Comedian Tries to Teach Kids About Taxes at Halloween

Over the weekend The Tax Foundation blog posted a funny video about how to teach children about taxes after they get home from tick or treating. Check out the embedded video below.

Tax Collector Tries to Squash Idaho Pumpkin Stand

My favorite holiday (Halloween) is just a few days away, and thousands of children and adults are getting out their pumpkin carving kits to prepare for the big night. Unfortunately, according to new reports a family owned pumpkin stand was almost put out of business because of an aggressive State tax collector.

The Lewiston Tribune reports the Idaho State Tax Commission has called for the closure of a family's pumpkin stand in Lewiston, a mill city along the Snake and Clearwater rivers.

Dan and Kami Charais told the newspaper that a Tax Commission employee informed them the stand was in violation of laws and had to shut its doors.

The couple says their 4- and 6-year-old children had been carving out a niche for themselves in the local jack-o-lantern market - to raise money for school sports, they say.

A Tax Commission representative told the newspaper that even goods sold at roadside stands are taxable and that the stand did not have a proper permit.

Read more here

Top 10 Halloween Season Tax Tips

Halloween is one of my favorite holidays. I always look forward to my law firm’s annual celebration. However, there is more to Halloween than costumes and trick-or-treating. The end of the year is only a few weeks away, and Halloween season is a good time to start thinking about taxes. To help my readers save a little money this year, I have put together ten spooky Halloween tax tips.

1. Haunted Home Renovations

Before you have guests over for a Halloween party, you might want to consider making some green renovations to save on energy. By installing a programmable thermostat, or upgrading to dual pane windows, you can keep your guests comfortable and also qualify for an Energy Star tax incentive. For more information, check out EnergyStar.gov.

2. Spooky Soiree's

Most teachers try to throw Halloween parties for their students, but due to budget cuts many educators are forced to finance these events out of their own pockets. Fortunately, if you are a qualifying teacher then you can use these expenses as part of your educator expense deduction.

3. Supernatural Savings

The average consumer spends about $66 each year on Halloween decorations, costumes and candy. Unfortunately, if you visit your local party supply store then you may end up paying more then you need to for your Halloween supplies. Instead, check out deals online to make your money stretch.

4. Eerie Extensions

If you had to file a tax return extension in 2009, then October 15th was the deadline to get your return in. The longer you wait to file your return, the more you will have to pay in IRS late penalties. If you have not yet competed your return, I highly recommend calling a tax professional right away.

5. Chilling Charity

As the weather cools down in October, charities begin asking for cool weather donations. When you have some free time, go through your winter wardrobe with your family to see if you have any extra sweaters, or blankets to donate. Keep the receipt for your contributions, and you can deduct the donation on your next tax return. However, you will need to itemize your return to qualify for this specific tax incentive. For more information, you can read this article explaining the charitable contribution deduction on RDTC.com.

6. Tip or Treat

If you receive tips at your job, then the IRS requires that you keep track of your total tips and report them to your employer. According to Topic 761, if you get $20 or more in tips during a calendar month then you are required to report them to your employer by the 10th of the following month.

7. Witchy Work Party

Throwing a Halloween party at the office is not only great for moral, but also comes with a nice little tax deduction. Food and supplies purchased for your employees can usually be written off if the party is held on the premises. If you plan a dinner or get together at a nearby restaurant then you can deduct half of the expense.

8. Dastardly Deadlines

Since every taxpayer is not required to make estimated quarterly tax payments, it can be easy to forget about the deadlines. Unfortunately, September 15th was a payment due date, and if you did not remember to send in your check then you should try to do so as soon as possible to avoid excessive penalties.

9. Franken-Farming

October is a busy month for many farmers. Luckily, there are several ways for taxpayers who own farms to save on their taxes. Hiring family members or depreciating capital farm assets are both tax savvy moves to make. For more information, you can read IRS Publication 225, Farmer’s Tax Guide.

10. Creepy Calculating

Like it or not, Halloween means that there are only two months left in the year. It is a good idea to think about calculating your tax liability so that you get a head start on end of the year tax planning. If you are looking for ways to prevent owing the IRS a large payment, then check out this article on RDTC.com with advice on how to lower your tax liability.

