The South Carolina Department of Revenue had a large and unprecedented security breach that went on for ten days before it was stopped. 3.6 million social security numbers and 387,000 credit card numbers were exposed by the hackers, though only 16,000 of the credit card numbers were unencrypted.
Anyone who has filed a tax return in SC since 1998 should call the number provided by the SC DOR. They will be able to find out if they were compromised and, if they were, get free credit monitoring from Experian. The phone number was overwhelmed initially, but the SC DOR said it plans on increasing the number of lines and operators.
Here is a quote from the press release with the phone number:
Anyone
who has filed a South Carolina tax return since 1998 is urged to visit
protectmyid.com/scdor or call 1- 866-578-5422 to determine if their
information is affected. If so, the taxpayer can immediately enroll in
one year of identity protection service provided by Experian.
Here is a link to the full release: http://www.sctax.org/News+Releases/20121009_1026NR.htm
Saturday, October 27, 2012
Sunday, October 21, 2012
Boomer Deduction - History and References
If you like the blog, buy my book: Everyday Taxes only $5.99 for Kindle!
As a former Submarine Master Chief, I had many occasions to talk taxes with sailors. You would be surprised how many of them believe that the Boomer Deduction is some shady loophole or entirely mythical. Even more disturbing, you would be surprised how many of them get turned away by tax professionals arguing the same thing. I'm here to tell you one important thing:
The Boomer Deduction is REAL, LEGAL and GREAT!
This is not to say that there aren't people taking advantage of it and abusing it by stretching the deduction beyond any reasonable bounds, but it also means there are a lot of people not taking proper advantage of a legitimate deduction. I am going to utilize information from a number of sources, without footnote, but I am linking them all within this post, or at the bottom. I will also include links to my other posts, which includes a 2011 Boomer Worksheet (I will post a 2012 as soon as I am sure the numbers are final.)
Let's first understand what the Boomer Deduction is. It's a deduction for expenses while traveling away from your "Tax Home." IRS Publication 463 delineates many of these deductions, as well as the rules for allowing them. I cover the actual deductions in other posts, but a quick list is: Meals, Lodging, Auto Mileage and Incidental Expenses. Here's where the Boomer Deduction kicks in: your tax home, as a two crew FBM submariner, is the submarine, so, when it goes out to sea, your "travel" expenses become deductible! Now you can read Pub 463 backwards and forwards, and still think this idea is a shady one, but you don't have to guess, the IRS has already decided for you!
Revenue Ruling 67-438*, specifically states "A naval officer who is assigned to permanent duty aboard a ship which has regular eating and living facilities, such as an aircraft carrier, battleship, cruiser, destroyer, submarine, or supply ship, has his "home" for traveling expense purposes aboard the ship to which he is assigned." Oh no! That excludes all the Enlisted guys! This was actually a potential issue, but it was resolved conclusively in 2007, again by the IRS, with an IRS Memorandum that clearly stated that the ruling applied to Enlisted personnel as well.
So deduct away! Make sure you're following the rules, and don't get greedy, and you'll be okay.
http://supertaxgenius.blogspot.com/2012/03/simplified-boomer-deduction-worksheet.html
http://supertaxgenius.blogspot.com/2012/03/more-boomer-deduction-information.html
*This link has given me trouble in the past, but you can Google it.
As a former Submarine Master Chief, I had many occasions to talk taxes with sailors. You would be surprised how many of them believe that the Boomer Deduction is some shady loophole or entirely mythical. Even more disturbing, you would be surprised how many of them get turned away by tax professionals arguing the same thing. I'm here to tell you one important thing:
The Boomer Deduction is REAL, LEGAL and GREAT!
This is not to say that there aren't people taking advantage of it and abusing it by stretching the deduction beyond any reasonable bounds, but it also means there are a lot of people not taking proper advantage of a legitimate deduction. I am going to utilize information from a number of sources, without footnote, but I am linking them all within this post, or at the bottom. I will also include links to my other posts, which includes a 2011 Boomer Worksheet (I will post a 2012 as soon as I am sure the numbers are final.)
Let's first understand what the Boomer Deduction is. It's a deduction for expenses while traveling away from your "Tax Home." IRS Publication 463 delineates many of these deductions, as well as the rules for allowing them. I cover the actual deductions in other posts, but a quick list is: Meals, Lodging, Auto Mileage and Incidental Expenses. Here's where the Boomer Deduction kicks in: your tax home, as a two crew FBM submariner, is the submarine, so, when it goes out to sea, your "travel" expenses become deductible! Now you can read Pub 463 backwards and forwards, and still think this idea is a shady one, but you don't have to guess, the IRS has already decided for you!
