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Friday, August 02, 2013

George Gilder blends Wealth and Poverty with Knowledge and Power

In this August 5, 2013, article, George Gilder presents his pathway from when he authored Wealth and Poverty (over 30 years ago) to this years' book, Knowledge and Power.

Thursday, August 01, 2013

ADP Reports 200K Private Sector Jobs In July

In addition, ADP revised its job gains in June upward from 188,000 to 198,000 (see ADP Finds Private Sector Added 188,000 Jobs in June).

Wednesday, July 10, 2013

Disk Storage Technology

We have become used to disk storage becoming more dense (more data on smaller surface) and residing on various kinds of media. Here is something to challenge our thinking: href=""

Monday, July 08, 2013

Reynolds Law

In what is becoming known as 'Reynolds Law', here is a qoute from Instapundit's Glenn Reynolds:

Reynolds’ Law was based on this remark by Instapundit’s Glenn Reynolds:

The government decides to try to increase the middle class by subsidizing things that middle class people have: If middle-class people go to college and own homes, then surely if more people go to college and own homes, we’ll have more middle-class people. But homeownership and college aren’t causes of middle-class status, they’re markers for possessing the kinds of traits — self-discipline, the ability to defer gratification, etc. — that let you enter, and stay, in the middle class. Subsidizing the markers doesn’t produce the traits; if anything, it undermines them.

Thursday, June 06, 2013

ADP Finds Private Sector Added 135,000 Jobs in May

Employers in the private sector added 135,000 jobs from April to May, according to payroll giant ADP, which represented an increase over the previous month, but still indicated some softening of the employment picture.

Thursday, May 30, 2013

Statistical Apples and Oranges Yield Strange Fruit

The first link, below, is to May 29, 2013, report of by Congressional Budget Office addressing the Distribution of Major Tax Expenditures across 5 levels of tax payers. It is 31 pages, fairly complex reading, and certainly proves that the current Individual Tax System is not simple:

The second link, below, is to May 30, 2013, Accounting Today article on the report. It makes extensive quotes by congressional folk. It is shorter and seemingly 'cherry-picks' the report to make points supporting existing biases.

The two graphs on the cover page of the CBO report show clear distinction between presenting in total dollars and presenting in percentages of income. I didn't discover any reference to the second graph in the Accounting Today article. It does point out that preferential tax rates on capital gains and dividends benefit high income folk, while the earned income credit benefits lower income folk.

Those two 'tax expenditures' are apples and oranges. Deductions and exclusions from a graduated tax rate system is necessarily going to impact more dollars for those who pay the most taxes.

Thursday, May 23, 2013

Global Understanding

Link is to a SkyDrive directory that has 3 PDF files and a Web Word file that contains a link to a relevant TED presentation by Hans Rosling.

Thursday, May 09, 2013

Google's Vint Cerf On Interplanetary Internet

Working with NASA and JPL, Cerf has helped develop a new set of protocols that can stand up to the unique environment of space, where orbital mechanics and the speed of light make traditional networking extremely difficult. Though this space-based network is still in its early stages and has few nodes, he said that we are now at “the front end of what could be an evolving and expanding interplanetary backbone.”

Wednesday, May 08, 2013

Pew Research on Preparing 1040s

According to the national survey, which was conducted April 4 to 7 among 1,003 adults, about
one-third of respondents (34 percent) say they either like (29 percent) or love (5 percent) doing
their taxes. A majority of Americans (56 percent) have a negative reaction to doing their income
taxes, with 26 percent of respondents saying they hate doing them.

Thursday, May 02, 2013

ADP Finds Private Sector Hiring Slowed in April with 119,000 Jobs Added

ROSELAND, N.J. (MAY 1, 2013)
Private sector employers added only 119,000 jobs in April, according to payroll giant ADP, indicating a slowdown in employment perhaps caused by the increase in payroll taxes and effects from the budget sequester in Washington.

Friday, April 19, 2013

Donor Controlled Charitable Donations

Recently I have been researching, using the Internet, the issue of charitable contributions received by a church for a church-approved designated purpose, but sub-earmarked by the donor for a named individual’s costs of participation (in this case a medical mission trip abroad). Before retirement in 2007, I had access to one or more of the major tax services for such research. Most of the cites I’ve discovered are individual organization’s (often churches) websites citing their policy. Different groups reach different conclusions.

I did discover the Supreme Court case relative to Mormon Church mission endeavors being funded by the parents of the participants. In that case the funds were being spent directly, though the mission was under the auspices of the church.

