Well the House has started working on repealing the health care package passed last year. I know they feel they have a mandate to do this, but it seems like a waste of time. They will pass the repeal since the Republicans have a majority there and want the repeal, then it will go to the Senate, where it will never come to the floor since the Democrats have a majority there. Even if somehow it does get passed, Obama will veto it and there is not a chance Congress can override the veto. I wish they would do something more constuctive with their time, like fixing the tax code or trying to cut waste in government (good luck there; one man’s waste is another man’s re-election.) That is why for a long time Congress is the opposite of progress.
Brian’s Tax Musings
Let’s talk a little about hobby losses. If you have a enterprise you have started that you are not really running with the intent of making a profit, the hobby loss rules kick in. You cannot deduct expenses that are in excess of the income earned. There is a possibility in some cases you might take the excess deductions as a misc itemized deduction, but not always. The IRS considers an enterprise a hobby if you have not made a profit in 3 of the last 5 years including the current year, and 2 out of the last seven years including the current year for breeding, racing, training and showing horses. Here is a link to see the IRS hobby loss criteria:http://www.irs.gov/newsroom/article/0,,id=169490,00.htmlIt is important to remember that you have to have a viable business for the IRS to allow you to deduct losses. This means you have to make money sometimes. We can talk about your business and whether it will meet the IRS requirements to stand as a business.
Brian’s Tax Musings
On this Martin Luther King Day, let’s talk about a sore subject: Refund Anticipation Loans and Refund Anricipation Checks. Large Tax Preparation services have been offering RALs for years. After efiling your return they offer to loan you your refund for the 2 weeks it takes for direct deposit to put the money in your checking account. What a ripoff! They reduce the amount they give you by interest fees and their tax preparation fee (I am sure there are RAL setup fees also) then when the refund comes, they keep the total amount. The IRS finally had enough and told all the large banks not to fund these loans anymore. Now the big Services have a Refund Anticipation Check which isn’t a loan; they charge you to set up a checking account for your refund; after the account gives notice they have your refund, they give you a check for the refund less account set up and the tax prep fee. Cheaper than an RAL, but you don’t get the refund much sooner – another ripoff. Here is a link to an article spelling it out in detail: Article on RALs and RACs http://www.stltoday.com/business/columns/savvy-consumer/article_29f04b30-c421-581f-a6ab-ed1dc24df757.htmlThe amount you pay for these things is way too expensive; [...]