The Morning After

Well, tax day has come and gone. While everyone is still thinking about taxes, or as I like to say, suffering from a tax hangover, I wanted to let you know a couple of interesting tax facts:

• Arizona does not have a death tax or an inheritance tax. We use to have an estate tax but it was phased out with the changes of the Federal Estate Tax code. While some estates may pay an estate tax to the Feds, (th 2009 threshold is 3.5 million dollars before you pay a tax), you will not be paying any of this tax to Arizona.
• Most people pay more in state and local taxes than they do in federal taxes. If you factor in the various sales and use taxes, income taxes, property taxes, excise taxes (e.g. liquor, cigarettes, gasoline) and other state and local taxes imposed on the average taxpayer, you'll find that over half the money that you pay to the government never leaves the state.
• If you have a child, you usually get to claim more deductions. In our fractured society, however, the tax code is a mess when it comes to dealing with divorces. The question is basically which parent gets to claim what? There are all kinds of rules, but one of the stranger ones has to do with…kidnapping. If your child is kidnapped, you may get to claim the child tax credit and so on. Being a tax issue, there are some strange rules. For instance, the kidnapping cannot be by a family member! If your brother drags your child off to Canada, you get no deduction. You can read IRS publication 501 to figure it all out if you are insanely bored.
• I like this quote: "The hardest thing in the world to understand is the Income Tax." - Albert Einstein