THE WANDERING TAX PRO
Up-to-the-minute advice, information, resources, and, on occasion, commentary on federal and New Jersey state income taxes, and the various New Jersey property tax rebate programs, and insights and observations on tax policy and professional tax practice, by 45+-year veteran tax professional Robert D Flach.
Monday, December 5, 2016
WHAT’S THE BUZZ, TELL ME WHAT’S A HAPPENNIN’
to stop saying “How stupid can you be?”
think people are starting to take it as a challenge!
A truly meaty BUZZ this week!
FYI, as you are reading this I am attending
another year-end tax update workshop – this one given by the National Society
of Tax Professionals.
I have complained for the past several
years about tax pros being forced to become Social Workers.Now, as Russ points out, we are being forced
to become cops as well.
Thankfully, since I do not use flawed and
expensive tax preparation software, and therefore cannot submit federal returns
electronically, I will not be forced to become a cop.But most tax preparers will most certainly
need to waste more precious time this coming tax season, when there is really
no time to spare.
* TaxGirl Kelly Phillips Erb has brought
back “Fix the Tax Code Friday” at FORBES.COM.Her first tax issue (sorry was “Corporate Tax Incentives”, and her
question was -
state or federal authorities provide targeted tax incentives to encourage (or
discourage) certain corporate behaviors? If so, what sorts of behaviors?”
My initial response is that only things
that tax incentives should encourage is general economic growth and the hiring
of certain groups of individuals – veterans, the disabled, etc.
I oppose industry and individual company
specific tax incentives, benefits, deductions, credits, and loopholes, such as
the Carrier deal. This deal
was ridiculous – millions of dollars in incentives (i.e. lost government
revenue) to save about 1000 jobs.
Bernie Sanders was correct in saying that stupid
deals like this will only lead to corporate extortion – “every corporation in America that they can threaten to offshore jobs in
exchange for business-friendly tax benefits and incentives.”
As Kelly suggests it is doubtful there will
be an “extender” tax bill year this year.
In my opinion, many of these items should not be extended, including -
insurance deduction – this should have never been allowed as a deduction in the
for home debt forgiveness - taxpayers should not be rewarded for acting
energy efficiency credits – with a $500 lifetime maximum most taxpayers have
already used up this credit.Besides, it
should never have been in the Tax Code to begin with – but provided as a “point
of purchase” discount similar to the “Cash for Clunkers” program of a few years
of course, some industry-specific tax benefits.
With the very high
possibility of hopefully substantive tax reform legislation early in 2017, now
is not the time to pass any extender legislation that would only be void by the
subsequent tax reform bill.
FYI – these items are still available for 2016
tax returns.Thankfully, for a
change, no year-end extender legislation is required for 2016 items.
The Professor quotes a post from THE SURLEY SUBGROUP by David J. Herzig (highlights are mine) -
a businessperson who runs many active businesses runs and wins for President,
clearly there would be many second order problems associated with inherent
conflicts between running corporations and the country.When President-elect Trump won the office,
many of these conflicts have bubbled to the surface.
example, to avoid a conflict of interest between benefiting one’s personal
holdings and the Country’s best interests, assets of the President are placed
in a blind trust.As many have pointed
out, this works only when the President does not know the nature of the
holdings.Putting existing businesses into a blind trust does not stop the
President for knowing the underlying assets of the trust.The conflict is not ameliorated by trust structure.Nor, by the way, would it be fixed if
President elect Trump divests but the family continues to own the assets.”
Trump must truly sell off all his business
holdings, so that he does not benefit in any way from profits earned during his
hopefully short tenure, and place the proceeds in a blind trust.Turning
the businesses over to his kids is NOT AN ACCEPTABLE OPTION!
* Speaking of Tronald Dump, I discuss the
truth about the Dumpster’s mental condition in the latest “issue” of THE LIBERTY TIMES.
and separation are challenging enough, but when there are children involved the
process can become even more difficult. One of the issues that few people
anticipate when contemplating a divorce is the management of tax credits and
write-offs having to do with dependency and other child-related benefits. These
rules surrounding these issues are highly complicated, and making decisions as
to what the right way to distribute tax benefits is made all the more stressful
if the parents are not able to discuss the subject calmly.”
Regardless of how good a divorce attorney
may be, I cannot stress strongly enough the fact that it is vitally important that taxpayers in the process of divorce
involve a tax professional in the development of any settlement agreement.Most divorce attorneys are truly clueless
when it comes to the tax consequences of a divorce - and the wrong language in
a divorce agreement can prove costly.
