Author: Debra Watkins

Will the Bush Tax Cuts be Reinstated?

The problem:  how to tackle the deficit.    Not extending the cuts immediately raises taxes on everyone.  Spending cuts are difficult since Medicare, Social Security, and Medicaid represent 50% of our budget by 2015 (  Peter Orzag ).  The other half of our budget is split 50/50 between interest payments on US debt and discretionary spending.  The discretionary spending is 50% defense and 50% non-defense.

Here’s an opportunity  for you to try your hand at balancing the budget.  Especially pay attention to the revenue options:  you’ll find many of the tax effects you may face in 2010.

Get a Pencil.  You’re Tackling the Deficit.

Tracking Travel & Entertainment

Capturing expenses on the road is important  for completing expense reports for your employer or for creating complete and accurate records for your federal tax return.

Credit network processors like Visa and MasterCard and banks have been developing new tools for corporate customers in anticipation of a rebound in business travel, reported Martha C. White  (NYTimes).

Concur Breeze was developed with American Express.  There is an app for all three smart phone platforms.  Take note small business:  the first two users are always free and the software integrates into Quickbooks.  Here are reviews.  To use the mobile app, you need to set up account at www.ConcurBreeze.com, then return to the app store with a mobile PIN.

Fyi, in fall of 2009, Intuit, the maker of Quicken, acquired Mint.com for personal finance and budgeting.  Free apps are available.    Searching for Quicken iPhone apps returns Quicken Online Mobile, but an iPhone  app store search does not return that app.  Mint has a blog that reviews financial apps.

So, Who’s Counting?

Researchers have tracked Tweets to see which part of the country is happy or if our mood changes during the week.  Here is evidence that retailers will use sales information to change the way merchandise in their stores is organized.  I think this is how Wal-Mart “realized” consumers were having stay-cations.

At the height of the recession in 2008, Wal-Mart Stores realized that consumers were “cocooning” — vacationing in their yards, eating more dinners at home, organizing family game nights. So it responded by grouping items in its stores that would turn any den into an at-home movie theater or transform a backyard into a slice of the Catskills. Wal-Mart wasn’t just selling barbecues and board games. It was selling experiences.

But Will It Make You Happy? By STEPHANIE ROSENBLOOM

PACT (Prevent All Cigarette Trafficking) Law Now in Effect

A bit of legislative trivia.  Note that Cigars are exempt.

The legislation titled “Prevent All Cigarette Trafficking (PACT) Act,” was passed by Congress and signed into law by President Obama on March 31, 2010.

Effective immediately, the U.S. Postal Service® cannot accept or transmit any package that it knows, or has reasonable cause to believe, contains nonmailable smokeless tobacco or cigarettes.

Cigarettes, including roll-your-own tobacco, and smokeless tobacco are considered “nonmailable” matter, unless the shipment falls within certain exceptions. The acceptance and transport of packages containing cigars is not prohibited under the Act.

Read More USPS.com.

Texas-The World’s 11th Largest Economy

Comptroller’s Economic Outlook

“The Texas economy, the world’s 11th-largest, continues to fare better than those of many other states. But Texas felt the effects of the worldwide recession during 2009. Despite the state’s economy contracting in 2009, Texas’ relative economic advantage should continue as the state and U.S. economies turn around and expand again in 2010. The Comptroller’s office estimates that Texas’ gross state product will grow by 2.6 percent during calendar 2010. The U.S. economy should grow at a slower rate of 2.0 percent during the year.”

Read more of Susan Comb’s remarks.

In support of Entrepreneurs and Small Business

David Brooks column in the NY Times, An Economy of Grinds, emphasises that the economy will continue to creep along until the business climate for “the country’s loners, its contrarians and its narrow, ambitious outsiders”  is “wide-open” with an “atmosphere of general confidence”.  Brooks calls these outsiders The Grinds.

Here’s a link to the article:  An Economy of Grinds.

Traveling Mercies

As  you travel this summer, take care with your credit card.  Joe Sharkey writes that “Credit Card Hackers Visit Hotels All Too Often”:

A study released this year by SpiderLabs, a part of the data-security consulting company Trustwave, found that 38 percent of the credit card hacking cases last year involved the hotel industry. The sector was well ahead of the financial services industry (19 percent), retailing (14.2 percent), and restaurants and bars (13 percent).

Read the full article.

Homebuyer Credit

On June 29, the House of Representatives by a vote of 409–5 approved H.R. 5623, the Homebuyer Assistance Improvement Act of 2010. This bill would provide first-time homebuyer credit relief to taxpayers who can’t meet a key June 30, 2010, closing date.

H.R. 5623 would amend Code Sec. 36(h)(2) to provide that if a written binding contract to purchase a principal residence was entered into before May 1, 2010, the credit may be claimed if the purchase is closed before Oct. 1, 2010. Thus, this extension would allow homebuyers who signed a contract no later than April 30th deadline to complete their closing by the end of September.

The three-month extension of the closing date is intended to provide tax relief for those who couldn’t close on time because of backlogs at lenders and federal programs involved in homebuyer loans. In the words of the bill’s supporters, the three-month extension “will give time for all the new mortgages to be processed and not punish those homeowners who have been delayed through no fault of their own.”

The Senate will likely vote on the bill by July 1.