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DeTaxUS Newsletter
Standing Up For Financial Liberty


Volume 2, Issue #11
November 2002


CONTENTS:
Introduction

  1. Tax News
  2. Joke of the Month
  3. Tax Tips
  4. Planning for 2003
  5. Resources
  6. Editorials & Articles

INTRODUCTION

Our Mission is to Abolish the Federal Income Tax

Together we will accomplish this mission

Quote: "Nothing so strongly impels a man to regard the interest of his constituents, as the certainty of returning to the general mass of the people, from whence he was taken, where he must participate in their burdens."
--George Mason, speech in the Virginia Ratifying Convention, June 17, 1788

This year's elections are over and we will have to live with the results for the next several years. Most of the pro-liberty candidates I voted for lost to the established major-party candidates with larger bankrolls. The media nationwide mostly ignored the smaller political parties and even left valid candidates out of most debates.

There was some good news though. Though Carla Howell's ballot initiative to end the income tax in Massachusetts lost, it garnered 45.4% of the vote. That means nearly half the people in that state are fed-up enough with the income tax to vote it down even though the initiative got very little publicity and was poo-pooed by all the established politicians. The next election should see an overwhelming majority in favor, because those who voted for it this time will likely vote for it again, and those who didn't will have more information on which to base their decision. The media won't be able to ignore the issue next time.

Nor can the politicians who were elected ignore it. This vote is a wake-up call telling the political bosses that they are losing control, that the tax slaves are ready to revolt, and they'd better not push them any further. It's time to roll back some of the oppressive taxes and give them some incentives to stay in their shackles, less they break free; for once they get a taste of freedom, they'll never go back to involuntary servitude. (At least not for a couple of generations.) The politicians know this, so they'll be very cautious about raising taxes in Massachusetts for the next few years.

I fervently hope that all the representatives we have chosen to govern us have the good sense to turn us away from the path this country and many states have been following for the past several decades - the path toward socialism and total control by government - and put us back on the path toward liberty and justice for all.

Send your comments to mailto:editor@DeTaxUS.com

Warmest regards,

Cory Layne
Editor



Quote: "Liberty, when it begins to take root, is a plant of rapid growth."
--George Washington, letter to James Madison, March 2, 1788




1.       TAX NEWS

IRS Announces Increase in Interest/Dividend Threshold

Internal Revenue Service tax form Schedule B, "Interest and Dividend Income," will become a distant memory for more than 15 million taxpayers starting with the 2002 tax returns that will be due in the Spring of 2003. The IRS announced that the supporting schedule on which individual taxpayers list interest and dividend income will no longer be required of taxpayers whose income from those sources is $1,500 or less. Dividend Exclusion

[Editor: This is great news. I did a return for a couple last spring that had dividends from 8 or 10 baby Bell companies that had to be reported individually though they totaled less than $100.]


==============


IRS Seeks 'Limited' Information From Companies to Identify Tax Cheats

According to an IRS statement the summonses would allow the IRS to obtain "limited information" from merchants who sold goods and services to offshore credit card holders. The IRS added that these companies may have information in their records as a result of everyday business transactions that will identify the individuals in question. More....

[Editor: Big Brother is getting bigger and more invasive every day.]


==============


New IRS Publication 3402 - Tax Issues for Limited Liability Companies

provides a brief definition of an LLC, what type of tax returns should be filed and how employment taxes are handled. It also discusses some of the pitfalls of an LLC. The code sections and regulations governing certain aspects of LLCs are also listed. The publication offers phone numbers, the IRS Web site address, and other publications that may be useful. It is now available in a downloadable format from the IRS Web site. Publication 3402




2.       JOKE OF THE MONTH

A New Definition for Service

At one time in my life, I thought I had a handle on the meaning of the word "service." The act of doing things for other people.

Then I heard the terms: Internal Revenue Service, Postal Service, Civil Service, Service Stations..., and I became confused about the word "service." This is not what I thought "service" meant.

Then one day, I overheard two farmers talking and one of them mentioned that he was having a bull service a few of his cows.

SHAZAM!! It all came into perspective. Now I understand what all those "service" agencies are doing to us...




3.       TAX TIPS

Tax Log

Make sure you write down all of your potential deductions. If you don't keep good tax records during the year, you will likely pay more taxes than you have to because you'll forget some deductions in the rush to get organized at filing time. It's always better to have too much documentation than too little.


==============


Child-Care Credit or Pre-Tax Dependent Care?