Of the organizations concluding the such a specific designation fails as to the issue of ‘control’ and refers to that issue as the IRS position, I didn’t discover IRS wording to that effect in Publication 526.

I seem to recall, from researching the issue in years’ past, that there were a plethora of cases on point.

Does anybody have access to litigated documentation of the issue, or to Publications other than 526 that are on point?

Monday, April 08, 2013

Tax Reform per Wall Street Journal article on today

From near end of article:
There are skeptics who question the prospects for bipartisan tax reform. We know we face some fierce headwinds. People from across the spectrum are trying to turn tax reform into a political weapon, which could end up killing any chance at success.

We can't let that happen. Tax reform can't be about politics. It has to be about the people we serve, about boosting the economy, about creating jobs in Montana, Michigan and across America. It has to be about restoring some trust in the process of government.

C. Eugene Prescott observation: I suppose I am among the skeptics as actual 'reform' has not happened since I entered tax practice in 1960.

Saturday, April 06, 2013

5 Steps to Cutting Costs Through Open Source: DIY Drones

Peter H. DiamandisFeb 14, 2013 -

In this blog, I'm continuing my exploration of what Chris Anderson's company DIY Drones has done in using open-source methods to create products that are exponentially less expensive to make.

Thursday, April 04, 2013

ADP Reports 158K Private Sector Jobs For March 2013

ADP also revised its job numbers for January and February on Wednesday, with February’s gain of 198,000 jobs revised up by 39,000 to 237,000, and January’s 215,000 gain revised down nearly an equal amount by 38,000 to 177,000.

Saturday, March 23, 2013

Samsung Galaxy Note II

In the latter part of February, 2013, I acquired my first ‘smartphone’, a Samsung Galaxy Notes II. In this process I changed providers from Sprint to US Cellular. A primary reason for the provider change was that US Cellular has a 3G tower in Bath, NC (4G in Greenville and much of NC). Thus I can reach the Internet routinely from Bath, both directly on the smartphone and using the phone as a modem to tether my notebook to the Internet.

Features of subscribed plan are:

Unlimited Mobile-to-Mobile Minutes (have 1 additional phone)
7pm Unlimited Night and Weekend Minutes
Free Incoming Call
Pictures and Video Messages
Unlimited Messaging
Voice Mail
Call Waiting
Caller ID
Call Forwarding
Three-Way Calling
Voice Overage Protection
Daily Data
5GB Data and Tethering

Most of the ‘features’ just happened to be in the most appropriate plan; but a number of them are important to my use pattern.

I’m still exploring, and hopefully learning, about many of the capabilities of using the phone directly. The tethering is very important to me. The inbuilt way of connecting is a multiple-step process, both to connect and disconnect. So I have installed a product named “EasyTether” ($9.95) that automatically connects whenever the USB is plugged into the phone.

Over time I plan to address the most usable (for me) features as comments to this post. To date, I am statisfied.

Tuesday, March 19, 2013

How Much Does A CPA Cost?

Posted by Guest Blogger on Mar 18, 2013 in Guest Blogger, Tax Often when people find out I’m a tax accountant, I get asked, “How much does a CPA cost?” It’s like me asking “How much does a home cost?” We all understand that a 1,000 square-foot home in Kansas has a different cost than a 1,000 square-foot penthouse condo in New York City. The same concept applies to CPAs. The answer to both questions is the same: it depends. For example, my uncle has a simple tax return and pays $250 in preparation fees. On the other hand, I had a client whose return took over a week to prepare when I worked in a large firm, which cost the client around $100,000.

Wednesday, March 06, 2013

ADP February 2013 Jobs Report

By KATHLEEN MADIGAN Private businesses added new employees in February at a faster pace than economists expected, according to a tally of private-sector hiring released Wednesday.

Monday, February 25, 2013

Beware of Bogus IRS E-Mails

WASHINGTON, D.C. (FEBRUARY 23, 2013) BY JEFF STIMPSON The IRS has issued a warning to taxpayers who receive emails claiming to be from the agency.

Wednesday, February 06, 2013

15 Tax Moves for Right Now

The following link is to a PDF file of article dated February 5, 2013, by Financial Planning that is timely. Though most of the items are most applicable to high income taxpayers, generally considered $200,000 or more, the article is well written and should be read by all:

Thursday, January 31, 2013

2012 Most Visited Post

The most visited post made during 2012:

ADP Sees 192,000 Private Sector Jobs Added in January

ROSELAND, N.J. (JANUARY 30, 2013) BY MICHAEL COHN Employers added 192,000 jobs in the private sector this month, according to payroll giant ADP, with small businesses showing the largest job gains.

