CNN Money surveyed 31 economists for their economic forecasts and asked what they would recommend Congress doing about the expiration of the Bush tax cuts. From a list, eighteen of the thirty-one chose to extend the tax cuts for everyone, not just those outside the two top tax brackets. Three of the thirty-one supported President Obama’s proposal and nearly all of them opposed doing nothing and letting the cuts expire.

For those not entirely familiar with the backstory on this, President Bush signed into law back in 2001 and 2003 a series of tax cuts now known as the Bush tax cuts. It lowered tax brackets, capital gains taxes, and are set to expire at the end of this year. With the sunset provisions set to take place in a few months, there has been much debate on what should be done. President Obama’s proposal would extend the tax cuts for all but the two top tiers, individuals making more than $200,000 and families making more than $250,000. If Congress were to do nothing, tax rates would increase back to pre-Bush tax cut levels.

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The best kind of benefit is a fringe benefit, right?

As it turns out, the IRS has a guide for Federal, State, and Local Governments (FSLG) governing the tax rules of fringe benefits and the reporting of fringe benefits! We ran into this the other day as my lovely wife was signing up for a parking pass at her school. As a graduate student, she’s technically faculty and an employee. Since it’s a public university, the University of Maryland, that makes her a government employee.

So she’s signing up for this parking pass and one checkbox surprised her:

I understand and agree that by giving authorization to have automatic parking deductions taken out of my paycheck the deduction will be on pre-tax basis and will not be included in my Federal, State or FICA wage base.

That’s when she asked me if she was reading it right – “Does that mean I’m paying for my parking pass with pre-tax money?”

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Despite what you feel about President Obama, you have to appreciate the sheer amount of work he’s managed to get Congress to do in the few years he’s been in office. Whether or not they’re the right things to do will remain to be seen, but one topic that is sure to take center stage within the next few months, if not weeks, is what we should be doing about the soon-to-be expiring Bush-era tax cuts.

A little history for those of us who weren’t paying taxes before 2001 (that includes myself, at least on any meaningful level). President Bush signed the Economic Growth and Tax Relief Reconciliation Act of 2001 and made one of the largest tax cuts we’ve seen in quite some time. Among other things, the EGTRRA (quite an acronym) lowered every tax bracket, lowered capital gains tax, and effectively lowered the tax burden on every single American. If you remember, this was the boom years of the Internet dot-coms and the economy was doing great. As a way to make the debt and deficit math look more palatable, the cuts were given a sunset provision of December 31st, 2010.

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One strategy that seems to work well for people looking to conquer bad spending habits is to convert purchases into hours of work. A $4 latte, the classic enemy of frugalists everywhere, doesn’t seem too expensive because it’s only four dollars. If you only earn minimum wage of $7.25 an hour, that’s nearly half an hour of work before you take taxes into consideration. Is a cup of coffee worth half an hour of your life?

This is why the strategy works and here’s how you can start using it.

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There have been a lot of news reports of a potential 3-month extension of the $8,000 Homebuyer Tax Credit and those reports are all correct, albeit a little misleading. The bill they voted on would extend the deadline for closing a home sale as long as there was a signed contract by the original signing deadline of April 30th. So this doesn’t extend the tax credit itself, just the deadline for paperwork process. If you didn’t have a signed contract by April 30th, nothing has changed for you. If you did and the process has dragged on much longer than you planned, then you’ll get until April 30th (as long as the measure passes the Senate).

The House of Representative voted 409 to 5 to pass HR 5623 Homebuyer Assistance and Improvement Act of 2010. The measure will now go to the Senate for a vote and, assuming they approve it, will go to President Obama for signature. The Senate had included a similar provision in a much larger tax package that didn’t secure enough votes.

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You won’t have a bigger fan of a Roth IRA. I’ve been a fan of them every since my dad told me about them over ten years ago. Back then, the appeal was in not having to keep track of capital gains and losses for tax purposes. As a kid with little understanding of personal finances and a healthy appreciation for the law, that seemed paramount. Nowadays, it’s the tax free investing that appeals to me and every other fan of the Taxpayr Relief Act of 1997.

The Roth IRA conversion income limits were removed this year and mainstream media pounced all over the topic of Roth IRA conversions. Until this year, you could convert if you earned less than $100,000, but this was the year the floodgates were opened. It seems like a no brainer, but there are significant and immediate consequences to converting a large amount into a Roth IRA. The allure of tax free investing and accrual is very strong, but there are many considerations many experts are overlooking.

At the core of these consequences is your income. Roth IRA conversions have a funny way of increasing your income significantly, especially if you’re making a large conversion from an IRA you’ve accumulated for years. Even five or ten years of diligent saving can result in a boost you are likely unprepared for. While it’s straightforward to calculate how much additional taxes you’ll owe, that’s simple math, it’s harder to see all the consequences of a much higher income.

All of these consequences are income based benefits you may lose as a result of higher income. Even if these don’t apply, hopefully they will get your brain on the right track so you can think of the benefits you might lose from having a higher income.

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It’s always tricky remembering how long I should keep financial documents so recently I began cheating by electronically scanning all my documents to my hard drive. I was able to save all the documents I really didn’t need, but was apprehensive about shredding forever, and created electronic backups for the documents I knew I should keep. It was the best of both worlds.

The end result, though, was a collection of poorly organized files. To help me create a system, I began reading online. When the NY Times Bucks blog talked to Alicia Rockmore, co-founder of Buttoned Up, she recommended a year-based file system.

“Have one file for everything that is tax- or finance-related per year,” she said. Then, download electronic records available online to the files and scan in paper copies of other documents as well.

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If you bought a car between February 16, 2009 and January 1, 2010 (non-inclusive), and you paid a sales tax or excise tax, you may be able to deduct it from your income taxes. This was one of the provisions of the 2009 American Recovery and Reinvestment Act. The car, light truck, or motorcycle has to weigh less than 8,500 pounds and you must have purchased it new. You cannot take the deduction if you purchased a used car or if you leased it and this deduction is not related to the Cash for Clunkers program. You can deduct the sales or excise tax up to the first $49,500 of the purchase price. If you live in a state without a sales tax, like Delaware, you can deduct other fees and taxes as long as they’re collected by the government on sales. Fees collected by the dealer are not deductible.

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