If you're a working parent, you may choose pre-tax dependent care benefits or claim the child-care credit, whichever works best for you. If you pay child-care expenses through an employer's plan, the amount you set aside for these expenses, up to $5,000, is not subject to income tax, social security tax or medicare tax. If you claim the child-care credit, the credit is equal to 20 to 30 percent of your expenses, depending on your income. When you claim the credit, you're entitled to the credit on a maximum of $2,400 if you have one child or $4,800 if you have two or more children. You should determine in advance which method works best for your circumstances.


==============


It Pays to Give

If you give gifts to customers or clients, the expenditures are deductible, up to $25 per client per year. The cost of sending customers holiday cards (what you pay for the cards and the postage) is deductible. If you're a corporation, LLC or self-employed, it comes straight off your gross income. If you're an employee, e.g., W-2 salesman, it's an itemized deduction from Form 2106.


==============


The Charitable Difference is Deductible

Suppose you buy a Christmas tree from the Boy Scouts. If you pay $80 for a 5-foot spruce, and 5-foot spruces are normally $50, the $30 difference is deductible. It's your donation to the Scouts. The same goes for a Hanukkah menorah or Kwanzaa candles. Anytime your purchase from a not-for-profit organization includes a donation, ask the selling organization for a statement that says how much of your purchase price is a charitable contribution.

If you used the breast cancer awareness postage stamp, you paid 40 cents instead of the 34 cents in effect when they were issued. The US Postal Service donates 6-cents from the sale of the stamp to medical health and research organizations. That's YOUR donation to charity and you may deduct it.


==============


The Boss's Gift

If your boss gives out turkeys, chocolates or other holiday gifts, they're not taxable, so you needn't claim them on your income tax return. However, if instead of a $35 box of chocolates you receive $35 in cash, you must claim it as income. Don't ask me why. It's still a gift, and either is deductible to the business, though limited to $25.00 per gift.


==============


Being Out-of-Work Can Be Taxing

Though it's been argued that unemployment benefits are insurance proceeds and should be nontaxable like life insurance paid to beneficiaries, the IRS holds that these benefits are taxable income under current tax law. You can file a Form W-4V to have part withheld from your benefits to avoid having to pay when you file your return.


==============


Quote: "A Man may, if he know not how to save, keep his Nose to the Grindstone, and die not worth a Groat at last."
--Benjamin Franklin, Poor Richard's Almanack

[Editor: A Groat was a British coin worth 4-cents. Aren't you glad we won the Revolution? Farthing, halfpenny, penny, tuppence, groat, sixpence, shilling, bob, pound, quid, crown. Thank goodness the Brits have gone metric.]




4.       PLANNING for 2003

Multiple Retirement Income Options

Saving for retirement should be one of your main financial goals. Take advantage of all options open to you. If you have a 401(k) at work, you may still contribute to a Roth IRA, as long as your adjusted gross income is under $110,000, if single, or $160,000, if you are married filing a joint return. You may contribute the lesser of $2,000 or 100% of your earned income to the Roth.

If you contribute to a 401(k) through your regular employer, but have a business on the side, you may also be able to contribute to a SEP account. The two plans must be aggregated for contribution limits, which vary depending upon the type of plan you have. Remember, putting just a few hundred more dollars away each year will reach your retirement goals sooner.


==============


A qualified personal residence trust (QPERT) allows you to transfer ownership of your home to your children or other relatives while you retain the right to live in the home for a specified period. It is just one of many estate-planning tools to consider.


==============


In a trust setup in which you are both the Creator and the Beneficiary, you are considered the owner of the trust, and the income is taxable to you each year. If you want to minimize taxes, consult a trust attorney. In an irrevocable trust (sometimes called Pure Trust) in which the Creator is neither the Trustee nor the Beneficiary, income is taxable to the beneficiary(ies) upon receipt of the income, but can grow within the trust tax-free until disbursed. The Trustee can control both the timing and the amount of payments to the Beneficiaries following the wishes of the Grantor/Creator to take advantage of variances in the tax laws from year to year.

NOTE: the Trustee is not required to follow the wishes of the Grantor.




5.      RESOURCES

If you right click a program that is minimized on your task bar, a pop-up screen will appear and offer you a menu.

Every once in awhile, when surfing the web, a screen pops up, usually an ad for something you may not want, and it has no controls, so that you can't get the junk off your screen.

Well, there is a way - click anywhere in the screen, and hit Alt + Spacebar. The same menu will pop-up as if it were on your task bar, and you can choose Close and shut the window.




