FISCAL CRISIS LOOMS FOR WINNER OF THE PRESIDENTIAL ELECTION

After the election, either President Barack Obama or Mitt Romney will have to deal with a deficit that has topped $1 trillion every year for the past three years and is on an unsustainable trajectory. "We've made a lot of progress getting the private-sector balance sheet in order. Where we've got a lot of work to do is on the public side," says Mark Zandi, chief economist at Moody's Analytics. Bloomberg

INEPTOCRACY

I couldn’t find it in the dictionary, so I Googled it, and discovered it is a recently "coined" new word.

Read this one over slowly and absorb the facts that are within this definition!

I love this word, and believe that it will soon become a fully recognized English word. At last, we have a word to perfectly describe our current political situation......

 INEPTOCRACY

(in-ep-toc'-ra-cy)- a system of government where the least capable to lead are elected by the least capable of producing and where the members of society least likely to sustain themselves or succeed, are rewarded with goods and services paid for by the confiscated wealth of a diminishing number of producers.

FEDS NEED 18 PAGES TO DEFINE 'FULL-TIME' FOR OBAMACARE

The IRS just issued regulations on who is considered a “full time employee” for the Patient Protection Act. Is it any surprise that it took over 18 pages for a law that was over 2,700 pages?

FARM POLICY EXPERT: LOOK FOR FARM BILL DECISION SOON AFTER ELECTION

(Lincoln Journal Star) -- JournalStar.com reports "it's unclear what the fallout will be after the House and Senate failed to agree on the choice between a one-year farm bill extension and a five-year farm bill" last month.  The article notes that federal law says that "farm policy reverts to the 1949 farm bill if there's not an operative replacement," taking producers (and consumers) back to the time "more than 60 years ago when parity -- an attempt to keep the purchasing power of commodities current with costs -- was the law of the land."   Brad Lubben, farm policy specialist at UNL, says "nobody thinks we're going back to 1949" -- because it is "economically inefficient or sort of irrelevant. It's politically unacceptable."  Lubben thinks the fate of a new farm bill "will be known no later than when the new Congress returns to work with either President Barack Obama or President Mitt Romney in the White House."

To read more of this article: CLICK HERE

 

 

YEAREND PLANNING: MAKING THE MOST OF QUICK WRITEOFFS FOR CAPITAL GOODS PURCHASES

Although bonus first-year depreciation and more-generous Code Sec. 179 expensing limits have been extended before, another lease on life for these tax breaks is far from certain this time around.

Unless Congress acts, additional depreciation deductions under Code Sec. 168 in the placed-in-service year equal to 50% of the adjusted basis of qualified property won't be available after this year. Also, the Code Sec. 179 expensing limit is set to plummet to $25,000 for property placed in service next year.

The message, businesses planning to purchase machinery and equipment during the remainder of this year or early the next should try to accelerate their buying plans, if doing so makes sound business sense.

BACK-TO-SCHOOL TIPS FOR STUDENTS AND PARENTS PAYING COLLEGE EXPENSES

The IRS just released a nice summary of education credits and deductions.  If you have any questions let us know.   

Back-to-School Tips for Students and Parents Paying College Expenses

Whether you’re a recent high school graduate going to college for the first time or a returning student, it will soon be time to head to campus, and payment deadlines for tuition and other fees are not far behind.

The IRS offers some tips about education tax benefits that can help offset some college costs for students and parents. Typically, these benefits apply to you, your spouse or a dependent for whom you claim an exemption on your tax return. 

·         American Opportunity Credit. This credit, originally created under the American Recovery and Reinvestment Act, is still available for 2012. The credit can be up to $2,500 per eligible student and is available for the first four years of post secondary education at an eligible institution. Forty percent of this credit is refundable, which means that you may be able to receive up to $1,000, even if you don't owe any taxes. Qualified expenses include tuition and fees, course related books, supplies and equipment.

·         Lifetime Learning Credit. In 2012, you may be able to claim a Lifetime Learning Credit of up to $2,000 for qualified education expenses paid for a student enrolled in eligible educational institutions. There is no limit on the number of years you can claim the Lifetime Learning Credit for an eligible student.

You can claim only one type of education credit per student in the same tax year. However, if you pay college expenses for more than one student in the same year, you can choose to take credits on a per-student, per-year basis. For example, you can claim the American Opportunity Credit for one student and the Lifetime Learning Credit for the other student.

·         Student loan interest deduction. Generally, personal interest you pay, other than certain mortgage interest, is not deductible. However, you may be able to deduct interest paid on a qualified student loan during the year. It can reduce the amount of your income subject to tax by up to $2,500, even if you don’t itemize deductions.

These education benefits are subject to income limitations, and may be reduced or eliminated depending on your income. For more information, visit the Tax Benefits for Education Information Center at IRS.gov or check out Publication 970, Tax Benefits for Education, which can be downloaded at IRS.gov or ordered by calling 800-TAX-FORM (800-829-3676).

Links:

·         American Opportunity Tax Credit

·         Tax Benefits for Education: Information Center
·         Publication 970, Tax Benefits for Education
·         The American Recovery and Reinvestment Act of 2009: Information Center
·         Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits)

 

SOMETHING TO THINK ABOUT

This is going to be political so do not look at if you will be offended...