This post not only provides the correct
answer, but also points out, in the question posed by his client, the serious misconceptions that, in my
opinion, most small business owners have
about tax issues (not the least of which is that a CPA is automatically a
* The Checkpoint Newsstand weekday daily
e-letter from Thompson-Reuter recently reported “17 states have announced that they will increase the amount of wages
that are subject to unemployment tax (taxable wage base; TWB) in the 2017 tax
year.”The taxable wage base also
applies to the disability and family leave insurance contributions, or “taxes”,
in some states, like NJ.
Here, from the item, are the wage base
increases by state -
A spokesperson for the Alaska Department of Labor and Workforce Development has
told Thomson Reuters Checkpoint that the TWB will increase from $39,700 to
$39,800 in 2017.
A spokesperson for the Colorado Department of Labor and Employment has told
Thomson Reuters Checkpoint that the TWB will increase from $12,200 to $12,500
The TWB will increase from $28,300 to $29,300 in 2017.
The TWB will increase from $31,000 to $32,000 in 2017.
A spokesperson for the Montana Department of Labor and Industry has told
Thomson Reuters Checkpoint that the TWB will increase from $30,500 to $31,400
The TWB will increase from $28,200 to $29,500 in 2017.
Jersey. The TWB will increase from $32,600 to $33,500 in 2017.
Mexico. The TWB will increase from $24,100 to $24,300 in 2017.
York. The TWB will increase from $10,700 to $10,900 in 2017.
Carolina. The TWB will increase from $22,300 to $23,100 in 201.
A spokesperson for the Oklahoma Employment Security Commission has told Thomson
Reuters Checkpoint that the TWB will increase from $17,500 to $17,700 in 2017.
The TWB will increase from $36,900 to $38,400 in 2017.
The TWB will increase from $9,500 to $9,750 in 2017.
Island. The TWB will increase from $22,000 to $22,400 (from $23,500 to $23,900
for employers in the highest unemployment tax rate class) in 2017.
A spokesperson for the Utah Department of Workforce Services has told Thomson
Reuters Checkpoint that the TWB will increase from $32,200 to $33,100 in 2017.
A spokesperson for the Vermont Department of Labor has told RIA that the TWB
will increase from $16,800 to $17,300 in calendar year 2017.
The TWB will increase from $44,000 to $45,000 in 2017.”
new and secure tool, available on IRS.gov allows taxpayers to view their IRS
account balance, which will include the amount they owe for tax, penalties and
We are told “the IRS anticipates that other capabilities will continue to be added
to this platform as they are developed and tested.”
In order to access this tool you need “a text-enabled mobile phone” – so I will
not be able to take advantage of it.
* An announcement from NJ on the reduced
sales tax rate (click here) –
must collect and remit the tax at the rate of 6.875% on all taxable sales of
tangible personal property, specified digital products, and enumerated services
that occur on and after January 1, 2017. This rate will remain in effect until
December 31, 2017.”
The announcement has a link to a new sales
tax chart for 2017.
NJ tax pros – the NJ NATP 2017 Famous State Tax Seminar registration flyer
is now available.Click here to
This is a “must-attend” for all tax pros
who prepare any kind of NJ tax return – individual or corporate income, payroll,
sales tax, estate and inheritance tax.The presenters from the NJDOT are all excellent.
It also has a NY state tax update by
another excellent presenter that actually
applies to 2016 NY state returns to be prepared during the upcoming filing
season – unlike the waste of time webinar session that NY return preparers
are forced to sit through that is always a year behind.
Hope to see you there!
* Not a tax item, but let me end with some
timely financial advice from Sterling Raskie at GETTING YOUR FINANCIAL DUCKS IN
A ROW – “How to Save On Holiday Spending”.
THE LAST WORD –
Donald Trump is a despicable human being.
He was a despicable human being before he
decided to run for President.He was a
despicable human being during the campaign.Not that he is the President-elect nothing has changed – he is still a
despicable human being.
Donald Trump is unfit to be President.
The fact that Trump will be our next
President is an embarrassment to America, and proof that the “dumbing down” of
America is truly a reality.
Those who voted against Trump should be
proud of their opposition to him.Those
who voted for Trump should be ashamed and criticized for their irresponsible
and irrational action.