Questions for the Tax Lady: October 25th, 2010

Check out the following new Questions for the Tax Lady answers and feel free to ask me questions through one of the links below. You can send me an email, direct message or @ reply, and I will do my best to get an answer for you!

Question: Roni, if I donate Halloween candy and costumes to a local children’s home, is that deductible?

Answer: What a fun idea and a wonderful thing to do for those kids. Dressing up for Halloween is such a big part of childhood; I love the idea of helping underprivileged kids experience that!

To answer your question, yes you should be able to deduct the contribution so long as the children’s home is a recognized tax-exempt charitable organization. If you aren’t sure, you can ask the organization or you can check out www.IRS.gov to be sure. And remember, you will need some written acknowledgement of your donation from the children’s home, like a thank you letter.

Question: What are the differences between tax credits, deductions, and exemptions?

Answer: I’m so glad you asked this question, people use these terms interchangeably, and it drives me a little nuts.

A deduction refers to something you spent money on that can be deducted from your taxable income. The amount of the deduction varies based on what the expense was, how much you spent and IRS eligibility requirements. For example: if you donate $1,000 to a recognized charity, you could deduct your taxable income by $1,000.

An exemption allows you to reduce your taxable income, much like a deduction. However, exemptions are given in set dollar amounts ($3,650 in 2010) and are not tied to your actual expenses. Instead they are generally tied to the number of people you support. For example, you can claim an exemption for yourself, one for your spouse if you file jointly, and one additional exemption for each taxable dependent you support.

The tax bill impact of deductions and credits is tied to your tax bracket. If you are in the 25% tax bracket, a $1,000 deduction results in a $250 reduction in tax your tax bill. In the same vein - still assuming a 25% tax bracket - that $3,650 exemption will result in a $912.50 reduction in tax bill.

A tax credit is a dollar for dollar reduction in your tax bill. Credits are usually tied to how you spend money, or your income and family status. So, if you have a $100 tax credit, it will result in lowering your total tax bill by $100. Tax credits are almost always more beneficial than deductions.

There are refundable and non-refundable types of credits. A refundable credit means that if the amount of your credit exceeds the amount of taxes due, you can actually get a refund check for the rest. (For example, if your tax bill is $500, and you have a refundable credit for $1,000, you could actually get a refund check for $500.). Non-refundable credits can only result in a reduction of your tax bill, but not give you a refund. For example, if you have a $500 tax bill, and a $1,000 non-refundable tax credit, your tax bill will be reduced to zero, but you would not get a check for $500.

I hope this helps clarify these tax terms for you. Understanding the differences can help you make better tax choices.

Questions for the Tax Lady: October 4th, 2010

Check out the following new Questions for the Tax Lady answers and feel free to ask me questions through one of the links below. You can send me an email, direct message or @ reply, and I will do my best to get an answer for you!

Question: Roni, I have a small business with about a dozen employees. If I throw a Halloween party can I deduct the expenses of the necessary supplies? Like decorations and food?

Absolutely. Your employees work hard for you, and I believe that rewarding them with a holiday -- any holiday -- party goes a long way in keeping employees feeling appreciated and happy. According to the IRS, the costs of holiday parties for your employees are 100% deductible. This includes food, decorations, entertainment and more. Just make sure to keep the expenses reasonable for the size of your staff. If you only employ 5 people, a $10,000 deduction for holiday parties will likely raise eyebrows at the IRS.

Question: What is the standard mileage rate for this year? Has it changed from 2009?

The IRS mileage standards decreased this year, since gas prices have fallen. The various mileage rates for 2010 are shown below:

• 50 cents per mile for business miles driven
• 16.5 cents per mile driven for medical or moving purposes
• 14 cents per mile driven in service of charitable organizations

These rates apply for cars, vans, pickups or even panel trucks.

How to Have a Recession Friendly Halloween

The bad economy has all of us pinching our pennies a little tighter this year. However, the recession does not need to ruin your holidays. With some advanced planning and preparation, you can easily have a recession friendly Halloween.

General Tips

Keep your Spirits Up!

Do not let the idea of having to stick to a budget ruin your Halloween. As you will see from the rest of this article, there are plenty of ways to save money without sacrificing anything.

