Tax Solutions for Groundhog Day

Punxsutawney Phil came out of his hole this week, as he does on every February 2nd, with a winter-weary nation paying extra-close attention this year. Did the fearless 15-pound forecaster see his shadow or not? Are we really stuck with six more long weeks of winter? According to stormfax.com, Phil's forecasts are right just 39% of the time, which probably puts him on par with your local TV forecasters. But that doesn't stop upwards of 35,000 people per year from gathering before dawn to see the hardy rodent appear.

Back in the 1993 film Groundhog Day, Bill Murray starred as weatherman PhilConners, sent to Punxsatawney to cover the annual festivities. That night, a blizzard hits, forcing Phil to stay overnight in town. He wakes up the next morning to find it is February 2nd again; his day unfolding exactly like the day before. Ultimately he realizes he's doomed to live the same day forever - even by killing himself he can't break the cycle.

Since then, Groundhog Day has become cultural shorthand for living the same events over and over. So, what does all this have to do with taxes? Well, last week President Obama delivered his second State of the Union address - and his comments sounded depressingly familiar to those of us who follow tax policy:

• First, he called on Democrats and Republicans to simplify the corporate tax system. "Get rid of the loopholes. Level the playing field. And use the savings to lower the corporate tax rate for the first time in 25 years - without adding to our deficit."
• Next, he declared that, "the best thing we could do on taxes for all Americans is to simplify the individual tax code. This will be a tough job, but members of both parties have expressed interest in doing this, and I am prepared to join them."
• Finally, he stated that, "if we truly care about our deficit, we simply cannot afford a permanent extension of the tax cuts for the wealthiest 2% of Americans. Before we take money away from our schools, or scholarships away from our students, we should ask millionaires to give up their tax break."

Most Americans think tax simplification is a great idea. The problem, of course, is that hearing calls for tax simplification is like waking up to the same Groundhog Day over and over again. Lawmakers from both parties have sparred over corporate taxes since before former President Reagan offhandedly proposed eliminating them decades ago. They've floated endless plans to simplify personal taxes. They even have fought all year over extending the Bush tax cuts to the top 2% of earners - right up until extending them temporarily just a few short weeks ago.

Bill Murray was the perfect choice to make Groundhog Day into a hit comedy. If Hollywood made April 15th into a movie, they'd look for someone more like Stephen King to write it! But you don't have to wait for lawmakers to see their shadow before you can cut your taxes. The REAL key to minimizing that tax bill is planning. Most tax professionals do a fine job recording history. But we here at Tax Saving Solutions are here to help you write it. We'll even give you a full menu of deductions, credits, loopholes, and strategies. Punxsatawney Phil predicts you'll love the savings!