Archive for Tax Policy

Inflation Adjustments In The Tax Law

Our federal tax system includes numerous dollar amounts, such as for the standard deduction amount, personal exemption amount, credits, where different tax rates start and end, and defining the parameters of a “small taxpayer.” Some of these amounts are adjusted for inflation and others are not. Should they all be? That’s a good question.

I think where the tax rates of the graduated rate system start and end should be adjusted annually for inflation. This prevents “bracket creep” where a taxpayer is pushed into a higher tax bracket just because their income increased by the rate of inflation (yet their buying power and sense of wealth remained the same). The same logic calls for adjusting the standard deduction and personal exemption amounts. Read More

Written by | Posted in State And Local Tax (SALT) • Tax Policy

2015 Budget Announced Today In Ireland

Here is a brief Summary of some of the Taxation Measures for introduction in Ireland in 2015.

Income Tax

There will be an increase in the standard rate band of income tax by €1,000 from €32,800 to €33,800 for single individuals and from €41,800 to €42,800 for married one earner couples.

There will also be a reduction in the higher rate of income tax from 41% to 40%.

Artists’ Exemption

The threshold for the artists’ exemption will be increased by €10,000 to €50,000. Read More

Written by | Posted in Capital Gains • Income Tax • Tax Deductions • Tax Policy • Tax Tips

Compliance 2014 – Capital Gains Tax – Ireland

If you’ve already made or about to make a disposal of a capital asset (e.g. certain shares, an investment property, a business, etc.) anytime between 1st January and 30th November 2014 you will be obliged to pay your Capital Gains Tax by 15th December 2014.

If you decide to wait and dispose of your asset between 1st December and 31st December 2014 then your payment will be due by 31st January 2015.

What happens if you miss these deadlines?

Interest of 0.0219% per day will be applied to all late payments of Capital Gains Tax.

What happens if you make a gain in the first part of the year and a loss in the second part?

Read More

Written by | Posted in Capital Gains • Europe, Middle East • Tax Policy

Washington DC Broadens Sales Tax Base For Good Tax Policy

In May, Washington DC’s Tax Revision Commission released its final report after hearing from experts and studying Washington DC’s tax issues. In July, changes from the report were enacted!

That is amazing. Typically, reports of tax commissions sit on shelves.

Included in sales tax reform was base broadening to include some services mostly used by consumers and ones people won’t obtain via e-commerce or by traveling out of state (although hair salons were not included in the final legislation, but in the commission recommendations). Instead of lowering the sales tax rate, they kept it where it is (1/4 point lower than Virginia and Maryland) and lowered individual income taxes.

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Written by | Posted in Sales/Use Tax • Tax Policy

Australian Tax Office BEPS “Progress Report”

In a speech last week ATO’s Mark Konza, Deputy Commissioner – International, gave an insight into the ATO’s activities in responding to a number of the OECD’s post Cairns G20 Minister’s Conference BEPS Action Plan items.

Deputy Commissioner Konza put particular emphasis on the ATO’s strategy in connection with “Action Item 1: address the tax challenges of the digital economy”. Commenting on the ATO’s work on this aspect he said-

“The broader digital economy is also being addressed through our four-year dedicated compliance program to address International Structuring and Profit Shifting (ISAPS). Tax and law professionals from external firms have been recruited into the ATO to help Read More

Written by | Posted in Australia/Oceania • Income Tax • International • OECD • Tax Controversy • Tax Policy • Tax Risk Management • Transfer Pricing

Closing A Business In California?

Following The Rules of The IRS And California Tax Agencies

When it’s time to close a business in California, there are many important steps that must be followed to ensure the requirements of the IRS and the California tax agencies are met. Failing to do so can result in the tax agencies coming back years later to collect tax on income you may not have earned, or tax on workers you no longer employed. Different rules apply depending on the type of entity and whether there are shareholders, assets to distribute and employee benefit or retirement plans in place. In addition to filing final income tax returns, business owners should also be sure to file other applicable final tax returns including sales and use tax returns and employment tax returns. The IRS, California Franchise Tax Board, Board of Equalization and Employment Development Read More

Written by | Posted in IRS • Tax Policy

Bitcoins Are Not “Currency” – Australian Tax Office

The Australian Taxation Office (ATO) has just issued a guidance paper stating: “The ATO’s view is that Bitcoin is neither money nor a foreign currency, and the supply of bitcoin is not a financial supply for goods and services tax (GST) purposes.”

