Friday, August 30, 2013
WHAT’S THE BUZZ, TELL ME WHAT’S A HAPPENNIN’
“Real [tax] simplification has eluded us because we have failed to address head-on the public’s addiction to tax incentives as a means of providing social services and funding government programs. Unless we deal with that problem, real simplification is impossible.” – Thomas F. Field (founder of Tax Analysts)
Right on, brother Thomas!
Have made progress on the GD extensions – and still had time to wander the web.
* Check out my items “The Big O” (it is not what you think!) and “When to Contact Your Tax Pro” at MAINSTREET.COM.
* The series of interviews at MASTERS OF ACCOUNTING that began with me continues with an “Interview with Russell Fox, Principal of the Clayton Financial and Tax Firm”.
* The TAX FOUNDATION was the first to issue a detailed analysis of the Department of Treasury announcement regarding the tax treatment of same-sex marriages - “IRS Issues ‘State of Celebration’ Guidance for Same -Sex Couples - Further Guidance by 24 States May Be Required”.
* Jason Dinesen asks, and answers, the question “Would I Recommend the Tax Prep Industry to a Young Person? Probably Not” at DINESEN TAX TIMES.
Over the past few years I have occasionally thought about this issue from a slightly different perspective – if I were just starting out today would I still choose tax preparation as my profession? Especially in light such developments as the IRS attempt to regulate all tax preparers, the continuing complexity and changing of the Code, and the excessive due diligence requirements of the Earned Income Credit.
My answer would probably be yes – and still partly because of the seasonal nature of the job. I still enjoy preparing 1040s – the thrill is not yet gone.
In my THE TAX PROFESSIONAL post “Ramblings on Tax Practice” I take a different position than Jason. I talk about limiting a practice to 1040 preparation, which I now do, instead of recommending “diversify and offer other accounting services”.
I am not as concerned as Jason is about DIY tax preparation software and tax simplification taking away business. As I have said for years, I do not believe that the creation of a much simpler 1040 would affect my practice, and I do not know of any client who has ever left me to “self-prepare” his/her tax returns using a box.
* Trish McIntire warns us that “6 Weeks Is Not That Much Time”. She is, of course, reminding us of the October 15th deadline for filing extended tax returns.
My recent bout with “manana disease” is a clear indication that Trish speaks the truth.
* And William Perez reminds us that “2012 Corporate Returns Due September 16”. As are extended 1041s and 1065s.
* And ACCOUNTINGWEB echoes an “IRS Reminder: Highway Use Tax Return Due September 3”.
I think that about covers all the upcoming deadlines.
* There is progress. The 47% will be 43% for 2013, or so says Roberton Williams of THE TAX POLICY CENTER in “And Now for the Movie: Fewer Americans Pay No Federal Income Tax” –
“The percentage of Americans who pay no federal income tax is falling, thanks to an improving economy and the expiration of temporary Great Recession-era tax cuts. In 2009, the Tax Policy Center estimated that 47 percent of households paid no federal income tax. This year, just 43 percent will avoid the tax.”
Roberton points out (highlight is mine)-
“Of the 43 percent of households that will owe no federal income tax this year, nearly half will be off the rolls because their incomes are too low. The rest won’t pay because preferences wipe out the taxes they would otherwise owe. Many of those preferences, such as the Earned Income Tax Credit and the Child Tax Credit, are social policy run through the tax code. If those provisions were considered spending rather than tax cuts, many more people would be counted among income tax payers.”
I must continue to say that I do not accept the statement that most of the now 43% actually pay federal taxes because they pay FICA payroll taxes. FICA tax is not really a tax. The Social Security component is a contribution to a pension plan, and the Medicare part is an advance health insurance premium.