Wednesday, January 30, 2013

What 'Permanent' Means When Talking Tax

One aspect of The American Taxpayer Relief Act of 2012, signed by President Obama on October 3, 2013, is the frequency that specific items were made 'permanent.' While being 'permanent' is better than 'temporary' or 'sunsetting' as it relates to tax planning, what 'permanent' means is .... this is the rule until Congress changes it. Congress can, and often does, change any tax rule anytime it can agree. Also, the IRS itself can change how a rule is interpreted by the issuance of Publications and Rulings. Consequently 'permanent' changes frequently.

Tuesday, January 29, 2013

IRS further delays acceptance of returns claiming Form 8863 education credits

BY SALLY P. SCHREIBER, J.D. JANUARY 28, 2013 On Monday, two days before the delayed Jan. 30 start of the 2013 filing season, the IRS announced a further delay in processing returns that contain Form 8863, Education Credits, which must be filed by people claiming the American opportunity and the lifetime learning tax credits (IR-2013-10). During testing, the IRS discovered that programming modifications must be made before the form can be processed correctly so returns that include the form cannot be filed until mid-February. The IRS emphasized that returns claiming other education-related items, such as the student loan interest deduction and the deduction for higher education tuition or fees, can be filed beginning Wednesday, Jan. 30. The IRS also noted that its website contains a list of 30 other forms that cannot be filed yet because the forms must be updated and systems for processing them tested. A date will be announced when returns containing these forms will be accepted, but that date will probably be late February or sometime in March. —Sally P. Schreiber ( is a JofA senior editor.

Monday, January 28, 2013

Android is 3 to 1 vs Iphone

Together, the two shipped just under 200 million smartphones around the world last quarter to grab a record market share, says Strategy Analytics. href=""

Alternative Minimum Tax (AMT) under Relief Act of 2012

One aspect of the complexity of the tax law has been how the AMT, which was originally enacted to 'alternatively tax high income taxpayers' was potentially and unintentionally applicable to middle income taxpayers. It was estimated that before the act and additional 28 million taxpayers would be subject to the AMT. For tax years beginning after 2011, personal credits that had been excluded for offset, are now usable for 2012 and future years. Capital Gain and Dividend rates for regular tax continue applying for AMT for 2012 and future years. 'Future years' merely means there is no built-in sunset date. Congress still has discretion to change tax law any time they can agree. Additionally, for upper income taxpayers, the title 'Tax Relief Act of 2012' is an illusion.

Thursday, January 24, 2013

IRS Offers Advice for Coping with Delayed Return Filing

WASHINGTON, D.C. (JANUARY 23, 2013) BY MICHAEL COHN The Internal Revenue Service provided advice to taxpayers Wednesday on dealing with the late opening of tax season on January 30 that could also prove helpful to tax preparers.

Wednesday, January 23, 2013

Child and Dependent Care Credit

The child and dependent care tax credit were permanently extended for taxable years beginning in 2013. A dependent (defined as being under age 13 at the end of the tax year OR incapable of self-care) that requires paid care in order for you to work (or look for work), may qualify for a credit up to $1,050 or 35% of $3,000 of eligible expenses. For two, or more, qualifying dependents, you can claim up to 35% of $6,000 (or $2,100) of eligible expenses. With higher income earners the credit % is reduced, but not below 20%, regardless of amount of adjusted gross income.

Tuesday, January 22, 2013

IRS Offers Guidance on Reporting Mortgage Interest Premiums after Fiscal Cliff Deal

WASHINGTON, D.C. (JANUARY 18, 2013) BY MICHAEL COHN The recent fiscal cliff tax deal extends the ability to treat mortgage insurance premiums as qualified residential interest, and the Internal Revenue Service is providing guidance on how to report the premiums on Form 1098, both electronically and on paper.

Monday, January 21, 2013

Mathematicians Hope To Take Publishers Out of Publishing

Episciences Project to launch series of community-run, open-access journals January 18, 2013 Mathematicians plan to launch a series of free open-access journals that will host their peer-reviewed articles on the preprint server arXiv, Nature News reports. The project was publicly revealed yesterday in a blog post by Tim Gowers, a Fields Medal winner and mathematician at the University of Cambridge, UK.

