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Showing posts from October, 2016

Sugar Tax Helps Beverage Companies!

The Internet is filled with reports from a recent article in the Journal of American Public Health showing that a sugar tax cuts consumption of sugar sweetened soda. This plays right into the hands of Bradford manufacturers! You are probably thinking I am crazy, but once again government does the wrong thing.

Sweetened sodas and diet sodas are sold for the same price. Nevertheless, diet sodas are much cheaper to manufacture than sodas with high fructose corn syrup and sodas with cane sugar. Therefore the tax on sweetened soft drinks increases the number of people drinking a diet soda, which is more profitable to the beverage industry, then naturally sugar sweetened soda and drinks.

So, governments by misusing taxes to force people to change behavior, have in fact increase the profit of beverage manufacturers and increase diet drinks rather than healthier all-natural sugar sweetened drinks. Obviously, the intake of the sugar sweetened drinks should be limited, but every study that is e…

Is your LLC and S Corporation going to be Taxed at 25%?

Congress refuses to actually simplify the Internal Revenue Code. Since the 1986 tax Reform Act, Congress has passed more than 30,000 amendments to the Internal Revenue Code. Instead of simplification, Congress is now proposing a disguise tax increase for businesses.

Under our present federal corporate structure, if an individual owns a limited liability company or a sole proprietorship, the entity is not tax separately. Rather the income is added to the individual's own tax. That is also true for partnerships and limited partnerships. Congress wants to change this to add a 25% tax at the business level. This will mean that small businesses will now be facing the same double tax problem that large businesses have. In addition there will have to be a whole series of new forms and a complete rewrite of a portion of the Internal Revenue Code for this new scheme.

Instead of moving in the right direction, Congress is moving in the wrong direction!

Please see this interesting article dis…

Changes to the 1040

WHAT'S NEW ON THE 2016 DRAFT FORM 1040 AND RELATED FORMS AND SCHEDULES IRS has released on its website a number of draft tax forms and instructions for the 2016 tax year, including Form 1040 and its related schedules. This Practice Alert, which appears in two parts, highlights key changes made on the 2016 return. The first Part examined the draft Form 1040 itself. This Part II covers related draft forms and schedules.
FORM 1040—SCHEDULE A, ITEMIZED DEDUCTIONS Line 1. Medical and dental expenses. The 2016 standard mileage rate for medically-related use of an auto is 19¢ per mile. Line 21. Unreimbursed employee expenses. The 2016 standard mileage rate for business travel is 54¢ per mile. Line 29. Limit on itemized deductions. Itemized deductions for taxpayers with adjusted gross incomes in excess of the "applicable amount" ($311,300 for joint filers or a surviving spouse, $285,350 for a head of household, $259,400 for a single individual who isn't a surviving spouse, and …

Nanny Tax Threshold $2000 for 2017

You remember all the famous cases about politicians not reporting domestic employees for Social Security taxes? The unofficial term is the "nanny tax." The rule, as announced by the Social Security Administration, is quite simple. If you pay any individual domestic employee, such as a house cleaner gardener or babysitter less than $2000 per year, it does not have to be reported to the Social Security Administration and you do not have to collect and remit Social Security taxes. This is on a per employee basis. So, for example if you had one babysitter that you paid $1800 to during the course of the year and another one that you paid $1000, even though the combined total is $2800, more than $2000, you still do not have to report that. On the other hand if it were just one employee hired for $2800 you would have to report the entire $2800 and withhold Social Security and pay the employer's matching portion.

See the Social Security administration official announcement:

http…

Disaster victims in Florida qualify for tax relief

This is an article just announced on the Thompson Reuters Website:

Disaster victims in Florida qualify for tax relief IRS has announced on its website that victims of Hurricane Hermine in counties of Florida that are designated as federal disaster areas...

DISASTER VICTIMS IN FLORIDA QUALIFY FOR TAX RELIEF IRS has announced on its website that victims of Hurricane Hermine in counties of Florida that are designated as federal disaster areas qualifying for individual assistance have more time to make tax payments and file returns. Certain other time-sensitive acts also are postponed. This article summarizes the relief that's available and includes up-to-date disaster area designations and extended filing and deposit dates for all areas affected by storms, floods and other disasters in 2016. Who gets relief. Only taxpayers considered to be affected taxpayers are eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts. Affected taxpayers ar…

Trump's Tax Returns

The controversy swirling around Donald Trump's tax returns is getting more and more ridiculous. First, Donald Trump is continually being audited by the IRS and many state tax agencies. There is absolutely no way his tax attorneys would ever let him release his tax returns in the middle of an audit. That is foolish and would be legal malpractice.

Hillary likes to focus on Donald Trump not releasing his tax return to avoid the fact that she and Bill Clinton have earned hundreds of millions of dollars in speaking fees since Bill's retirement from the Presidency. The Clintons have also taken big advantage of our federal tax laws such as bear $700,000 tax deductible loss in 2015.

The facts are very simple: the Internal Revenue Code and state tax laws are far too complex. Clinton is talking about increasing taxes and making things more complex. Trump is talking about decreasing taxes. But no one is addressing tax simplification except for Libertarian party candidate Gary Johnson. It…