 years the Clinton’s have an adjusted gross income of nearly $110 million, with almost half coming from former President Bill Clinton’s speaking engagements. According to their returns, the Clinton’s have paid a total of $33,783,507 in taxes, which puts them at an average tax rate of 31%. This rate is much higher then the average of only 20% for Americans making over $10 million.

Over the past seven years the Clinton’s have donated a total of $10,256,741, which is the highest contributions of all the remaining presidential candidates. They have given away a total of just under 10% of their adjusted gross income (AGI). The chart below provides a break down of their charitable contributions.

Barack Obama (D)
Estimated Net Worth: $1.3 Million

Barack Obama and his wife have the lowest estimated net worth of all the major presidential hopefuls, with most of their modest fortune coming from recent earnings. Back in 2000 the Obama’s combine wages were $240,505 which includes Barack’s salary as a young state senator and his wife’s salary as a hospital administrator. Their wages stayed relatively constant until 2005 when Barack made over $1.2 million from author fees and his wife’s salary increased to over $300,000.

An important thing to note about Obama’s return is the extremely small percent of their AGI that they donate to charities. From looking at the chart below, you can see that in 2001 and 2002 they donated less then 0.5% of their income. An Obama spokesperson claimed, "as new parents who were paying off their large student loans, giving $10,000 to charity [from 2000 to 2004] was as generous as they could be at the time." However, it is interesting to note that they made over $1.4 million in 2005 but still donated under 5% of their AGI to charity. This is a far lower percent than the Clinton’s donations in 6 of the past 7 years.

John McCain (R)
Estimated Net Worth: $40.4 Million

Although McCain may have the highest estimated net worth of the remaining candidates, his income according to his tax returns is much, much lower. Why? Because McCain is the only of the remaining candidates to file a separate return from his much wealthier wife. To be fair, the couple has filed separate returns for all but one of their 27 years of marriage. However, no information or summary of his wife’s fortune has yet been made public. Additionally, McCain is the only candidate to only release his two most recent returns. The Clinton’s have made their returns dating back to 1992 public, and the Obama’s have done so dating back to 2000.

In 2006 and 2007 McCain’s AGI was comparably low at just $338,809 and $386,527 respectively. The majority of his income comes for the $165,200 a year he earns as an U.S. Senator and his $54,000 Navy pension. As you can see from the chart below, due to his lower income, McCain donated the highest percent of his income out of the remaining candidates. Although his $202,225 donations in 2006 and 2007 totaled about 5% of the Clinton’s $4,580,503 total donations.

Charts courtesy of TaxProf Blog.

The content of this article are striclty related to the candidate’s personal income tax returns. For more information on their individual tax views check out Tax Views of Top 10 Presidential Candidates on the RDTC blog.

When will I get my economic stimulus check?

Roni Deutch Tax Center — Thu, 24 Apr 2008 20:35:11 GMT

If you filed your return on time then you should expect to get your check according to the data below. However, if you did not file your return until after April 15, 2008 then you can expect to receive your payment at least two weeks later than your scheduled date. But note that if you do not file a return before October 15, 2008, then you will not receive a stimulus check this year.

For taxpayers using direct deposit the payments we be submitted as follows:

Last two SSN digits:

00 through 20 - May 2
21 through 75 - May 9
76 through 99 - May 16

For taxpayers getting regular checks your payments will be mailed as follows

Last two SSN digits:

00 through 09 - May 16
10 through 18 - May 23
19 through 25 - May 30
26 through 38 - June 6
39 through 51 - June 13
52 through 63 - June 20
64 through 75 - June 27
76 through 87 - July 4
88 through 99 - July 11

What should I do if I have not filed my tax return?

Roni Deutch Tax Center — Thu, 24 Apr 2008 20:34:38 GMT

The answer is simple: file it as soon as possible! The longer you wait to file your return the more you are going to owe the IRS. They assess a penalty, usually around 5%, of the amount due for each month that your return is late. The maximum penalty is 25% and if your return is more than 60 days late there is a minimum $100 penalty.

Many of the Roni Deutch Tax Center™ locations are open year round providing tax preparation services along with other financial and business services. If you do not think you can handle filing on your own then call and make an appointment with one of our offices before your penalties get too high.

Celebrate Tax Season with the 12 Days Of Taxes!

Roni Deutch Tax Center — Wed, 16 Apr 2008 21:33:51 GMT

Happy tax day everyone! In case you have forgotten today is your last day to enter the 12DaysOfTaxes $500 gift card give away! Make sure to remind you friends and family to enter, if they have not already.

To celebrate the end of tax season most people will go out and blow all of their refund on something wasteful like a new car or television. But before you do, consider the following 12 smart ways to use your tax refund.

1. Pay down your credit card debt

2. Save it for a rainy day

3. Make an extra mortgage payment

4. Open an IRA

5. Invest in the market

6. Prepay major bills

7. Upgrade faulty appliances

8. Open a college fund

9. Service your car

10. Invest in yourself

11. Prepay a future vacation

12. Donate it to charity

To see more information check out 12DaysOfTaxes.com

On the eleventh day of taxes the government gave to me…

Roni Deutch Tax Center — Mon, 14 Apr 2008 20:01:32 GMT

Tomorrow is the last day of taxes, but as tax season ends it is still important to think about your finances all year long. Especially in the weakening economy, it is more important then ever to make sure and plan for your retirement. Below is a list of 11 common retirement planning methods, for more information including their tax advantages check out 12DaysOfTaxes.com.

1. 401(k)

2. Roth IRA

3. Roth 401(k)

4. Traditional IRA

5. Simple IRA

6. Social Security

7. 403(b)

8. 457 Plan

9. Thrift Savings Plan

10. Veteran's Pension

11. Old Fashion Savings

Ten 1040 EZs

Roni Deutch Tax Center — Mon, 14 Apr 2008 19:55:23 GMT

Tax day is less than 48 hours away, but do not worry if you have no filed your tax return yet. With e-filing and federal tax extensions you are not late. However, if you wait until after April 15 to take any action, then you will likely face penalties and fees. Follow these top 10 ways to make your last minute filing adventures a little more EZ.

1. Gather all your important documents

2. Use last year’s tax return as a guide

3. Practice on paper

4. Do not rush, you will make mistakes

5. Visit a local CPA or tax preparation office

6. Do not just take the EZ route

7. Do not short-change yourself

8. Hold onto your receipts

9. File an extension

10. Prepare for next year

On the ninth day of taxes the government gave to me…

Roni Deutch Tax Center — Mon, 14 Apr 2008 19:52:11 GMT

Today is the ninth day of taxes and to celebrate we are reminding everyone to include all available tax credits on your tax return. Below is a list of the nine most common tax credits, for more information check out 12DaysOfTaxes.com.

1. Earned Income Tax Credit

2. Lifetime Learning Credit

3. Saver's tax credit

4. Environmental Credits

5. Child and Dependent Care Credit

6. Child Tax Credit

7. Additional Child Tax Credit

8. Hope Credit

9. Adoption Tax Credit