Tuesday, September 1, 2015
WHAT’S THE BUZZ, TELL ME WHAT’S A HAPPENNIN’ – TUESDAY EDITION
I am off to the National Association of Tax Professional’s Tax Forum and Expo in Philadelphia.
The Forum is being held at the Marriott, but I am saving $20+ per night by staying across the street at the Loews (a hotel of equal quality). Moral of the story – the conference or group rate is not always the best rate (even at the same hotel – another registrant found that the AAA rate at the Marriott was cheaper than the group rate). Check out other options – do not automatically book at the conference hotel using the conference rate.
I will post anything of value discussed at the Forum education sessions here at TWTP.
* The Tax Foundation’s TAX POLICY BLOG tells us “Here’s How Much Taxes on the Rich Rose in 2013”
“For American taxpayers making under $500,000, income tax rates stayed almost exactly the same between 2012 and 2013. For instance, in both 2012 and 2013, the typical household making between $50,000 and $100,000 paid 8.7 percent of its total earnings in income taxes.
But for households making over $500,000, taxes rose dramatically in 2013. Americans making between $1 million and $2 million saw their effective income tax rates rise from 24.2 percent to 28.6 percent between 2013 and 2014; on average, these taxpayers paid $53,050 more in taxes.
For the highest-income taxpayers, rates spiked by even greater amounts. Taxpayers with over $10 million of income saw their average rates rise from 19.8 percent to 26.1 percent, equivalent to an average tax hike of $1.52 million.”
The Foundation suggests two reasons why the increase in tax on the wealthy – both of which boil down to the front and back door increases in the tax rates of those considered to be wealthy.
“The fiscal cliff tax deal created a new 39.6 percent income tax bracket, raised the top rate on capital gains to 20 percent, and imposed a limitation on itemized deductions for high income Americans.”
In other words – the Tax Code further punished Americans for entrepreneurship, ambition, and investment.
* Jason Dinesen makes a good point in “Due Date of Iowa Partnership and Corporate Tax Returns Unchanged” at DINESEN TAX TIMES.
While the federal deadline for filing certain business tax returns has been changed (for the better), this does not automatically mean that the state filing deadlines for these forms has also changed.
As Jason points out –
“The due dates for partnership and corporate federal tax returns is changing starting with 2016 filings (so for tax season 2017), but the due dates for the corresponding Iowa tax returns will not change.”
Federal and state filing deadlines are not always the same.
* TAX BUZZ tells us “IRS Ramps Up Action on Classification of Employees as ‘Independent Contractor’ or Employee” –
“According to the IRS, an estimated 80% of workers are classified as ‘independent contractors’ when they are in fact employees. While I am sure many accountants, lawyers and small business owners would argue with this estimate, the IRS and Department of Labor are building up their enforcement by adding new auditors focused specifically on targeting these misclassifications.”
The item includes the “20-factor control test the IRS uses when questioning a job classification”.
While IRS audits in general have, and will continue to, drop due to budget cuts, it appears that job classification audits will be on the increase. It is important to be sure you are properly classifying workers in your business.
* There has been much talk in the tax “blogoshphere” lately about “Cadillac Tax” – a component of Obamacare that charges a 40% excise tax on high cost employer-sponsored health coverage. At FORBES.COM Robert Book takes on the daunting task of “Decrypting The ‘Cadillac Tax' (Part 1)”.
Robert’s bottom line is “This is quite odd”.
Like much of Obamacare (aka The Affordable Care Act), as it was hastily and poorly written, this does not make sense. Luckily the “Cadillac Tax” does not take effect until 2018, and I expect it will probably be done away with before then.
* Actually, Kay Bell tells us “Cadillac Tax Repeal on Senate's Post-Recess To-Do List” at DON’T MESS WITH TAXES.
Kay tells us – “Everyone hates the tax”.
THE LAST WORD –
BUSINESS INSIDER tells us “Voters Described Presidential Candidates with One Word — and the Results were Brutal”.
A recent Quinnipiac poll asked respondents to name "the first word that comes to mind" with three of the leading 2016 presidential candidates – Clinton, Bush, and Trump.
What did those polled have to say about tonsorially-challenged idiot Tronald Dump?
“But Trump, the real-estate mogul who was the third candidate tested by Quinnipiac, drew by far the most colorful expressions. The most used word, ‘arrogant’, was deployed just 58 times, followed by "’blowhard’ (38), ‘idiot’ (35), ‘businessman’ (34), and ‘clown’ (34).
Further down on the list were insults including ‘crazy’ (26), ‘a—hole’ (18), ‘joke’ (16), and ‘egomaniac’ (13), among others.”
All good words to describe the fool – except “businessman” is being kind (although it does not tell what kind of businessman). I think “egomaniac” is the best description.