As Life Goes Digital

McCain and Hillary Clinton are proposing federal gas tax holiday break this summer which means MINUS 18.4 cents of gallon gas price with no federal tax.

If the proposal is approved ....doing the math -- my car which gives 20 miles per gallon and $4.47 is the gas price for today (June 2'2008) in Chicago, IL === 0.04 Gallons of free gas i.e 0.8 miles free.

Hope they pass this law soon.

I always wondered what components make up a gallon of gas price - Here is the answer for $4.47 (premium unleaded) a gallon of gas for today consists of

3.26 = crude Oil
0.49 = taxes
0.26 = Distribution and Marketing
9.44 = Refining

I didn't come up with these numbers, CNN gave the % allocations here



If states allow state tax exemptions that would bring the gas price to $4.00.

Labels: taxes, Travel

Where is my Stimulus payment check ? If you haven't received it that means your Social security number - SSN number is not yet on the date list. Check out the dates below from IRS.

If you filed your 2007 taxes and requested direct deposit then you would get the stimulus payment ACH credited by US Treasury under tax refunds.




Here is the official IRS link

Labels: 2008, Investing, taxes

Citizens Against Government Waste (CAGW), a nonpartisan, nonprofit organization released 2008 Illinois piglet book which identifies $686 million in wasteful spending in the state budget. Here are the details.

Here is the list of Illinois state taxpayer dollars spent-



CAGW's 2008 Pig Book Digs Up $17.2 Billion (taxpayers dollars) in Pork. To qualify as pork, a project must meet one of seven criteria that were developed in 1991 by CAGW and the Congressional Porkbusters Coalition. CAGW maintains a vast pork database with 9000+ searchable projects by keywords. CAGW was in news when they directly criticized when state agencies mandated to use only opensource. CAGW says taxpayer dollars are justified in open bidding that gives transparency in the state agencies transactions. As often people confuse open source to free software. Software may be free but the costs of hardware and software maintainance are largely ignored and this is the reason that CAGW claims transparency in state agencies using "open" source software. But CAGW historically took the side of Microsoft on all of their monopoly legal issues. Tobacco industry is rumored to have paid hefty sums to CAGW to lobby for them.

Labels: Immigration, taxes

IRS started sending letters of Economic Stimulus Payment Notice and I received that by mail today. I scanned it and posted it here (see the image at the end of the post) for quick understanding of important points from IRS notice.

H1-B visa holders dependents may have a slight problem as letter indicates that dependents must have a SSN as in many cases dependents of H1-B visa holders are in H4 visa status and possess tax-id instead of SSN. Dependents are spouse and children who are on H4 visa. If you read through last but one paragraph of payment notice letter this clause is added by IRS. Does this mean H4 visa dependents are not eligible for economic stimulus package ? This if true makes these households receive lesser amount of $600 only.

The other important points outlined in this letter are as follows

- File 2007 tax return and that makes it eligible for 130 million households to receive $600 for individuals or $1200 for joint filers

-An additional amount of $300 for each child qualifying for the child tax credit

- For tax payers with adjusted gross income (AGI) of more than $75000 (or more than $150,000 if married filing jointly), the payment will be reduced

- the last one is important for immigrants or H1-B visa holders as the clause says "must have valid social security numbers"

Labels: H1-B, Immigration, refund, taxes

Do not forget to prepare your tax returns by April 15 (referred to as "Tax Day"). IRS deadlines are strict and follow strict penalties for late tax payers. These days with online softwares like Intuit's TurboTax Deluxe OR H&R Block TaxCut 2007 you can do your own income tax return. The choice of doing taxes by yourself or using a tax consultant (like CPA) depends on how complex are ones taxes.I bought a house with two mortgages and did numerous (company as well as from TDAmeritrade brokerage) stock trading this year so my choice going to be a CPA for year 2007 taxes.

Here is checklist of documents required to file taxes:

Proof of the income:

This includes W2s which are proof of income made through employers, interest from checking/savings accounts, dividends from stock investments, income made through self-employment like say Google Adsense or some other advertising revenues, and any other income. In my case I have my partial MBA Student tuition payments and other types of loans may also be considered income for the purposes of income tax, as can winnings from a lottery, casino, or other contest.It is always good to contact your tax adviser to know what qualifies as income for tax purposes

social Security Numbers:

You should have handy all social security numbers for everyone you will claim on your income tax return. That includes social security numbers for your spouse and any children you will claim. Without social security numbers, proof of residence, and birth dates, you cannot claim deductions on your income tax return for these individuals.

Deductions:

I have a mortgage, and interest paid to the mortgage company is tax deductible. If you use a vehicle or computers for business purposes, you can claim a tax deduction for mileage/usage.You can also claim tax deductions for charitable contributions.

Self-Employed:

Gather all your receipts for tax deductible expenses. A tax deductible business expense is any expense that is used solely or primarily for the business you are involved in. The tax deductible expense must be documented in order to claim it, so any receipts you have, usage logs for computers and vehicles, etc. should be gathered so that you can take the highest deduction possible.

Tax Forms:

An individual with few tax deductible items can file simple tax return. However, if you are self-employed you must also file a tax form called Schedule C.For lot of tax deductible items, you will want to file a more complex tax return to itemize your tax deductions.

Start gathering all of your required tax documents as early as possible, and be organized.



I like this video from "GOODMagazine" showing how our tax money is spent.

Labels: Adsense, Investing, taxes