6.      EDITORIALS and ARTICLES



Thanksgiving

Quote: "One of these days, the people are going to demand peace of the government, and the government is going to have to give it to them."
--Dwight D. Eisenhower

As Thanksgiving approaches each year I tend to start counting my blessings. Top on my list every year is: I'm thankful I was born in America. I've traveled quite a bit. Some 45 countries to date. And every time I come home I want to kiss the ground and thank the good Lord, because no matter how messed up our federal government is (and I am one of it's staunchest critics), there is no place I'd rather live than America. That's why I've chosen to stay here and fight for repeal of the slave tax rather than expatriate to some tax haven as quite a number of other disgruntled citizens have done.

I celebrated Veteran's Day the other day. I'm a Vietnam era vet. High on my list of things to be thankful for is: I never had to serve in Nam. I volunteered twice, being young and stupid, but thank the Lord, I was turned down both times. The Army had no need for my specialty in Nam so the closest I got was Yokohama, Japan.

I was quite the war-monger back then. Joined the Army at 17. I grew up wanting to be a soldier, and what was a soldier without a war? You couldn't be an Audie Murphy or Sergeant York or Guy Gabaldin in peacetime. Besides which, I figured war was nature's way of keeping the earth's population in check.

In 1966, a major I worked for and admired a lot told me, "Vietnam's not much of a war, but it's the only war we've got, so we'd better make the most of it." He'd served one tour as a Special Forces advisor a few years earlier and had just received orders to go back for a second tour when he said that. It got to be quite a war over the next couple of years. I never heard from or of him again. I've often wondered how he faired. I've also wondered if he changed his way of thinking as I have over the years.

Norman Vincent Peale said, "Change your thoughts and you change your world."

I'm not a hawk any more. If anything, I'm a dove now. A turn-the-other-cheek, forgive-them-for-they-know-not-what-they-do sort of dove. I don't want my 24-year-old son in another Nam. Or Iraq, or Afganistan, or Kosovo, or Somalia, or anywhere else he might be killed or maimed or turned into a basket case to satisfy some politicians' urge for power. According to the VFW, the US has had military personnel assigned in 45 "foreign wars" since the end of World War II. Most of them accomplished nothing other than to keep the military-industrial complex in business.

Most of all, this Thanksgiving I'll be praying for peace - peace between America and all other nations, peace between neighbors in every neighborhood, peace between you and me. And that's where world peace starts - from the bottom up.

What is peace?

It's defined in the dictionary as "a state of calm and quiet," and "a state of concord (as between persons or governments)." It doesn't mean we are in complete agreement or even that we like each other, just that we respect each other enough to deal with each other calmly and without rancor.

It means we acknowledge that the other person's rights to life, liberty and property are just as sacred as our own, and cultural differences (no matter how foreign to our own) are not to be trifled with. The Earth is large enough to accommodate a vast number of varied societies and none should be superior to or subordinate to any other. Especially, no force should be exerted by one person or government to subordinate another or to force one's culture, religion or political philosophy on them.

If we disagree, we have the right to withdraw our support, but we do not have the right to attack preemptively on the assumption that if we do not, the other party will attack us. Especially when there is no hard evidence supporting that assumption. Peace demands that we leave the other party alone and go about our own lives calmly.

Were America to set that example for the world, we would be ten steps closer to world peace than we will ever be by making threats and issuing ultimatums or trying to set neighbor against neighbor.

If you are wondering what this has to do with taxes, just think of the cost of one battleship, one bomber, one tank, or a million men and women in uniform drawing combat pay.

Happy Thanksgiving!

Cory Layne
Editor

Call, write or email your congressman and senators today.

You can look up contact information for your Congressman and Senators at:
US House of Representatives
and
US Senate

P.S. Your comments and suggestions are welcome. We will try to respond to all of them personally and will include a selection of them in future newsletters and on the DeTaxUS website. Send email to: Editor

P.P.S. Let us know how you feel about the income tax. Your opinion is always welcome. You can join our online forum to discuss tax issues by going to: DeTaxUS Forum

P.P.P.S. You can help by sharing our vision with other over-taxed Americans.


DISCLAIMERS:

The information contained herein is general in nature and is not intended as legal, accounting or tax advice by DeTaxUS, Inc. The reader should seek professional guidance prior to taking any action based upon this information. DeTaxUS, Inc. shall have no obligation to inform the reader of any changes in tax laws or other which may affect the information provided.

Portions of this newsletter may have been extracted from articles received for republication. Credit is given where the author is known. Unsigned articles and information gathered from government publications and websites are accepted as public domain.

Copyright© 2002 by DeTaxUS, Inc.
All Rights Reserved. Written permission is required to copy or republish any portion of this document.



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