TaxConnections


 

The Fair 55 Tax Reform Plan (Part 1)

Michael Caryl, Tax Lawyer

Preface To The Fair 55 Tax Reform Plan – By Michael Caryl

A number of smaller states, particularly the author’s home state of West Virginia, face serious budgetary challenges as a result of two conditions: (1) obsolete and unreliable revenue systems which discourage growth-creating investment and (2) excessive per capita state and local government spending.  The Fair 55 Tax Reform Plan (“the Plan”) was inspired and built upon West Virginia’s Fair Tax Plan of 1999, and is designed to comprehensively address those adverse conditions. Read More

Your 20% Flow-Through Tax Deduction May Be Limited

Chuck Woodson, Specified Service Trades or Businesses, SSTBs, qualified trades or businesses, QTBs, Tax Deduction,

As part of its recent tax reform, Congress included a new 20% deduction of pass-through income for trades or businesses other than C-corporations. This pass-through income is referred to as qualified business income (QBI); for trades or businesses, it generally includes bottom-line profits, and for S-corporations and partnerships, it includes K-1 flow-through income. This new law was added as tax code section 199A, so the deduction is often referred to as the 199A deduction. Read More

Congressional Record – Tax Cuts And Jobs Act (Part 16)

Congressional Record,

(This post directly follows the previous post which asked to oppose the language effectively repealing the Johnson Amendment for houses of worship.)

Ms SANCHEZ: Mr. Speaker, I include in the Record two letters in opposition to this bill, one from SEIU and one from the AFL-CIO. Read More

IRC Section 965 Transition Tax: Part 2

John-Richardson- Americans Abroad, Transition Tax, IRC Section 965, Canada,

The possible use of the Canada U.S. tax treaty to defeat the “transition tax”

Beginning with the conclusion (for those who don’t want to read the post)

For the reasons given in this post, I believe that there are grounds to argue that the imposition of the Sec. 965 “transition tax” on Canadian resident/citizens DOES violate the Canada U.S. tax treaty. It is my hope that this post will generate some badly needed discussion on this issue. Read More

2018 Employer Reimbursements For Employees’ 2017 Moves Are Generally Tax-Free

Employer payments or reimbursements in 2018 for employees’ moving expenses incurred prior to 2018 are excluded from the employee’s wages for income and employment tax purposes, the Internal Revenue Service announced today.

The 2017 Tax Cuts and Jobs Act (TCJA) suspended the exclusion from income for moving expenses reimbursed or paid by an employer for most employees starting in 2018, making these amounts taxable, except for amounts for active-duty members of the U.S. Armed Forces whose moves relate to a military-ordered permanent change of station. Read More

Congressional Record – Tax Cuts And Jobs Act (Part 15)

Tax Reform, Tax Code, House of Representatives

(This is a direct response to the previous post which asked to oppose the language effectively repealing the Johnson Amendment for houses of worship)

Mr. NEAL: Mr. Speaker, I yield 2 minutes to the gentleman from Kentucky (Mr. Yarmuth), the ranking member of the Budget Committee, and one of the most knowledgeable Members of the House.

Mr. YARMUTH: Mr. Speaker, I appreciate my friend yielding time.Mr. Speaker, this is a horror show today, this is a horror showdebate, and this is a horror show process, but it is a disaster for the American people. Read More

IRC Section 965 Transition Tax: Resistance Is Futile

transition tax, americans abroad, expatriate, canada

“This legislation is being interpreted by a number of tax professionals to mean that individual U.S. citizens living outside the United States are required to simply “fork over” a percentage of the value of their small business corporations to the IRS. Although technically “CFCs” these companies are certainly NOT foreign to the people who use them to run businesses that are local to their country of residence. Furthermore, the “culture” of Canadian Controlled Private Corporations is that they are actually used as “private pension plans”. So, an unintended consequence of the Tax Cuts Jobs Act would be that individuals living in Canada are somehow required to collapse their pension plans and turn the proceeds over to the U.S. government” Read More

Renouncing/Relinquishing Your U.S. Citizenship And Taxes

Citizenship, Expatriate taxes

We received a question from Denise from Canada.

The question is: “I’ve heard a lot of words to describe people who were no longer U.S. citizens – “surrendered”, “relinquished”, “renounced” U.S. citizenship. What is the difference between these three terms?” Read More

Rethinking Entity Choice In Light of Tax Cuts And Jobs Act

Until the inception of the Tax Cuts and Jobs Act, entity selection by businesses was a fairly easy decision.  In most cases, businesses chose a form of pass-through entity, given the high tax rate of thirty-five percent given to C corporations in the past.  With the new changes brought forth in TCJA, and the lower tax rate of twenty-one percent, change is in the air.  But what are the benefits of considering C corporation status?  Unless you are a very large company, determining if you should change from a pass-through structure to a C corporation will not be an easy one.  Read More

Congressional Record – Tax Cuts And Jobs Act (Part 14)

Congressional Record Part 14

SECTION 5201 EXEMPTS HOUSES OF WORSHIP FROM THE JOHNSON AMENDMENT

Section 5201 allows houses of worship to endorse candidates so long the endorsement is made during a religious service or gathering, is made in the ordinary course of their tax-exempt purpose, and does not incur more than a de minimis incremental expense. This would, in effect, exempt houses of worship from the Johnson Amendment. Read More

The Progressive, Creditable Implied Purchases Tax

A MODEST, SELF-HELP PROPOSAL ENABLING INDIVIDUAL STATES TO ADDRESS THE REMOTE SELLER TAX PROBLEM AND MUCH MORE

As the States’ and any Congressional responses to the United States Supreme Court’s 5-4 ruling in the remote seller sales tax enforcement case of South Dakota v. Wayfair, Inc., et al, 585 U.S.___ (2018) begin to emerge, this is to describe a simple proposal by which any individual state can effectively enforce its use tax on remote sales, mitigate the related compliance concerns of remote sellers AND enable its pursuit of other major state tax policy objectives. Read More

The Crazy Tax Laws Regarding Food!

Monika Miles, Food Tax, Multistate Tax, Online Tax

We write a lot of blogs! We’ve been writing a lot of blogs about the recent U.S. Supreme Court decision in South Dakota v. Wayfair and how companies selling goods online will be subject to much more compliance in upcoming months and years. But today, we decided to change it up and talk about something near and dear to everyone- food!

In most states throughout the country, consumers shopping at a supermarket don’t pay state sales tax on their bread and butter, but would pay sales taxes on a hot prepared turkey dinner. If they pick up a Hershey’s bar in the checkout line, is likely to be taxed, but if they pick up a Twix bar instead, it might be be exempt. Read More

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