2013 Long Term Capital Gains and Dividends

In 2013 tax rates on cpaital gains and dividends for taxpayers whose income is at or below $400,000 ($450,000 for married, filing jointly) remain the same as 2012. Therefore, for taxpayers in the 10% and 15% brackets, the rate remains 0%. For taxpayers in the mid-range brackets, the rate is 15%. For those above the above thresh-hold, the rate of both capital gains and dividends is increased from 15% in 2012 to 20% in 2013.

Wednesday, January 16, 2013

Simplified home-office deduction safe harbor announced

While the computation of amount is greatly simplified, the provision still includes the reference that the office space in home is used 'exclusively' for the related business. Taken literally, that is a high hurdle. For instance, my only office space is in my home, but it is clear that I use it for a variety of activities (personal, church, and professional work), so I fail the 'exclusive' test.

Saturday, January 12, 2013

Federal Revenues Continue to Improve

Federal revenues have increased by a total of 22.7%, despite a 2-year payroll tax holiday and no increase in tax rates!

Thursday, January 10, 2013

2013 Tax Rates Individuals; Trusts; Estates

One aspect of the "American Tax Relief Act of 2012" is that it reduced the propensity for annual, year-end, congress critter, stand-offs by making tax rates 'permanent' rather than 'temporary.' The link is to a one-page, PDF, of new rates effective January 1, 2013:

Wednesday, January 09, 2013

IRS Delays Tax Season until End of January

WASHINGTON, D.C. (JANUARY 8, 2013) BY MICHAEL COHN The Internal Revenue Service said Tuesday that it plans to open the 2013 tax filing season and begin processing individual income tax returns on Jan. 30, more than a week after the initially planned start date of Jan. 22, but some returns cannot be processed until late February or March.

Tuesday, January 08, 2013

Thursday, January 03, 2013

ADP 215K Jobs in Dec

December 2012 ADP National Employment Report® U.S. Economy Added 215,000 Private-Sector Jobs in December, According to ADP National Employment Report.

Wednesday, January 02, 2013

Tax Deal Compared To Going Over Cliff

JAN 2 2013, 1:47 PM ET 13 Households making between $200,000 and $500,000 saved the most compared to a world where we went off the cliff forever. Congratulations, if you're reading this, you survived the fiscal cliff. To celebrate the occasion, Congress is giving all of us a tax hike -- though not as big a tax hike as we would have otherwise gotten. Happy New Year? There's a lot not to like about the fiscal cliff deal, but the biggest thing not to like is the expiring payroll tax cut. As you can see in the chart below, from the Tax Policy Center, it lowers everybody's after-tax income by at least 1 percent, despite the bottom 99 percent of the Bush tax cuts getting renewed and rebranded as the Obama tax cuts.

Congress passes fiscal cliff act

BY PAUL BONNER AND ALISTAIR M. NEVIUS JANUARY 1, 2013 Pulling back from the “fiscal cliff” at the 13th hour, Congress on Tuesday preserved most of the George W. Bush-era tax cuts and extended many other lapsed tax provisions. Shortly before 2 a.m. Tuesday, the Senate passed a bill that had been heralded and, in some quarters, groused about throughout the preceding day. By a vote of 89 to 8, the chamber approved the American Taxpayer Relief Act, H.R. 8, which embodied an agreement that had been hammered out on Sunday and Monday between Vice President Joe Biden and Senate Minority Leader Sen. Mitch McConnell, R-Ky. The House of Representatives approved the bill by a vote of 257–167 late on Tuesday evening, after plans to amend the bill to include spending cuts were abandoned. The bill now goes to President Barack Obama for his signature.

Google Glass update

January 2, 2013 Google Glass will let you access information “so fast that you feel you know it,” says Project Glass leader Babak Parviz Summary of an IEEE Spectrum report In the next few weeks, Google will start shipping its Google Glass to developers. More-polished consumer models are expected in 2014.

IRS e-Services Systems Down Until Jan. 6

WASHINGTON, D.C. (DECEMBER 31, 2012) BY JEFF STIMPSON In addition to the previously announced Centralized Authorization File outage from December 26 to January 2 at 6 a.m. ET (see "IRS Warns of Service Disruption Christmas Week"), the IRS e-Services' Transcript Delivery System, Disclosure Authorization and Electronic Account Resolution systems will be unavailable for three additional business days. They should return to operation January 6.