Posted on December 24, 2013December 6, 2018 by Jan Roberg

5 Things You Probably Didn’t Know About Santa’s Tax Return

What about Santa’s taxes? Here’s a few things I bet you haven’t thought about before.

1. Given that Santa travels about 75 and a half million miles a year (mostly on December 24th) his mileage deduction (at 54.5 cents per mile in 2018) is $41,147,500.

2. Reindeer are depreciated over a period of 7 years.

3. North Pole elves are considered employees and receive W-2s. Elves outside of the North Pole are considered contract labor and receive 1099s. (There are people who work as “elves” outside the North Pole that work for other organizations–like at the mall, who receive W2s, but they are not real elves and are not employed by Santa himself.)

4. Because the elves live at the North Pole for the convenience of their employer, and since living at the North Pole is a condition of employment, elf lodging is not taxable to the elves.

5. Santa doesn’t actually make any money from his toy distribution operation. Most of Santa’s income comes from royalties from his guest appearances in movies, books, and television commercials.

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Footnotes:

1. Santa’s distance traveled: The Physics of Santa, http://www.daclarke.org/Humour/santa.html

2. Reindeer depreciation: IRS publication 225 Farmer’s Tax Guide

3. Elves are employees: Common Law Rules of employment, http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-Employee

4. Elf housing: IRS publication 15B Employer’s Tax Guide to Fringe Benefits

5. Santa’s income from royalties: https://en.wikipedia.org/wiki/Royalty_payment

Posted on November 1, 2013May 31, 2016 by Jan Roberg

Tax Refund for Christmas 2013

Photo by B Rosen at Flickr.com

If you normally use your income tax refund to pay for your Christmas presents, listen up. You’ve got a problem.

First, nobody is doing Christmas loans. Remember when H&R Block and Jackson Hewitt used to provide loans against your refund? Then the IRS changed the “debt indicator” which made it almost impossible for anyone to offer those loans. A few companies provided Refund Anticipation Loans, (the loans where you got your refund in 1 or 2 days instead of two weeks) but they were few and far between. Most people had to wait for two to three weeks to get their refund.

Now the IRS has announced that tax filing will be delayed—meaning that instead of accepting tax returns on January 21^st like they had previously announced—they won’t accept returns until January 28^th, and maybe not until February 4^th.

What does this have to do with Christmas? Well, if you’re putting holiday gifts on your credit card in the hopes of paying it off with your tax refund—you’re not getting your refund until mid to late February at the earliest. If you can’t afford to pay your credit cards without your tax refund—you’ve got a problem.

So what other options do you have? For some people, if you know that you’re going to have a refund on your taxes, you can change your withholding now so that you get more money in your paycheck. If you’re reading this in October or early November, you’ve got a chance to put away some extra cash for presents. If it’s already December by the time you see this—it’s probably too late.

Here’s something else you need to know. If you have your taxes done by one of those corner shop tax companies, they will gladly take your money and tell you that they’re filing your return. You might think that you’re filing on January 3 or 4^th, but you’re not. What they’re doing is “stockpiling” your return. They hit a button, it gets sent to a big corporate server, but it just sits there until the IRS says they’re accepting returns.

Why is that important to know? Because people think that they need to file early to get their refunds. But those early returns are often wrong. They’re missing information, or the software’s not fully functional yet. The IRS needs time to work out the glitches and if the IRS is having glitches, so are all the other tax companies. If you have the big green tax company send your tax return to their server and then you discover a problem with it, you can’t take your tax return back. It’s too late. And if your tax return is sent in with a mistake it could delay your refund for weeks, or even months.

There aren’t a lot of options out there for using your upcoming tax refund to pay for this year’s holiday gifts. But you know what? Christmas comes every year. Every year! Once you do receive your refund, it might be the only time in the whole year that you’ve got extra cash. Take some of your refund money and stick it in the bank so you’ve got cash to pay for your 2014 Christmas. Seriously, you never want to be dependent upon the IRS for you to have a Merry Christmas.

Posted on December 25, 2012December 6, 2018 by Jan Roberg

Santa and the IRS

Parody about Santa Claus being audited by the IRS

Who knew Santa kept receipts?

