Proposed Tax Reform Provisions by the House and Senate November 28, 2017
There are differences between the tax reform provisions proposed by the House and Senate. More changes are likely to occur as the Senate votes on its version in the next several days. Then, there must be a reconciliation of differences before we finally see the Tax Cuts and Jobs Act head to the President’s desk for signature.Western CPE instructor, Mark Mirsky has provided us with a summary of the differences for both businesses and individuals.View Summaries (PDF)Tax Cut and Jobs Act of 2017 – Business ProposalsTax Cut and Jobs Act of 2017 – Individual ProposalsUpdate: The tables below have been updated …
Tax Reform Bill Introduced Nov 9, 2017 November 10, 2017
By: On November 9, 2017, the Senate Committee on Finance introduced the Chairman’s “conceptual mark” of its tax reform plan, and the House Ways and Means Committee voted (along strict party lines) to approve its amended Tax Cut and Jobs Act.The plans differ in many ways. There will be many changes before we see final legislation making its way to the President’s desk as donors, lobbyists, and constituents weigh in. Here is a comparison chart that briefly summarizes the major proposals affecting our individual client.Individual proposalsHouse(HR 1 as amended)Senate (“conceptual mark”)Individual tax rates12%, 25%, 35%, and 39.6%.Imposes highest rate at $1mMFJ and $500k …
House Ways and Means Committee Releases Its TCJA in First Effort Toward Tax Reform November 3, 2017
On Thursday, the House Ways and Means Committee released a 429-page bill aimed at tax reform. The Tax Cuts and Jobs Act has winners and losers. The losers are already lining up to lobby for changes to reinstate and protect their precious “sacred cows” Thus, as you would expect, this legislation has a long way to go before it is on the President’s desk. Here is a brief summary of this first try at tax reform1.Individual ProposalsIndividual rates would be reduced. Proposed Tax Rates and BracketsRateSingleMFJMFSHOH12%<$45,000<$90,000<$45,000<$67,50025% $45,001 – $200,000$90,001 – $260,00$45,001–$130,000$67,501– $230,0035%$201,000- $500,000$260,001-$1,000,000$130,001-$500,00$230,001–$500,00039.6%Over $500,000Over $1,000,000Over $500,000Over $500,0002. Personal exemptions would be eliminated.3. …
Protecting Yourself and Your Clients Against Ransomware November 2, 2017
By: Ransomware attacks are an increasing threat to the public. These attacks indiscriminately affect countless computers and can cause permanent loss of personal, organizational and client data every year. These attacks are responsible for billions of dollars in lost productivity, damaged reputation, and direct financial loss. Even the IRS has warned tax professionals that ransomware attacks are on the rise worldwide, and has launched a security awareness campaign called “Don’t take the Bait” to help tax professionals navigate these threats. You may be asking yourself, “what is a ransomware attack”? Or more importantly, “how do I protect myself, my organization, and …
Property Tax, Mortgage, and Filing Deadline Relief for CA Fire Victims October 17, 2017
Property taxes. Temporary property tax reductions are available for homes destroyed or damaged by fire. The property owner must apply to the County Assessor within one year from the date of the fire for tax relief. County Assessor contact information is here. Comment. This relief is available for all property where value is reduced more than $10,000 by a fire, not just property in the wildfire areas.For people who live in counties where Governor Brown has declared a state of emergency, fire victims can apply for a deferral of their next property tax payment …
A Framework for Corporate Tax Reform October 10, 2017
The US corporate income tax rate is the highest among the industrialized nations and the fourth highest in the world. As economies become global, international competitiveness becomes more important.Most agree that corporate tax reform is needed to put US corporations on a more equal footing with foreign businesses. Although short on details, leadership from the House, Senate and administration have proposed a Tax Reform Framework to the House Ways and MeansCommittee, charged with writing the tax reform legislation. The proposals include:1. Lower the top corporate tax rate from current 35% to 20%. This reduction is estimated to cost $1.5 trillion in the …
Tax Reform Framework for Individuals October 10, 2017
