Monday, December 5, 2016

WHAT’S THE BUZZ, TELL ME WHAT’S A HAPPENNIN’

I have to stop saying “How stupid can you be?”
I 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.

* Russ Fox shares my frustration with the ridiculous new rules for tax preparers in “Your Tax Professional, A Cop” at TAXABLE TALK.

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 -

Should 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.”

Read Bernie’s WASHINGTON POST editorial “Carrier just showed corporations how to beat Donald Trump”.  He correctly observes “In essence, United Technologies took Trump hostage and won”.

 

* And in a post I missed in last week’s BUZZ Kelly tells us “Forget The Turkey: Lame Duck Congress Could Let A Number Of Tax Breaks Expire In 2016”.

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 -

·      Mortgage insurance deduction – this should have never been allowed as a deduction in the first place.

·      Exclusion for home debt forgiveness - taxpayers should not be rewarded for acting irresponsibly.

·      Residential 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 back.

·      And, 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.

* Haven’t made your 2016 IRA contribution yet?  Over at FOX NEWS Dan Caplinger lists “3 Roth IRA Facts Every Retiree Should Know”.

* TAX PROF Paul Caron discusses “Trump’s Emolument Tax Problem”.  It is truly an important issue in the context of the current horror in the US.

The Professor quotes a post from THE SURLEY SUBGROUP by David J. Herzig (highlights are mine) -

When 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.

For 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.

* Jorge Gomez gives us a primer onDivorce and Taxes: Who Claims the Kids on Your Tax Return?” at the nicely-named TAX BUZZ blog –

Divorce 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.

* Jason Dinesen explains “When Do I Have to Give Someone a 1099-MISC?” for business taxpayers at DINESEN TAX TIMES.

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 tax expert).

* 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 -

Alaska. 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.

Colorado. 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 in 2017.

Iowa. The TWB will increase from $28,300 to $29,300 in 2017.

Minnesota. The TWB will increase from $31,000 to $32,000 in 2017.

Montana. 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 in 2017.

Nevada. The TWB will increase from $28,200 to $29,500 in 2017.

New Jersey. The TWB will increase from $32,600 to $33,500 in 2017.

New Mexico. The TWB will increase from $24,100 to $24,300 in 2017.

New York. The TWB will increase from $10,700 to $10,900 in 2017.

North Carolina. The TWB will increase from $22,300 to $23,100 in 201.

Oklahoma. 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.

Oregon. The TWB will increase from $36,900 to $38,400 in 2017.

Pennsylvania. The TWB will increase from $9,500 to $9,750 in 2017.

Rhode 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.

Utah. 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.

Vermont. 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.

Washington. The TWB will increase from $44,000 to $45,000 in 2017.”


This 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 interest.”

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) –

Sellers 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.

* Attention NJ tax pros – the NJ NATP 2017 Famous State Tax Seminar registration flyer is now available.  Click here to download.

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.

TTFN

 
 It’s that time of the year again –
time for year-end tax planning!
 
Check out my 2016 YEAR-END TAX PLANNING GUIDE
 
Only $3.00 sent as pdf email attachment
or $4.00 in print form send via postal mail.
 
Click here for more information.
 

 
 
 
 
 
 
 
 
 
 

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