Roberg Tax Solutions will be closed from December 24th – January 3rd. Generally, confidentiality rules prevent me from sharing client information, but our very special client has authorized the release of his personal information so that our clients may understand why we will be closed that week. We were recently contacted by Mr. S. Claus concerning this letter that he recently received from the IRS. What follows is our correspondence on behalf of our client with the IRS.

IRS: Mr. Claus, It has come to our attention that you have never filed a US Income Tax return, despite that fact that you have been receiving US business income. We have gone back as far as 1913 and estimated your income and taxes and have determined that you owe the IRS $16,345,619,841.61 including penalties and interest.

Roberg Tax: Dear IRS, Don’t you think it’s a little absurd for you to be charging tax back to 1913? What about the 10 year statute of limitations on collections?

IRS: The 10 year statute does not apply if a tax return was never filed. Therefore, we demand full payment for all years in question.

Roberg Tax: But Santa doesn’t receive US income, he delivers gifts for free.

IRS: Mr. Claus has been receiving his income in the form of barter. He has been receiving cookies, milk, and reindeer carrots for years as payment for his deliveries. We understand, Ms. Roberg, that your parents used to leave Santa beer but we have been gracious enough not to impose federal alcohol excise taxes on Mr. Claus at this time.

Roberg Tax: Well thank you for your generosity on that point, how could you possibly know my Dad used to leave Santa beer?

IRS: We have our ways. We know lots of things.

Roberg Tax: I don’t think I want to know! Anyway, you’re arguing that Santa runs a business in the US and gets paid with milk and cookies. Therefore, since his operation is a business, then he gets to deduct his business expenses which certainly exceed any revenue he could possibly receive from the milk and cookies he receives, therefore he owes no tax.

IRS: Not so fast! Only a legal business may write off expenses. Santa does not live in the United States and he flies into the country illegally—thereby voiding any expense deduction that he would otherwise have been allowed to claim.

Roberg Tax: So you’re calling Santa’s delivering of toys a criminal activity? But if he has proper permission to enter the country, then his business is legal and he may deduct his business expenses which would make his tax bill zero. Is that correct?

IRS: Well, it will work on the business income, but we’ll probably be asking for his federal fuel excise tax on the reindeer.

Roberg Tax: I don’t believe that reindeer feed falls under fuel tax guidelines.

IRS: We’re reaching. We’ve got to close the tax gap and the fat guy could be our ticket out of trouble.

Roberg Tax: Don’t call my client fat, he prefers the term, “Jolly.” And you can’t use Santa to solve the federal deficit. That’s Congress’ job.

Anyway, we’ll be closed for the week. I’m going to be spending my time with a very nasty IRS agent, who really should be dropping this case if he doesn’t want to stay on Santa’s naughty list. We’ll all be back in time for tax season. Don’t you worry about Santa, we’ve got him covered.

Merry Christmas.

Posted on December 23, 2011May 31, 2016 by Jan Roberg

Santa Gets a Double Check

Roberg Tax Solutions will be closed for business this Christmas. You know how Santa makes his list and checks it twice, don’t you? Well his list is really long this year and since we’re experts at double checking — guess who Santa called to help? Besides, the price was right – we work for Santa pro bono. (Besides, the cocoa is so good up here it’s worth it!)

May you have a very Merry Christmas and a Happy, Healthy and Profitable New Year!

Now if you’re familiar with my website, you know I hardly ever let anybody post links on my blog. But I’m putting these in just for some holiday fun.

If you want to learn about Snowy, a rare white reindeer, here’s that story:
http://www.dailymail.co.uk/news/article-2070791/Rare-snow-white-reindeer-puts-Whitby-garden-centre-visitors-mood-Christmas.html
The picture of the baby reindeer is just too cute.

If you’d like to track Santa through Norad on Christmas Eve, here’s a link to their website:
http://www.noradsanta.org/en/index.html

Switching holidays; for a fun Hannukah Music video listen to the Maccabeats sing “Miracle” here:
http://www.youtube.com/watch?v=oHwyTxxQHmQ&feature=related