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Archive for Annette Nellen

Tax Reform Framework: A Summary & Observations

Annette Nellen, Tax Advisor

On September 27, 2017, the Big 6 released their Tax Reform framework to guide the drafting of Tax Reform Legislation. Here is my summary and observations.

The plan also states President Trump’s Four Principles of Tax Reform:

  1. Simple, fair, easy to understand
  2. Give American works a pay raise.
  3. Make America a jobs market of the world
  4. Bring back trillions of dollars of unrepatriated earnings

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You are Invited! View TEI-SJSU’s High Tech Tax Institute Conference Agenda

Annette Nellen, Tax Advisor

The SJSU MST Program manages and co-sponsors three annual tax conferences. Our hallmark High Tech Tax Institute, started in 1988, is a two-day conference held each November. Speakers and attendees come from around the world. Leading edge topics relevant to high tech companies and their tax professionals are addressed by nationally and internationally recognized practitioners and government representatives who have practical experience of implementation. The learning and networking opportunities makes the annual TEI-SJSU High Tech Tax Institute an invaluable educational tax experience for accountants, attorneys, and corporate representatives who serve high technology businesses.

33rd Annual TEI-SJSU High Tech Tax Institute – November 13 & 14, 2017

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Tax Reform Framework Observations

On September 27, the “Big 6″* released their tax reform framework. It doesn’t add much more than we have known for the past 16 months other than:

  • Top corporate rate is 20% rather than President Trump’s 15%. The 20% rate should help us be more competitive internationally, particularly along with a shift from a worldwide system to a territorial one (15% would be better, other than for the budget effect).
  • The individual brackets will be 12%, 25% and 35% and perhaps something higher than 35%. In April, President Trump suggested 10%, 25% and 35% while last June the House Republicans suggested 12%, 25% and 33%. Today’s lowest bracket (other than zero) is 10%. Seems odd to try to sell tax cuts with a higher lowest rate, but the effect also depends on where the brackets start and end and a few other provisions.

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Who Should Get A Rate Cut In Tax Reform?

Annette Nellen

For the past few years, the focus of federal tax reform has been on reducing the corporate statutory rate from 35% down to 25% (H.R. 1 (113rd Congress, Camp)), 20% (House Republican blueprint of June 2016) or 15% (Trump 1-pager). The rationale for a corporate rate cut is that ever since we last reduced the top corporate rate from 46% to 34% with the Tax Reform Act of 1986, other industrialized countries did the same (in 1993 the rate was increased to 35%). You can see from this OECD data that most countries have a lower rate, although France is at 34.43%. Read more

TEI-SJSU High Tech Tax Institute – November 13 & 14, 2017

Annette Nellen, Tax Conference, SJSU, High Tech Tax Institute,

The SJSU MST Program manages and co-sponsors three annual tax conferences. Our hallmark High Tech Tax Institute, started in 1988, is a two-day conference held each November. Speakers and attendees come from around the world. Leading edge topics relevant to high tech companies and their tax professionals are addressed by nationally and internationally recognized practitioners and government representatives who have practical experience of implementation. The learning and networking opportunities makes the annual TEI-SJSU High Tech Tax Institute an invaluable educational tax experience for accountants, attorneys, and corporate representatives who serve high technology businesses.

33rd Annual TEI-SJSU High Tech Tax Institute – November 13 & 14, 2017

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Dueling Health Plans In Senate

The drama on what, if anything, to do with the Affordable Care Act (ACA) aka Obamacare continues. There are two very different new proposal in the Senate. The GCHJ proposal might be voted on the week of September 25. We’ll see what happens.  I have a description of both the Republican GCHJ proposal and Senator Sanders’ S. 1804, Medicare for all Health Insurance bill below.

Graham-Cassidy-Heller-Johnson (GCHJ) Proposal, introduced on 9/13/17 as an amendment to H.R. 1628, would repeal the ACA and instead offer block grants (run through CHIP) to states. Sponsors claim the proposal treats everyone the same regardless of where they live. Read more

Another Large Payment Owed For Incorrect PTC

Another case (see below)* addresses a couple receiving an advance Premium Tax Credit (PTC) of a large amount and having to pay it all back. They also note that if they had known they would have to pay it back, they would not have taken the insurance. The cost of the insurance for this California couple was 20%  of pre-tax household income. That’s a lot!

For context, if this couple lives in San Jose, rent for a one-bedroom apartment starts at $2,000/month or 33% of the couple’s pre-tax income! Read more

TEI-SJSU High Tech Tax Institute – November 13 & 14, 2017

Annette Nellen

The SJSU MST Program manages and co-sponsors three annual tax conferences. Our hallmark High Tech Tax Institute, started in 1988, is a two-day conference held each November. Speakers and attendees come from around the world. Leading edge topics relevant to high tech companies and their tax professionals are addressed by nationally and internationally recognized practitioners and government representatives who have practical experience of implementation. The learning and networking opportunities makes the annual TEI-SJSU High Tech Tax Institute an invaluable educational tax experience for accountants, attorneys, and corporate representatives who serve high technology businesses.

33rd Annual TEI-SJSU High Tech Tax Institute – November 13 & 14, 2017

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Federal Tax Reform And Intangibles

Annette Nellen

Federal tax reform discussions have included writing off all business assets (other than land) at acquisition. In contrast, some have suggested increasing the Section 179 expensing amount which covers tangible assets. Some reform proposals have suggested lengthening depreciable lives for tangibles and intangibles. Proposals are obviously quite varied. I think that is primarily due to two factors: (1) no agreed upon goal for tax reform, and (2) focus on hitting a certain revenue target to allow for lower rates in a revenue neutral manner. Read more

Shopping Trends And Taxes

I like to look at trends because they are interesting and many have tax implications. Trends may indicate a need to update or modernize tax rules or systems. I’m a bit behind on blogging on this, but several weeks ago, there was an article in Fortune – Phil Wahba, “Major Wall Street Firm Expects 25% of U.S. Malls to Close by 2022,” 5/31/17. Reasons included bankruptcies and continuing growth in retail e-commerce sales. Read more

TEI-SJSU High Tech Tax Institute – November 13 & 14, 2017

The SJSU MST Program manages and co-sponsors three annual tax conferences. Our hallmark High Tech Tax Institute, started in 1988, is a two-day conference held each November. Speakers and attendees come from around the world. Leading edge topics relevant to high tech companies and their tax professionals are addressed by nationally and internationally recognized practitioners and government representatives who have practical experience of implementation. The learning and networking opportunities makes the annual TEI-SJSU High Tech Tax Institute an invaluable educational tax experience for accountants, attorneys, and corporate representatives who serve high technology businesses.

33rd Annual TEI-SJSU High Tech Tax Institute – November 13 & 14, 2017

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Senate Democrats Tax Reform Principles

On 8/1/17, almost all Senate Democrats plus the two independent senators issued a letter to President Trump, Majority Leader McConnell and Senate Finance Committee Chairman Hatch, on their “key principles for tax reform.” The 45 signers indicate they want to work on bipartisan tax reform. The three key principles they “believe are prerequisites to any bipartisan tax reform effort” are: Read more

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