The Michiana Blawg

Golf Cart

2010-02-22T16:48:25Z

There’s a tax credit for plug-in electric vehicles. The credit is in the $4,000-$6,000 range.

This is potentially huge for people in those big retirement communities where everyone revs up their golf cart hogs to get around Condo Phases 1, 2, 3, and 4.

Unfortunately, the IRS has recently ruled that, in order to qualify for the credit, the golf carts must be street legal, which knocks out the vast majority of such carts. I wouldn’t be surprised if an enterprising cart manufacturer comes up with a low-priced version that qualifies for street use, but don’t hold your breath: the carts would have to meet federal safety standards, the IRS says.

Cap It

2010-02-17T12:44:04Z

You pay 7.65 cents in Social Security taxes for every dollar you earn . . . until your wages hit $106,800. At that point, the SS tax ceases. It’s call the Social Security “wage base.” The amount is indexed for inflation, but it didn’t go up in 2010 and it’s not expected to go up in 2011. The reason? Social Security recipients didn’t get a cost-of-living hike in 2010 or 2011. By law, the wage base can’t go up if benefits don’t rise.

Of course, Congress could just change that law, but such two-facedness would be rare, even for the Beltway (”You old guys don’t get an inflation adjustment, but you younger guys pay more like there was an inflation adjustment”).

The wage base, incidentally, is projected to start climbing again after 2011: to $111,3000 in 2012 and $115,200 for 2013.

Surfin’ SEC

2010-02-03T12:55:38Z

I say “let ‘em surf.” It’s probably the most-useful thing they do all day: “The work computer of one regional supervisor for the U.S. Securities and Exchange Commission showed more than 1,800 attempts to look up pornography in a 17-day span: ‘It was kind of distraction per se,’ he later told investigators. But he wasn’t alone. More than two dozen SEC employees and contractors over roughly the past two years have faced internal investigations after they were caught viewing pornography on their government computers. . . “. Link.

Repealed!

2010-01-11T22:03:36Z

It’s not as sweet as the repeal of Prohibition, but the Estate Tax has been repealed . . . for now . . . and only temporarily. Under convoluted earlier legislation, the Estate Tax was scheduled to go away as of 1/1/2010, but then scheduled to come back on 1/1/2011 with a mere $1 million exemption (in 2009, the exemption was $3.5 million). The 2009 Congress meant to act on it but failed, so right now, the Estate Tax is repealed for 2010 and will come back on 1/1/2011.

Important note: Many members of Congress, especially Democrats, want to bring back the Estate Tax during the next legislative section and make it retroactive to 1/1/2010. Such retroactivity, though, has constitutional hurdles.

We’ll see.

New Mileage Rate

2010-01-05T22:03:42Z

The 2010 standard mileage rate is now 50 cents per mile, which is a reduction from 2009’s 55 cents. The reason: lower fuel costs.

But are they really that much lower?

Scrip That Deduction

2010-01-05T21:59:55Z

Does your favorite charity offer scrip cards? With a scrip card, the charity buys scrip from retailers at a discount, then sells the scrip to supporters at full value. The difference between the amount paid by the supporter and the amount paid by the charity is the charity’s “profit.” The difference is also tax-deductible to the supporter, if the supporter has the option of receiving the discount margin in cash. (Added bonus: If the supporter keeps the discount margin, it’s not taxable.)

65% Extension

2010-01-05T22:00:55Z

The COBRA subsidy has been extended. Washington earlier passed a 65% COBRA subsidy, which was set to expire on December 31st. The entitlement has just been extended to February 28, 2010. The entitlement allows eligible individuals to receive a 65% subsidy of their COBRA health insurance premiums. The new law also extends the subsidy period from nine months to fifteen months.

Dispatches from Probate Court

2009-12-23T13:36:09Z

An email from our exalted local probate judge. Summary: Get your paws off that will . . . until the guy dies.

There have been extensive discussions among the Probate Registers as to whom may a Register disclose the existence and contents of a will filed for safekeeping with the Probate Court. Since there was a split of opinion among the Registers on how this question should be resolved, the Probate Judges decided to resolve the issue. Judge Murkowski of Kent County reviewed the matter.

His summary basically states that when a will is filed for safekeeping under Section 2515 of EPIC, the filing is NON PUBLIC. The Court receives the will in sealed form and can return the sealed will to the testator or designee during the lifetime of the testator. The will is never unsealed until the death of the testator. A court may not reveal to ANYONE whether a will is filed for safekeeping with the court, and because the will is sealed cannot reveal the contents of that will. The proper response to an inquiry whether a will is filed with the Court is “no public record exists.” A conservator cannot view a will filed for safekeeping. A conservator may examine a protected person’s will from a source other than a will deposited with the Probate Court. When a designee presents to the court the notarized authorization to retrieve the sealed will from safekeeping, the designee should produce picture ID that is photocopied, attached to the authorization form and retained by the court.

Once a testator has died and the Probate Court has proof of the death, the will can be unsealed and photocopies given to anyone for a fee.

Estate Tax Update

2009-12-05T15:52:29Z

According to the PBS News Hour last night, the House has passed the bill freezing the estate and gift tax at 2009 levels, which means a continued $3.5 million exemption. Whether the Senate acts, who knows. They’re bogged down with health care right now.

If nothing gets passed, there is no estate tax next year then the exemption drops to $1 million in 2011.

Maximum Security

2009-11-21T13:48:12Z

I’ve often wondered: With seven minor children, what’s the maximum amount my family would receive from Social Security if I died? The bad news is, I don’t get any credit for children four through seven. Benefits max out at three children. The good news is, based on my Average Indexed Monthly Earnings, my family would receive $4,424 per month. This would continue for about ten years (total pay-out: over $500,000), at which point my fifth child would reach age 19 and the monthly payment would start to decrease. When my youngest child reaches age 19 (fifteen years from now), it would end.