Furthermore, the ATO says: “Bitcoin is, however, an asset for capital gains tax (CGT) purposes.”

For businesses that use Bitcoins (or any other crypto-currencies) to buy and sell trading stock, the transactions will be treated for tax purposes as a bartering arrangement. Buying trading stock with Bitcoins will require businesses to charge the 10% GST on the coins. Selling trading stock for Bitcoins will mean the business can claim an input tax credit for Read More

Written by | Posted in Australia/Oceania • Capital Gains • Income Tax • Indirect Tax • Individual • International • Tax Policy • VAT

Could Tax Reform Lead To A More Complex System?

Congressman Camp’s discussion draft of the Tax Reform Act of 2014, released in February 2014 aims to broaden the income tax base and lower tax rates. Broadening the tax base means that some special deductions and credits could be eliminated. It also means that some deductions could be stretched out over longer periods. In the long run, that doesn’t raise revenue as it is just timing. But when you only measure the effects out 10 years, it raises revenue.

One stretched out deduction would be advertising expenses of large companies. Under Camp’s proposal, 50% would be deducted in the year incurred and the balance would be deducted over ten years. That might sound simple, but you need to dig deeper. This proposal will require a definition of advertising. Camp’s is fairly complex. Also, the small Read More

Written by | Posted in Tax Policy

Take It Off!

I had put it on some time ago. I kept it on everywhere I had a presence. I was submissive and had a desire to be obedient. The ramifications of not doing as the master said weren’t nearly as pleasurable as complying with my master’s commands.

Having become a creature of habit, and not wanting to displease my master, I had put it on everywhere. Having quite the presence online, I had it on in lots of places. You could see on me in my blog posts, my web page, my social media posts. Everywhere I was, I had it on.

Now, after months of making sure I’d covered my a**, I’m told to TAKE IT OFF!

Yep. In a webinar presented by the Office of Professional Responsibility, Karen Hawkins Read More

Written by | Posted in IRS • Tax Policy

LIFO Repeal – Tax Savings For The Small Business?

LIFO REPEAL – TAX SAVINGS FOR THE SMALL BUSINESS?

The Tax reform Act, 2014 calls for a repeal of the Last in First Out (LIFO) method of inventory valuation. Despite the promise of reduced tax rates associated with LIFO repeal and other proposed changes, there has been strong opposition to the proposed repeal particularly from a group of over 120 companies coming together to form the LIFO Coalition in 2006. (LIFO Coalition, 2014)

The group contends that getting rid of LIFO would cause severe economic hardship to businesses and lead to loss of jobs. (Whitehouse, 2009).

WHAT IS LIFO?

Read More

Written by | Posted in Corporate • Federal • Income Tax • IRS • Small Business • Tax Policy

A Special Report From Capitol Hill

Before Congress adjourned for its July 4th recess, a number of House and Senate committees and subcommittees deliberated over legislation to address the Highway Trust Fund (HTF), Corporate Tax Inversions, and Tax Extenders amongst other matters including, but not limited to, the subsequent highlights:

• The Senate Finance Committee Chairman Ron Wyden, D-Ore., on June 24 unveiled a measure, the Preserving America’s Transit and Highways (PATH) Bill, to raise $9 billion to temporarily bolster the HTF with modifications to heavy vehicle use taxes, distribution from inherited IRAs and a handful of other modest tax changes. However, two days later, a modified Chairman’s Mark for the PATH Bill fell short of the revenue needed. Wyden said the markup would resume during the week beginning July 7 when Congress returns from Read More

Written by | Posted in Tax Policy • Treasury Regulations

A Brief Introspection of Repair vs. Improvement: IRS Revenue Procedures 2014-16 and 2014-17

That’s right Y’all this is another one of those quite game changers for owners of tangible property concerned about keeping the IRS at bay by actually adhering to the specific US Tax Code and subsequent IRS Revenue Procedures.

My apologies for being so brazen but I more than most appreciate the fact the the IRS compliance and enforcement functions demonstrated segregated profiling beyond reproach in these regards and that in deference to flaccid attempts at enforcement historically to date a ‘hide your head in the sand’ approach stood more than a coin toss chance of being successful as up until recently the IRS has been a day late and a dollar short assessing tax within the time frame allowed by statute. Read More

Written by | Posted in IRS • Tax Policy
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