Embrace Halloween Crafts

There are plenty of ways to make decorations and costumes on a limited budget. Just stop by your local craft store and check out their Halloween section. If you have children, you can always enlist their help and make the task a family project!

Shop Specials and Discounts

Lots of stores run special discounts on Halloween merchandise and costumes this week. Pick up a local newspaper to browse the ads and take advantage of any sales you can find.

Decorations for Under $5

Turning your home into a haunted house does not need to break the bank. Check out the following ways you can create festive decorations for just a few dollars.

Graveyard Fog

You do not need to purchase an expensive fog machine to give the illusion of a haunted graveyard. You can pick up some dry ice from a local grocery store for a couple of bucks, and place it in a bucket with some warm water.

Tombstones

It only takes a few minutes to make a few spooky tombstones to decorate your house. Cut pieces of cardboard then paint them with grey and black. You can then write personalized messages on the tombstones such as “R.I.P” followed by the name of a friend or family member.

Ghosts

Making your own ghosts is actually pretty easy. Take either a foam ball or a balloon and wrap it with white cloth. You can then hang them by fishing line all over your house for a spooky effect.

Spider Webs

You can buy bags of spider web from your local 99-cent, or dollar tree store that will go a long way towards making your home look spooky and mysterious. You can also enhance the effect of the cobwebs by placing strings of black lights behind them.

Saving Money on a Halloween Party

The costs of hosting a Halloween party can add up quick, but you can save easily keep from breaking the budget by following these tips.

Dead Punch

Make a bowl of "dead punch" by mixing a batch of regular fruit punch, with floating ice cube hands in it. To make these frozen hands simply fill a few plastic gloves with water, tie off the ends, and place them in the freezer. Then, remove the ice cube hands and place them in your punch just before guests arrive.

Terrifying Table Settings

You can make beautiful centerpieces for next to nothing by filling some glass vases with fall leaves, or gauze and fake spiders for a scarier effect. If you are hosting a dinner party you could cut down on costs by making your own place cards and table decorations.

Pumpkin Potluck

Every one loves carving pumpkins for Halloween, so why not just host a pumpkin carving potluck? By having guests bring a dish you can save on food, and by carving pumpkins you can save on entertainment expenses.

Crafty Costumes Ideas

It is easy to get caught up in the Halloween fun and drop major cash at the Halloween costume shop. However, making your own costume can be both cheaper and more fun and original than buying a generic costume from the store.

H1N1

You can easily dress as the H1N1 virus – or Swine Flu – by throwing on some doctors scrubs and putting on a pig nose, or just wearing a pig nose and carrying around a tissue box. You could even “quarantine” yourself by wrapping a few pieces of caution tape around your arms or waist.

Bunch of Grapes

You can make a quick and easy costume with just a green shirt and a bag of purple balloons. Just blow up enough to cover yourself in, then pin the ends of the balloons to your shirt in a grape formation. Make sure to avoid sharp corners, and you have got yourself a creative costume!

The King of Pop

Because of his tragic death earlier in the year, Michael Jackson is going to be a hit costume this Halloween. To honor the late King of Pop, you can put dress like him by wearing a single glove, a colorful shirt, and a snazzy hat. If you have enough time you could even bedazzle your glove and hat for a more stylish look.

Mummy Costume

The mummy costume is a Halloween staple, especially for anyone looking to save money. Just get some medical gauze from the store and wrap it around a white shirt and light pants. To make the look more authentic you could lie out the gauze before hand and add some streaks of gray and black paint to give it a mummified look.

Balloon Boy

Since the Balloon Boy incident turned out to be a big hoax, and the boy was found in his own attic, you can easily make fun of this pop culture event by dressing like it for Halloween. The great thing about creating a Balloon Boy costume is that there are dozens of options. Since the boy was found inside a box in the attic you could put a big cardboard box around you and carry around a gray balloon. Or, you could wrap yourself in foil and mimic the now famous balloon that we all saw on the news. Just use your imagination and the possibilities are endless.