Tax reform was part of President Trump’s campaign promises. We each know personally of the complexities in a tax code with 4,029 pages and year-after-year changes. Individuals want tax reform. Is this the year?Although short on details, leadership from the House, Senate, and administration has proposed a TaxReform Framework to the House Ways and Means Committee, charged with writing the tax reform legislation. The individual proposals include:1. Reduce tax rates from seven to three—12%, 25%, and 35%. The increase from the current 10% to 12% could cost some taxpayers more but the larger standard deduction is intended to offset the rate increase. The income …
Equifax Data Breach Takes Immediate Action September 11, 2017
There has been a massive data breach at Equifax, one of the nation’s three major credit reporting agencies. 143 million individuals are at risk for identity theft. Hackers accessed people’s names, Social Security numbers, birth dates, addresses and, in some instances, driver’s license numbers. They also stole credit card numbers for 209,000 people.To protect yourself and your client, go to https://www.equifaxsecurity2017.com to determine if your data was breached and to sign up for credit file monitoring and identity theft protection. The offering, called TrustedID Premier, includes 3-Bureau credit monitoring of Equifax, Experian and TransUnion credit reports; copies of Equifax credit reports; the …
eTax Alert: Self-Directed IRAs August 23, 2017
By: Tax expert Vern Hoven, CPA, MT discusses the challenges of self-directed IRAs using real-life scenarios, and how to legally establish Rollovers as Business Startups (ROBS).To stay current on topics like this and potential changes from the Trump administration, sign up for the industry’s most comprehensive tax update. Make sure you and your clients are prepared for the changes as they happen. Sign up now to take advantage of early bird pricing.Vern Hoven: If we have any area that is causing a little bit of consternation for preparers, it is in the area of self-directed IRAs. Your material and the slides cover self-directed IRAs. I guess the problem …
Tax Ramifications of Missed 401(k) Loan Payments August 15, 2017
A few missed payments on a 401(k) loan, even though the delinquency was the employer’s mistake, didn’t stop the IRS from collecting tax and penalty on a deemed distribution. This is “borrower beware” tax law.Missed Payments on 401(k) Loan Result in Deemed Distribution (Louelia Salomon Frias and Mervyngil Salomon v. Comm., TCM 2017-139)Louelia Frias borrowed $40,000 from her 401(k) plan when she went on maternity leave. The loan agreement required biweekly payroll deductions to start on the first billing statement beginning after August 10, 2012. In the event that a payment was missed, the loan agreement allowed Mrs. Frias to pay …
eTax Alert: Tax Ramifications of Medical Marijuana August 14, 2017
Law requires reporting of all income including that from illegal activity. Tax expert Vern Hoven breaks down what the IRS and court cases say about deductions and reporting related to medical marijuana sales. To stay current on topics like this and potential changes from the Trump administration, sign up for the industry’s most comprehensive tax update. Make sure you and your clients are prepared for the changes as they happen. Sign up now to take advantage of early bird pricing.Vern Hoven: What is the tax ramification of selling Marijuana? In this case, it’s medical marijuana. In medical marijuana, the reportable rule 61A says you got to …
eTax Alert: Tax Ramifications of Divorce August 10, 2017
Divorce settlement, so what’s the first thing we need to know? In a divorce, if the division of the marital assets is a non-taxable event, that’s what quotation 10-41 says. Now, the problem is when it says it’s a not-taxable event, it’s treated like a gift. Most certainly it isn’t a gift. They like each other and so when we’re talking about a divisional marital asset is treated like a gift that means that the basis goes with whoever gets the property. It’s not a sale. It’s a gift. Why could we have a problem with this? What happens if …
eTax Alert: Charitable Deductions August 3, 2017
Don’t stop reading this important Tax Court decision because the charity deduction is so big – none of my clients donate that much – or because the taxpayer claimed outrageous FMV on the donated property – I’d never let my client get that greedy. Instead, read to the end to find out that the Tax Court disallowed the entire charitable deduction because there was an omission on the Form 8283. Did I forget to completely fill in the form? The court didn’t care if the omission was intentional or unintentional. The deduction was disallowed.Missing Cost on Appraisal Summary Nixes Charitable Deduction (RERI I, LLC, 149 …
eTax Alert: Identify Theft and Your Clients July 21, 2017
