Tax clips from the Web: The tax code as literature, canceled debt and TV pitchmen
How big is the tax code?
Wait…how many pages do they think War and Peace is? Kay Bell writes in her Don’t Mess With Taxes blog that the floor of Congress has logged several attempts to quantify the length of the U.S. tax code. “At 1.3 million pages it is twice the length of Leo Tolstoy’s War and Peace,” said one House Representative, speaking of the United States tax code. Another popular reference for the code’s impressive verbosity – The Bible.
The quotes in the linked blog have yet to be fact-checked, but one assured fact is that the tax code in its entirety is a long, murky mess. The impulse to reform is strong, but before that happens, Bell writes, “make Congress leave the tax code alone for a while.”
Two-thirds of all taxpayers will claim the standard deduction on their tax returns. Except for non-resident aliens, married members filing separately and a few others who are exempt from using the standard deduction, that leaves the smaller portion of taxpayers who discovered a larger return when they itemize their deductions.
This year the standard deduction amount is $5,800 for single taxpayers and $11,600 for married. As head of household, that number is $8,500. There are a couple of other exceptions, writes Kelly Phillips Erb for Forbes, including age and blindness.
If you have successfully and cleverly negotiated with a credit card company to cancel some of your debt in lieu of a smaller bulk payment, well done. Good on you, and go forth with your new budget, etc. Just don’t be surprised when you have to pay taxes on the total original debt. Because you do, writes Kay Bell for Bankrate.com. It is one of the more sour tax surprises that people face.
A small as-seen-on-tv outfit called Taxmasters Inc. raised red flags when it filed for bankruptcy on March 16. The company had been rebuked in Texas and in Minnesota for what seemed to be dubious business practices for claiming they could help taxpayers who owed the IRS by making their problems go away. Janet Novack writes for Forbes that the company, at the time of the bankruptcy filing, had about 5,000 creditors and $5,000 in assets. The company had advertised on cable networks, especially on cable news channels, that it had expert information on how to alleviate one’s tax responsibility.