Many states exempt groceries from sales tax per the premise that food is a necessity of life. This is a poorly targeted exemption though in terms of helping low-income taxpayers. Higher income individuals spend more on food so get the bulk of the tax savings. If instead, groceries were taxed, tax relief could be better targeted to the taxpayers who need it via a refundable income tax credit based on income.
Archive for Annette Nellen
One of the email alerts I received from the IRS recently was Tax Tip 2017-48, Helpful Tips to Keep in Mind When Amending Your Tax Return. I want to focus on tip #1 of the nine provided. Here it is:
It doesn’t seem that one’s filing status should be confusing. You’re single or you’re married. But, many people qualify for head-of-household status. That one is confusing because of its multi-faceted definition.
Years ago, the IRS had about 104,000 employees. Today it is around 83,000. Certainly, they don’t need as many people to open envelopes due to e-filing, but this change results in a big drop in taxpayer services and audits. A common lament I hear from tax practitioners is the challenge of having to deal with notices from the IRS. It is difficult to get to talk to someone from the IRS who has the knowledge and file access needed to resolve the issue and you likely need to wait 30 minutes or more to talk to someone.
Chief Counsel Advice 201710027 (3/10/17) states that determination letter requests, such as on Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, cannot be faxed to the IRS because an original signature is required.
You likely have lots of apps on your smartphone such as for shopping, interacting with hotels and airlines, social media, and lots more. You may have seen or heard about H&R Block’s 2017 Super Bowl ad about their artificial intelligence (AI) partnership with IBM (Watson). Per the H&R Block website, they are working with “Watson cognitive computing technology from IBM.”
Lots of drama on possible repeal/repair of the Affordable Care Act with the House vote postponed to Friday (March 24) (see CNBC story). There are a lot of tax provisions in the ACA. I’ll share a list of created of them based on when they went into effect (and the Cadillac tax has not yet gone into effect). And one provision was only added in December 2016 via bi-partisan legislation!
The tax law is difficult to understand due to its numerous special rules. This is apparent on just about every news show about the House Republican/President Trump’s bill to replace/repair the Affordable Care Act (aka Obamacare). Last night, I saw a bit of a CNN town hall with HHS Secretary Tom Price. Questions were raised about the bill providing significant benefits to high income/wealthy individuals. In addition to repeal of the Net Investment Income Tax (Section 1411), a comment was made by the CNN reporter about repealing the ACA rule regarding a compensation limit on high compensation of health insurance companies.
The House Republican plan to repeal and replace the Affordable Care Act (aka Obamacare) that was released on March 6 omits something that the House Republican health reform blueprint of June 2016 said would be included. The missing item is a big one, that if modified, would make the tax law more equitable, reduce health care spending, raise revenue (that could be used to help those without insurance), and help a lot of people know what their health insurance costs.
I define the sharing economy broadly as including both sharing assets and one’s time. Four characteristics:
- Monetizing unused time and assets.
- Using technology to match those with resources to those willing to pay for them.
- Providing assets where temporary need exists (such as bike share).
- Operating in the broadest space possible (including digital services provided to a global marketplace).
The AICPA Tax Division has a nice tax reform resources website that includes comment letters and testimony from the AICPA and short update videos. I’ve got one there dated February 27 on what to tell your clients about tax reform. I hope you’ll check it out and that it helps give you some ideas of information to share with your clients to help them understand tax reform and the possible effects on them.
AB 252, a proposal in the California legislature “would prohibit the imposition by a city, city and county, or county, including a chartered city, city and county, or county, of a tax on video streaming services, including, but not limited to, any tax on the sale or use of video streaming services or any utility user tax on video streaming services.