I usually like to stay away from the political side of taxes, but this being an election year it's definitely a hot topic!

Thanks to WebCPA I found this website that will calculate your estimated taxes based on the tax plans of the two presidential candidates.

All the recent hubbub about the tax rebates has me completely flummoxed and recent reports by the Tax Foundation make me wonder how all this hand waving by Congress & the Executive is actually going help the economy. It's clear people who are making policy don't have to do any of the hard work to implement it.

What they've managed to cobble together in a matter of weeks will be a logistical nightmare and wont get into the economy for months.

It may be too late now, but if we're going to have a stimulus package I would be interested in hearing comments on alternatives to an income tax rebate. There are plenty of other taxes we pay besides income taxes.

Wouldn't a payroll tax holiday would be an easier solution?

By now most S-Corps shareholders have heard about IRS Headliner 163. This said S-Corp shareholders with >2% ownership in the corporation could not take the same deduction to gross income for self-employed health insurance premiums as sole-proprietors or partners unless there was a policy written in the company's name.

This created a proverbial Catch-22 if you and/or your spouse are the only employees of the corporation. Insurance regulations in many states specifically prevented insurers from writing business policies with just one member. Instead these people were required to get individual health insurance plans.

The real question of any tax reform should be what is taxable, not what's the tax rate.

On the Colbert Report, Ron Paul said wants to eliminate the income tax and abolish the IRS. Mike Huckabee agrees and want to have a "Fair Tax", or national sales tax.

Would every purchase really be taxable under this "fair tax"? Would a single mother on welfare have to pay 23% sales tax on baby formula? Would you have to pay sales tax on the purchase of your primary residence? The Fair Tax people say yes, but you can see how easy it would be to start saying this or that should be exempt from sales tax. And even in the current form, the tax would exempt purchases for resale and the sale of used items.

C-NET's recent article on internet taxes got my ire up! We already have enough taxes! And, at least in California, we're already required to pay sales tax on tangible items purchased over the internet. (The article incorrectly states paying the taxes is voluntary. The CA Franchise Tax Board and Board of Equalization don't consider it voluntary).

It seems to me the obvious and relatively simple solution is reporting. Business already do a lot of it & you can expect more soon.

Internet sellers of tangible products, like books, would send the equivalent of a 1099 of annual customer purchases over say $100. The only tricky part is businesses would have to report each customer's sales by state. Centralized reporting to the IRS would help make that a lot easier.

The states could then setup matching programs to make sure customers are reporting their sales tax due. You could easily add a provision to exempt reporting by small businesses with sales under a certain amount, say $1 million.

In an increasingly electronic age, it seems a lot better to add reporting than impose a new tax when we already have taxes in place that could be enforced with minimal effort.

in the sand. :)

Economy - Wednesday (Investor's Business Daily) - Treasury Sec'y Henry Paulson said steps to make up for the gap between taxes owed and payments received would be too costly. "There is a big part of the tax gap we simply won't be able to reach without adding draconian and painful requirements on all taxpayers," Paulson said. The IRS estimated the gap at $345 bil in '01, and Democrats say it must be closed. [Yahoo Tax]

According to the IRS, a large percentage of the tax gap is due to small businesses that under report income and over report expense. Most of these are honest tax payers who simply don't understand what their tax obligation and rules are.

Every year I see & hear horror stories about estimated tax payment gone wrong. I’m not sure which is worse, the person who didn’t have any idea they needed to make tax payments for both income and self-employment taxes or the person who set aside the money then used it as a down payment on a house, boat or to buy shares in some shady investment scheme.

The problem with estimated payments is not only are they confusing, but the “right” way to make estimated payments depends entirely on your personality and your financial situation.

For instance, if you’re hit with a whopper of a tax bill come April 15th, will you be able to blithely write out a check or will you be in a frozen panic? Does it gall you to get a big refund knowing the US Treasury has had the free use of your money throughout the year? Or is that new sports car irresistible, knowing there’s stash of cash in your savings account, never mind that it’s for your upcoming tax bill?

If you're a small business owner, you know there are never enough hours in the day. You need to grow your business and get new customers, not spend hours paying bills and doing tedious bookkeeping. And those tax returns... forget about it!

What you need is someone who can take care of all this administrivia for you. Someone who can look at the situation of both your business and you personally and advise you on the best approaches to benefit both you and your business.

The IRS added a new article to its website, to help those of us who emptied out the garage or storeroom by selling unwanted items on E-Bay or other online auctions. The article outlines the required tax reporting on those sales.

Generally, if you sold personal items for less than you actually paid for it, then you don't have to do anything. :)

But if you sold personal items that appreciated in value have to report any gain. If it's art, antiques or other collectibles you pay the 28% tax rate. Otherwise you'll pay the normal capital gains rates.