Halloween and Taxes: Top IRS Horror Stories

Yesterday the RDTC Tax Help Blog posted a new blog entry celebrating the Halloween season with some chilling tales of IRS horror stories. For most of us, ghosts and witches are only really scary in horror movies. In real life, one of the scariest things that can happen to an adult is to find a letter form the IRS in the mail. Check out the following three examples, or check out Halloween and Taxes: Top IRS Horror Stories on the RDTC Tax Help Blog for the full article.

1. A Cayman Islands Vacation Gone Bad

When most people hear the words “Cayman Islands” they probably think of a relaxing Caribbean vacation. However, many might also think about illegal tax shelters, as the islands are somewhat infamous for hosting the private bank accounts of many American tax evaders. A few years ago, Joe ran into a few problems of his own in the Cayman Islands. He and his business partners used to vacation in, and bank in the islands on a regular basis, until Joe’s vengeful ex wife got wind of the situation. She tipped off the IRS and Joe found out about it one afternoon when 25 federal agents stormed his home and business, ceasing all kinds of financial information. Joe was considered a flight risk and imprisoned under $5 million bail. It took dozens of court cases, and thousands of dollars in legal fees to prove his innocence, and resulted in a major lifestyle change for Joe.

2. The Audit of Endless Receipts

Auditors are notorious for being difficult every now and then when it comes to documenting expenses and qualifying for credits, but usually leave a little leeway. However, this was not the case for a taxpayer named Heather who was audited by what she now refers to as the world’s most relentless auditor. She claims that the auditor in question hounded her for not only proof of her business expenses, but receipts for every single personal and professional transaction made over the past two years. The auditor supposedly made her scrounge up receipts for transactions for as little as a dollar or two. Needless to say, Heather could not find every document required and faced several penalties.

3. They Came with Guns

Restaurant owner John Colaprete woke up one March morning in 1994, unsuspecting of the terror that would soon be at his doorstep. That afternoon, gun-wielding federal agents stormed his home, his restaurant managers home, and his two restaurants with no explanation and no apologies. John, a former marine, was in total shock and had no idea what could cause such a raid. It turns out one of Johns former bookkeepers, who had been fired for embezzling from her employers, had gone to the IRS with a horror story of her own. However, she fabricated her story in order to cover her own mistakes and told the IRS that John was involved in both money laundering and gun trafficking.

Once the IRS realized he was innocent, John became a champion for scorned taxpayers everywhere. He spoke to a roomful of U.S. senators about his experience, and explained that his restaurants were left in shambles and that his reputation was ruined by the false scandal. These days John gets calls every day from taxpayers sharing their own IRS horror stories.

What a Tax Lawyer Dug Up on 'Dracula'

From: WSJ.com:

"There are such things as vampires," says Dr. Van Helsing in Bram Stoker's novel "Dracula." The famous line comes about two-thirds of the way into the story, but it hardly delivers the punch of a staggering revelation. By the time Van Helsing utters it, the book's other characters essentially have figured out the weird truth for themselves.

Readers know even more. Does anybody pick up a copy of "Dracula" these days without first realizing it's about a supernatural bloodsucker from Transylvania? Or were you expecting a spoiler alert?

This is a challenge for a lot of classic books: The stories are so familiar that their twists and turns fail to shock or awe. Yet the publisher W.W. Norton & Co. seems to have found a commercially viable way out of this fix, with a series of annotated volumes that perform the marketing miracle of making the old seem new again. The latest, "The New Annotated Dracula," is out just in time for Halloween.

A novel such as "Dracula" still possesses plenty of well-told pleasures. An early scene in which its iconic antihero climbs out a window and crawls headfirst down a castle wall remains one of the creepiest in English literature. Yet it's the exceedingly rare reader who will scratch his head in bewilderment when Van Helsing breaks out the crucifixes and garlic.

Leslie S. Klinger, the editor of "The New Annotated Dracula," nevertheless manages to enliven the experience of reading about the world's most famous undead white male. Like a movie studio that adds "bonus features" to a DVD, Norton includes extensive commentaries in "The New Annotated Dracula" and even offers what appears to be a genuine literary discovery: The volume describes a previously unknown "alternate ending" to the 1897 text.

