Monday, May 16, 2016
WHAT’S THE BUZZ, TELL ME WHAT’S A HAPPENNIN’
Today’s BUZZ installment is “so meaty”! I couldn’t wait until Wednesday to post it.
* Greg Freyman talks about “Cleaning Up the Mess Left by DIY Tax Software” at ACCOUNTING TODAY –
“With every passing year, our offices receive an ever-increasing number of calls asking for help fixing previously self-filed returns.”
Greg correctly explains –
“Another significant issue with do-it-yourself software is the consumer’s reliance on it to do the impossible and apply the voluminous amount of tax law to their individual scenario. Without a firm grasp of the ever-changing tax law, individuals are relying heavily on the automated prompts within the system to help guide them, further creating the illusion that preparing and filing income tax returns is simple in all cases.
Granted, a tax return may be simple, and the software utilized may be sufficient, in some cases. However, even in straightforward scenarios, costly mistakes can and do happen.”
Taxes ain’t simple! Albert Einstein said “The hardest thing in the world to understand is the income tax.”
I have said over and over again for years now – No tax preparation software is a substitute for knowledge of the Tax Code, and no tax preparation software package (or tax filing “app”, or online filing service) is a substitute for a competent, experienced tax professional!
* Over at the TAX ANALYSTS BLOG David Brunori joins me in opposing doing away with the admittedly flawed IRS and identifying the real problem with our current tax system in “Abolish the IRS? Stop It” – (highlight is mine)
“The irony of the argument for abolishing the IRS is that the tax laws (including the administrative rulemaking) are the products of Congress. The true problem is the complicated, often onerous, tax laws that Congress created.”
* Dangerous buffoon “Trump says he won't release his taxes before election”. So reports Kay Bell at DON’T MESS WITH TAXES. Kay hits the nail on the head in telling us why he is refusing to provide the public with his personal financial information (highlight is mine) -
“I'm among the ‘really, Donald?’ group. I suspect that the way he structures his tax filings reduce his income to a level that greatly contradicts his bombastic personal wealth assertions.
His ego won't let him reveal actual numbers that don't add up to his boasting, at least not in the easily Twitterable way he loves to communicate.”
While Trump’s truly surprising popularity is partly based on the fact that he is not a “traditional” politician, he certainly shares one trait associated with most traditional politicians – he lies like a rug! I do not believe he has made a single completely true statement since the campaign began.
It is vitally important for the future of America that we “Just Say No To Donald Trump” in November!
* Who says the “wealthy” don’t pay their fair share of taxes? It ain’t necessarily so – as FORBES.COM’s TaxGirl Kelly Phillips Erb points out in “Americans Who Make More Than $100,000 Pay 80% Of Federal Income Taxes” – (highlight is mine)
“Here’s the dirty little secret that we don’t like to talk about: when it comes to income tax, top earners really do pay more in federal income taxes. According to recent Internal Revenue Service (IRS) data, Americans earning over $100,000 paid 79.5% of federal income taxes in 2014.”
* At GETTING YOUR FINANCIAL DUCKS IN A ROW Sterling Raskie gives us “Information on 457(b) Plans” –
“The 457(b) plan, sometimes known as a deferred compensation plan is a retirement plan that is generally set up by states, municipalities, colleges and universities for their employees. These plans have some similarities to their 401(k) and 403(b) counterparts, but they also have some differences that individuals with access to these plans may find advantageous.”
* THE TAX FOUNDATION issued an interesting examination of “Marijuana Legalization and Taxes: Federal Revenue Impact”.
It is certainly something to think about.
* This one surprised even me. Be sure to read Janet Novack’s FORBES.COM post “How A Disabled Worker Got $0 Social Security, But Owed Taxes On $30,519 In Benefits”.
Janet clearly identifies the villain in this amazing but true story. The IRS and the Social Security Administration don’t write the tax laws – the incompetent idiots in Congress do.
* FORBES.COM has a great “stable” of bloggers. Included on the list is Tony Nitti, who provides a detailed primer on “Reasonable Compensation For C Corporation Shareholder-Employees: How Much Is Too Much?”, an important issue for closely-held corporations.
* Laura Saunders answers the timely question “Is Your Political Donation Tax-Deductible?” at the WALL STREET JOURNAL.
The answer –
“When writing a check to support a candidate or cause this election season, know this: that political donation often isn’t tax deductible.”
Basically donations to candidates, parties and PACs (Political Action Committee) are not deductible – although a limited deduction and credit had been available to taxpayers years ago.
FYI (from “Toward a Small Donor Democracy: The Past and Future of Incentives for Small Political Contributions” by US PIRG Education Fund) -
“From 1972 to 1974, taxpayers could choose to claim a 50% tax credit for donations to federal, state, and local candidates and party organizations up to a limit of $12.50 (or $25 for a married couple filing jointly), or they could choose to take a 100% deduction off their adjusted gross income for their first $50 of federal, state, or local contributions (or $100 for married couples filing jointly). For the tax year 1975, both of these tax incentives were doubled, creating a 50% tax credit of up to $25 for individuals and $50 for joint returns, and a 100% tax deduction of up to $100 for individuals and up to $200 for joint returns. A few years later, Congress doubled the tax credit again while repealing the tax deduction.
In 1986, Congress reversed course and repealed the political contribution tax credit as part of a sweeping simplification of the tax code that eliminated a large number of tax credits and deduction.”
THE FINAL WORD
Let America know you will not stand for hate, bigotry, or anger.
Click here to share your opposition to dangerous buffoon Tronald Dump.
BTW – click here for an interesting look at the dangerous buffoon’s character.