Vern Hoven addresses top scams aimed at tax preparers including phishing scams, phone scams and identity theft. You’ll learn how to protect yourself and your clients.To stay current on topics like this and potential changes from the Trump administration, sign up for the industry’s most comprehensive tax update. Make sure you and your clients are prepared for the changes as they happen. Sign up now to take advantage of early bird pricing!Vern Hoven: The Internal Revenue Service in your material usually has the top 12 scams. I only had enough room on this slide to put on the top six, so I’ve decided, “top six …
eTax Alert: Employment Tax July 19, 2017
In a recent decision, the Tax Court provided relief to an employer who misclassified workers as independent contractors. If your client is facing a big employment tax bill, this case may provide help in minimizing the taxes due.Court Says That IRS Can Provide Info on Taxes Paid by Reclassified Workers((Mescalero Apache Tribe v. Comm., 148 TC No. 11 (April 5, 2017))The IRS reclassified hundreds of Mescalero Apache Tribe workers as employees. Reclassification made the Tribe liable for taxes for its workers whom it improperly labeled as contractors during the 2009-2011 tax years.Form 4669 to the rescue. Section 3402 lets an employer …
Six Questions To Ask Your Clients Today about Their Estate Planning July 7, 2017
Estate planning is not just for the ultra-rich. But their mistakes, when they have plenty of money to pay for the best advice, make a dramatic starting point for a discussion about transferring family assets to the next generation.Prince died Apr. 21, 2016 without a will, although his estate is valued at as much as $500,000,000. At a probate hearing, 12 attorneys represented the various heirs. Why would a very wealthy and very successful musician, who allegedly kept his music in a vault to protect, fail to safeguard that music through estate planning? Prince’s estate planning might have been more …
Health Care & Tax Planning: Changes are Coming June 29, 2017
How to Begin to Prepare Your Clients for Changes to the Health Care Law.The House of Representatives passed its version of a repeal and replacement of Obamacare. The American Health Care Act is now in the Senate and it will be a long, arduous effort until the Senate passes a replacement bill. And then, it’s on to reconciliation. In other words, it will be several months before the replacement legislation is final. But the expected delay won’t stop clients from asking you questions about their health insurance prospects, as well as about tax planning. Here are six tax changes in the House bill: 1. The individual …
Nonprofit Schools, Hospitals, and Tribal Casinos Are New Targets of Dangerous W-2 Phishing Scam (IR-2017-20) March 22, 2017
Payroll/HR Department receiving email from CEO/CFO requesting list of all employees’ W-2s probably is new W-2 phishing. Cyber criminals are using various spoofing techniques to disguise an email to make it appear as if it is from an organization executive to an employee in the payroll or human resources department requesting a list of all employees and their Forms W-2. This W-2 scam, which first appeared last year, is circulating to a broader cross-section of organizations, including school districts, tribal casinos, chain restaurants, temporary staffing agencies, healthcare providers, and shipping and freight companies. In the latest twist, the cyber criminal follows …
Things to Tell Your Client About the Obamacare Replacement NOW March 16, 2017
The promised repeal and replacement of Obamacare (the Affordable Care Act) is in writing. Paul Ryan, Speaker of the House, introduced the American Health Care Act (AHCA) on March 7, 2017. The bill has a long way to go before it is law. But during our busy tax season, clients will have questions on how the proposal affects them and their family. Here are a few pointers:1. The individual mandate and the employer mandate are repealed in the proposed legislation effective after 12/31/2015. Thus, there would be no penalties for failure to have health insurance or to provide health insurance …
How Long Are Corporate Extensions? February 26, 2017
How Long Are Corporate Extensions? The Code Says Five Months, but the IRS Says Six Months! Hurray!The IRS has reassured the public that it knows what it is talking about in the 2016 instructions for Form 7004. Apparently, the IRS has been getting inquiries from preparers who are wondering if the instructions for Form 7004 are correct. The instructions indicate that the automatic extension period for corporations is six months, while §6081(b) states that the extension period for corporations is five months. The IRS explained that they were relying upon §6081(a) for the authority to grant six-month extensions, rather than …