​We are now approaching Labor Day weekend and even if astronomically we are not leaving summer for a few more weeks, everyone returning to school says that the season is really over. I did want to mention a couple things about that season still, though, before we leave it behind.

First, when the kids are home for the summer, this can often leave families who don’t need childcare during the school year with an extra bill for those months. And although this then certainly can add a little bit of financial stress at the time, if you hold onto the receipts documenting the care, it can help a bit with a credit come tax time.

One thing I especially wanted to highlight with this is that this doesn’t have to only involve what is traditionally thought of as childcare but can also include expenses for summer camps that kids under 13 attended.

As a final note, this credit does have a maximum, so it’s not as if you will see every dollar spent coming back to you, but it could still be thousands of dollars that won’t feel so bad that you had to pay if you take advantage of the credit.

And now with everyone returning to school, remember that does not only include students, but also the teachers at the head of the classroom. But they can also enjoy a little tax relief with a deduction for classroom expenses that they pay for out of their pocket. Granted, the limit for this is $300 – and this seems painfully small for what I imagine many teachers end up paying out of their pocket over a school year - but hey, it’s still $300 that a teacher can get for a deduction by saving a few receipts.

And hey, maybe one can even get some of that by buying pumpkins for a classroom project come fall. There has to be something good about that season, too, no?

Warmly,

Josh Bousquet
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I have said it before in this space, but this appears to be a time for a good reminder – being immediately reactionary rarely leads to good outcomes. I mean, sure, sometimes big things happen, but do you know how often? Rarely, that’s why they’re big things.

This just seems to be hitting from many sides lately, though. First, stocks have been all over the place.

Then there’s the question of whether Americans are still traveling or are they pulling back and this is a sign of something bigger happening?

Or is this really a lot being made of not that all that much?

And just as a side note, why not throw on top of all this the fact that the election is still coming up and we are bombarded with stories and questions about what one candidate’s plan or the other will mean?

And oh yeah, have you noticed how dire and blown out of proportion some of those claims can be?

All this coming together at once makes it a time to caution that it is one thing to be aware of what is happening and open to seeing where it goes, it is another to jump to apocalyptic outcomes. The latter will lead to good decisions only in those rare times but will weigh too heavy on the mind on all occasions. So take a step back and breathe.

Warmly,

Josh Bousquet
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I obviously write about taxes a lot in this space, but we really don’t ever discuss exactly what is a tax. It seems more to be one of those things that we understand on some level, we know it when we see it, but putting a specific definition to it can be difficult. That difficulty probably largely comes from the fact that we see taxes assessed in so many different ways in so many different places that summing them all up together becomes tricky.

This is something that is apparently working its way through the courts now as recently the Fifth Circuit Court of Appeals has ruled that the Universal Service Fund, which appears on cell phone bills, is a tax. This doesn’t seem big, but it also ruled that it is then unconstitutional because of that. See, the Constitution gives taxing authority to Congress, but the USF has been delegated to the Federal Communications Commission, which then subdelegated the taxing power to a private corporation. This private corporation then relied on the actual telecommunications companies to determine how much customers would have to pay for the USF – and it’s not as it the consumer has any choice on what that number is, it is one of those things that just shows up on your bill.

Of course, there’s a lot of legalese going on here and it’s only bound to get worse. The case is likely going to the Supreme Court for another ruling, and then I am not even going to pretend to be able to guess what could possibly change coming out of it.

One must think it can’t get much more convoluted, though, than going through this long line of powers, be they inherent or delegated, before they reach the actual phone users. And along those same lines, I figured that even if I can’t give a concise answer as to just what a tax is, that it couldn’t be bad to at least offer a reminder about how messy these ideas can be.

Warmly,

Josh Bousquet
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When it comes to made-up days of national celebration, they can certainly range from humorous to mind boggling. On the one hand, this blog s coming out on National Raspberries N’ Cream Day (ooh, yummy). On the other hand, this is coming out on National Sea Serpent Day (ew, yuck). No matter how we feel about them personally, though, they exist because someone somewhere wants people to notice something.

The IRS jumped in on this last week by getting behind National Whistleblower Day on July 30. And when you break down some numbers, it does show itself as something the agency would like to note.

First, I definitely wish I could be a whistleblower myself as since giving out its first award in 2007, the IRS has paid over $1.2 BILLION in awards for those who have helped collect about $7 billion from non-compliant taxpayers. Next, I had to break down percentages and start to wonder if the whistleblowers weren’t getting a little more than seemed right. But hey, this has resulted in a net of about $5 billion recovered, and that had to help someone’s budget in the government.

“The IRS appreciates the valuable contributions that thousands of whistleblowers have made to help bolster the fair and effective enforcement of our nation’s tax laws,” IRS Whistleblower Office Director John Hinman said. “Information from whistleblowers continues to be an incredibly effective aid to IRS compliance efforts, and we are committed to improving our whistleblower program by increasing our capacity to use high-value whistleblower information effectively, awarding whistleblowers fairly and as soon as possible, and keeping whistleblowers informed of their claim’s status and the basis for IRS decisions on claims.”

In the end, if it only costs a percentage of what is recovered to collect unpaid taxes, then it seems like a project that works. This is even if whistleblowers earn between 15-30% of what is recovered, which sounds like a pretty good payday. I also can’t help but wonder, though, if there are a number of whistleblower complaints that turn out to be insubstantial and waste a lot of time and resources.

Now is this something that is so wonderful that we should have a day to celebrate it? It’s probably a little more complicated than that, to be fair.  But I do believe that it’s at least a situation that could use a little more thinking about, so let’s just call today National Think About It Day.

Warmly,

Josh Bousquet
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