Revenue Ruling 67-438*, specifically states "A naval officer who is assigned to permanent duty aboard a ship which has regular eating and living facilities, such as an aircraft carrier, battleship, cruiser, destroyer, submarine, or supply ship, has his "home" for traveling expense purposes aboard the ship to which he is assigned." Oh no! That excludes all the Enlisted guys! This was actually a potential issue, but it was resolved conclusively in 2007, again by the IRS, with an IRS Memorandum that clearly stated that the ruling applied to Enlisted personnel as well.
So deduct away! Make sure you're following the rules, and don't get greedy, and you'll be okay.
http://supertaxgenius.blogspot.com/2012/03/simplified-boomer-deduction-worksheet.html
http://supertaxgenius.blogspot.com/2012/03/more-boomer-deduction-information.html
*This link has given me trouble in the past, but you can Google it.
Wednesday, October 17, 2012
Urgent - Are you going to lose your home soon?
UPDATE: The exclusion discussed in this post has been extended through 2013
If foreclosure, repossession, short sale, loan modification (not with original lender) or walking away from your home is a REAL possibility in the next few months, then it may behoove you to get it done sooner rather than later. Now I'm not suggesting that it's a good idea to abandon your mortgage, but, if it's going to happen anyway, there are real issues that affect the timeliness.
As a result of the mortgage crisis, Congress enacted a new exclusion for income from Qualified Personal Residence Indebtedness. In a nutshell, this means that if your home is foreclosed, repossessed, short sold, or loan modified, AND, you were personally liable for the loan portion not recovered by selling your property, you didn't have to pay taxes on up to 2 million dollars of cancelled debt that the bank did not recover. (1 million if Married Filing Separately.) If you aren't personally liable for the rest of the loan, are losing the home in bankruptcy, or your negative net worth exceeds the cancelled debt, you don't have to claim it as income anyway. Otherwise, be aware of this:
The rule that allows you to exclude the cancelled debt on a personal residence is set to expire at the end of 2012. UPDATE: The exclusion has been extended through 2013
If your home is foreclosed after that, and Congress doesn't extend the exclusion, you could be stuck with a large tax bill.
Now before you rush out and hand the keys to your lender, talk to your Tax Guy. This is a complicated issue that I have GROSSLY oversimplified. But do it now.
As always I am available to answer any questions you may have vis email: taxadvisor@email.com and feel free to share this with anyone who might be in trouble with their mortgage.
Here's a little light reading on Cancellation of Debt:
http://supertaxgenius.blogspot.com/2012/03/i-got-1099c-now-what.html
If foreclosure, repossession, short sale, loan modification (not with original lender) or walking away from your home is a REAL possibility in the next few months, then it may behoove you to get it done sooner rather than later. Now I'm not suggesting that it's a good idea to abandon your mortgage, but, if it's going to happen anyway, there are real issues that affect the timeliness.
As a result of the mortgage crisis, Congress enacted a new exclusion for income from Qualified Personal Residence Indebtedness. In a nutshell, this means that if your home is foreclosed, repossessed, short sold, or loan modified, AND, you were personally liable for the loan portion not recovered by selling your property, you didn't have to pay taxes on up to 2 million dollars of cancelled debt that the bank did not recover. (1 million if Married Filing Separately.) If you aren't personally liable for the rest of the loan, are losing the home in bankruptcy, or your negative net worth exceeds the cancelled debt, you don't have to claim it as income anyway. Otherwise, be aware of this:
The rule that allows you to exclude the cancelled debt on a personal residence is set to expire at the end of 2012. UPDATE: The exclusion has been extended through 2013
If your home is foreclosed after that, and Congress doesn't extend the exclusion, you could be stuck with a large tax bill.
Now before you rush out and hand the keys to your lender, talk to your Tax Guy. This is a complicated issue that I have GROSSLY oversimplified. But do it now.
As always I am available to answer any questions you may have vis email: taxadvisor@email.com and feel free to share this with anyone who might be in trouble with their mortgage.
Here's a little light reading on Cancellation of Debt:
http://supertaxgenius.blogspot.com/2012/03/i-got-1099c-now-what.html
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