Journalist Gillian Tett warned about the problems in the financial industry long before many of her colleagues. In her new book, Fool’s Gold, Tett examines the role J.P. Morgan played in creating and marketing risky and complex financial products. Interestingly, in her interview with Terry Gross on Fresh Air, Tett responded that her training as an anthropologist allowed her observe what the financial industry was not talking about. This is how she spotted the problems in the derivatives market. Listen to the interview here.
Banker Think
John Kozy, a frequent contributor to Global Research, is a retired professor of philosophy and logic who blogs on social, political, and economic issues. After serving in the U.S. Army during the Korean War, he spent 20 years as a university professor and another 20 years working as a writer. He has published a textbook in formal logic commercially, in academic journals and a small number of commercial magazines, and has written a number of guest editorials for newspapers. His on-line pieces can be found on http://www.jkozy.com/ and he can be emailed from that site’s homepage. His essay on bankers, A Banker’s Economy, is disturbing in that it was published in August 2008, before most of the worst news about our banks had been disclosed.
Biographical information from Global Research.
Vehicle Sales Tax Deduction
The American Recovery and Reinvestment Act of 2009 included a new income tax deduction for state or local sales or excise taxes paid on qualifying 2009 motor vehicle purchases. This deduction is limited to taxes on the first $49,500 of the cost of the vehicle. Conversations with the IRS National Media Relations office verified that the deduction is limited to the first $49,500 of cost but is available for two or more vehicles.
Vehicles included are passenger autos, light trucks and motorcycles and motor homes. However, these vehicles must be new and their original use must begin with the taxpayer.
The deduction is available to itemizers and in addition to the standard deduction for those that do not itemize. This is the second itemized deduction that is allowed to non-itemizers for 2009. The other is a real property tax deduction that is treated as an increase in the standard deduction of $500 ($1000 for married filing joint status).
We can’t do better than this
IRS reminds taxpayers about special tax break available for new car purchases this year [IR 2009-30]:
The Internal Revenue Service has announced that taxpayers who buy a new passenger vehicle this year may be entitled to deduct state and local sales and excise taxes paid on the purchase on their 2009 tax returns next year. “For those thinking about buying a new car this year, this deduction may give them a little more drive to make their purchase this year,” said IRS Commissioner Doug Shulman. “This deduction enables taxpayers to buy now and get cash back later on their tax returns.” The deduction is limited to the state and local sales and excise taxes paid on up to $49,500 of the purchase price of a qualified new car, light truck, motor home or motorcycle. The amount of the deduction is phased out for taxpayers whose modified adjusted gross income is between $125,000 and $135,000 for individual filers and between $250,000 and $260,000 for joint filers. IRS also alerted taxpayers that the vehicle must be purchased after Feb. 16, 2009, and before Jan. 1, 2010, to qualify for the deduction. The special deduction is available regardless of whether a taxpayer itemizes deductions on their return. The IRS reminded taxpayers the deduction may not be taken on 2008 tax returns.
Subprime lenders are being investigated by SEC for accounting fraud
The SEC’s investigation into the subprime mortgage mess now includes examinations of the financial statements of the mortgage lenders who are generally blamed for creating the disaster that has swamped the global economy. Lenders suspected of misstating loss reserves, asset values, or the prices on foreclosed properties are going to be pursued by the SEC, according to commissioner Elisse Walter. If a lender’s disclosures about loan quality, credit risks, rates of default, mortgage delinquency, and exposures to the subprime market were inaccurate, then chances are, its executives are going to be paid a visit from the SEC’s enforcement staff. Walter was testifying during a March 20, 2009, House Financial Services Committee hearing on investor protection and enforcement during the subprime meltdown.
So far, the agency’s enforcement division has filed nine cases involving subprime issues, and it has many other subprime matters under active investigation, Walter told lawmakers.
The subjects of the investigations to date are primarily subprime lenders, credit rating agencies, home builders, and companies that provided mortgages to investors to enable them to finance securities purchases. The agency is also looking at the investment banks that bundled the mortgages into securities and then sold them into the secondary market.
Source: WG&L Accounting & Compliance Alert Checkpoint 3/23/09
Shape up your budget
Did you know?
The average american family spends $1.22 for every $1 earned. Get on the financial scales and determine your current financial situation. What do you own and what do you owe (your net worth)? How much money do you make and how do you spend it? How much of it is used for things you absolutely need, such as rent, insurance premiums and credit card payments (fixed expenses)? How much do you spend for pleasure, on things like a new cell phone, pet care, clothing or vacations (variable expenses)?
A free budgeting worksheet is available at www.ValueYourMoney.org.
I.R.S. Plans a Deduction for Madoff Victims
The Internal Revenue Service will allow victims of Bernard L. Madoff’s investment fraud to claim a tax deduction related to the bulk of their losses, the I.R.S. commissioner told the Senate Finance Committee on Tuesday. Read More:
How much was my stimulus payment?
Your tax return preparer will need the amount of the stimulus payment that you received in 2008. You will need the following information: your social security number, your filing status, and the number of exemptions shown on your tax return. Here’s the link: IRS Stimulus Payment.
The American Recovery and Reinvestment Act of 2009
Dear CPA: Does this legislation affect 2008 returns?
Dear Taxpayer: Generally, no. The new legislation does not have any major impact for the vast majority of individuals preparing their 2008 tax returns due April 15. Instead, these changes will largely impact 2009 tax returns filed next year, in 2010. Taxpayers should continue to prepare their 2008 tax returns as they normally would. And remember, the sooner you provide complete and adequate information to your CPA, the sooner your return will be prepared!