"The New Annotated Dracula" probably wouldn't exist but for the success of several predecessors. Annotations aren't exactly an innovation, of course, and many publishers have glossed the plays of Shakespeare and the poetry of "Paradise Lost" for college students. Norton's breakthrough idea was to produce lavish volumes full of illustrations, essays, appendices, and discursive footnotes for general readers.

A decade ago, Robert Weil, an editor at Norton, conceived of "The Annotated Alice: The Definitive Edition." It brought together Lewis Carroll's "Alice's Adventures in Wonderland" and "Through the Looking-Glass," combining and updating previous annotations by Martin Gardner, a renowned Carroll expert. "Our goal was to publish a beautiful book that would allow adults to relive a classic that they knew as children and to understand it in a new way," says Mr. Weil.

"The Annotated Alice" became a hit whose steady sales make it a backlist superstar for the publisher. Norton has gone on to try the same tack with annotated editions of more than a dozen other titles, such as "The Wizard of Oz," "Huckleberry Finn" and "A Christmas Carol." Forthcoming editions include "The Wind in the Willows," "Peter Pan" and the tales of Edgar Allan Poe.

Norton says its first printing of "The New Annotated Dracula" will number about 50,000 copies -- a healthy run for an oversized, 613-page book. Even so, it's a lightweight compared to "The New Annotated Sherlock Holmes," three volumes totaling more than 2,700 pages, also edited by Mr. Klinger.

By day, Mr. Klinger is a Los Angeles tax attorney with clients in the entertainment industry. By night, he turns his attention to genre literature. When he finished working on the Holmes books, he cast around for a similar project. His wife suggested "Dracula," which made sense because it, too, was a product of late-Victorian Britain whose central character had achieved a legendary status in popular culture -- an inspiration for everything from the movies to the Muppets.

In his book, Mr. Klinger does what annotators do. He defines obscure words and terms. He conveys little-known trivia, such as Stoker's consideration of "The Un-Dead" or "The Dead Un-Dead" as potential titles. And he proposes offbeat interpretations. Is it possible, for instance, that Quincey Morris, one of Van Helsing's vampire hunters, is secretly in league with Dracula? Stoker almost certainly didn't intend it, but a careful probing of the text leaves open this intriguing prospect.

In the vast body of amateur scholarship on Sherlock Holmes, there's a tradition of pretending that Holmes was a real person and that Arthur Conan Doyle was not a writer of fictional stories but an actual biographer. Mr. Klinger takes the same approach with "Dracula," with results that will amuse some and annoy others. "You don't have to buy into my crackpot suggestion," he says. "But the idea is to help the reader have fun."

In researching "Dracula," Mr. Klinger had to perform detective work that would do Holmes proud. Stoker left behind not only his published manuscript, but also extensive drafts and notes that provide glimpses of how his ideas about the novel evolved over several years -- rich source material for any annotator. One of the key texts is a 541-page manuscript that turned up in a Pennsylvania barn some years ago. Few people have laid eyes on it, and Mr. Klinger tried to contact its anonymous owner through Christie's, the auction house.

That effort initially failed, though the private collector ultimately approached Mr. Klinger through an intermediary and invited him to spend two days with the manuscript. Mr. Klinger had to sign a nondisclosure agreement, but this summer he received permission to identify the mysterious owner: Paul Allen, the co-founder of Microsoft.

Mr. Klinger draws extensively from this document, and the greatest payoff comes in the last chapter, when he reveals an ending different from the one Stoker put into print. The lost scene shows up in Mr. Allen's manuscript, but not in the novel as it was finally published. It takes place in Transylvania and involves a massive explosion. Saying more would spoil the surprise.

Top 10 Costumes from My Firm's Annual Halloween Party

10) Whoopie Cushion

9) Beer Keg

8) Mario Brothers

7) Geisha

6) Easter Bunny

5) Surf Board

4) Borat

3) Nintendo Controller

2) Lindsay Lohan

1) Geico Cave Man

Halloween at Roni Deutch, A Professional Tax Corporation

As it is every year, this year's Halloween party was a huge success! I love Halloween! As a young child nothing was more satisfying then coming home with a pillowcase full of candy! See pictures from our Halloween party at the Official Flickr page of Roni Deutch.