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Thursday, July 25, 2013

Online Taxes News Links for 7-25-13

Lots of news in taxes today, if you want your news posted here or you have some tax advice, please send me a message, a comment, or on our twitter account.

Japan Seen Needing $50 Billion to Cushion Sales-Tax Rise: Japanese Prime Minister Shinzo Abe, now sitting on the biggest parliamentary majority in six years, faces the threat of political dissent within months as a planned sales-tax rise threatens to arrest an economic rebound. The world's third-largest ...

Louisiana To Offer 'Fresh Start' Tax Amnesty Program: That's how many of my tax compliance clients feel. They never start out to get behind on their taxes. It usually starts with a little delay ? maybe an illness or a personal issue. And then the delay gets bigger. And bigger. And at some point, the ...

Fraternities Lobby for Tax Break Without Hazing Penalties: Besides pushing the tax bill, FratPAC, as the Fraternity and Sorority Political Action Committee calls itself on its Twitter page, has helped dissuade U.S. Representative Frederica Wilson from filing federal anti-hazing legislation. Wilson, a Democrat ...

Dell Considered Novel Tax Strategy in Buyout: Joshua Lott/ReutersDell rejected a structure that would have deemed the company a partnership for United States tax purposes. In the proposed buyout of Dell by its founder, the company considered but rejected as too risky a novel strategy that tweaks ...


IRS pursuing 'stateless income' tax enforcement: official: ... Internal Revenue Service is pursuing tax enforcement cases against companies over the issue of "stateless income," a senior agency official said on Wednesday in a reference to corporate profits that are not taxed by any country. Erik Corwin, an IRS ...

Internal Revenue Service scandal ties to Obama appointee: Internal Revenue Service scandal ties to Obama appointee. Posted: July 23, 2013 - 4:15pm. Advertisement. Does anyone recall when the Internal Revenue Service (IRS) scandal broke? Fingers were pointed at some rebel agents in the Cincinnati office.

US court blocks Internal Revenue Service's bid to help Indian IT: MUMBAI: The US Internal Revenue Service's (IRS) efforts to help Indian tax authorities uncover fincancial information of a US resident, alleged to have evaded tax in India, have hit a road block. A US district court has recently quashed summons issued ...

Courtney Love In the Hole With the IRS, Owes $260K in Back Taxes: The Hole singer reportedly owes the Internal Revenue Service more than $260,000 in unpaid back taxes. According to TMZ, the IRS filed a tax lien against Love on July 11, claiming that America's Sweetheart needs to settle outstanding debts from 2009 and ...


5 from Passaic charged in $2.5M tax refund scam: Perpetrators of such refund scams typically use Social Security numbers and other personal identifying information obtained from unwitting residents of Puerto Rico because they are not required to pay income tax unless they work for U.S.-based ...

IRS, States Call on IBM, LexisNexis, SAS to Fight Tax Fraud: A Miami law-office employee admitted in February he had accessed his firm's LexisNexis account and stolen thousands of Social Security numbers of prison inmates?prime targets for tax-fraud identity theft because they are unlikely to file returns?and ...

Florida's 'First Lady' of tax refund fraud gets 21 years in prison after ...: Those involved in the tax fraud operation used stolen Social Security numbers to file returns, according to the Global Dispatch. The scam meant that ordinary taxpayers had to wait for up to a year to receive their refunds. Rashia Wilson. Sentenced ...

IRS to Biz Owners: Beware of Payroll Tax Scammers: IRS to Biz Owners: Beware of Payroll Tax Scammers The Internal Revenue Service wants owners of small businesses ? and just about any sized business ? to watch out for unscrupulous third-party providers who are entrusted with collecting and timely ...

Sales Tax Changes and Taxability Issues Prompt New Industry Tax Gateway on ...: Internet sales tax is a hot topic these days, but unfortunately, sales tax changes and product taxability challenges are not new to most businesses, especially those in industries with particularly complex or rapidly changing sales tax regulations ...

Still plenty of time to seek homestead exemption before property-tax changes: Franklin County residents now have until the end of the year to apply for a homestead tax exemption, before qualifications change under the new state-budget law, the auditor's office said this week. The deadline was extended from June 3 to Dec. 31 to ...

City Leaders Debate Arts Tax Changes: Portland City Council weighed options Wednesday for altering the city's arts tax. Voters last November approved a $35 per household tax supporting arts education and arts organizations. The tax is subject to several legal challenges, but the city's ...

Pennsylvania Enacts "Delaware Loophole" Closer And Other Significant Tax ...: The new law reduces the tax rate from 1.25% to 0.89% and changes the tax base by including only bank equity capital, not total equity capital as under present law. Further, three-factor apportionment based on a bank's payroll, receipts, and deposits is ...

McCrory signs new tax law: Gov. Pat McCrory, flanked by members of the N.C. General Assembly including Speaker of the House Thom Tillis, right, jokes before he signs the HB 998 for Tax Reform in the ballroom at the Executive Mansion in Raleigh, N.C. on Tuesday, July 23, 2013.

Weigh in on state tax law: Sen. Galen Hadley, the chairman of the Tax Modernization Committee, announced on Tuesday that several public meetings will be held around the state to discuss the possibility. Those meetings include a Sept. 24 date at North Platte Community College ...

CJEU: Danish Exit Taxation Is Contrary To EU Law: In its judgment of 18 July 2013 the Court of Justice of the European Union (CJEU) held that the Danish rules on exit taxation of cross-border transfers of assets within a company are contrary to EU law. New Danish legislation must be expected ...

Debate: How should tax law change?: Baucus says any tax break that survives his initial cut has to help grow the economy, make the tax code fairer, or effectively promote an important policy objective. Although the last of these might be too broad, Baucus' approach is the best, and ...

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Tuesday, January 8, 2013

Post-Fiscal Cliff Changes in Federal Tax Law to Affect Small Business Owners

Source: http://www.newsobserver.com/2013/01/07/2586891/beyond-the-cliff-a-tricky-path.html

By Virginia Bridges - vbridges@newsobserver.com

Frustration, relief and confusion.
Those are the emotions of small business owners in the wake of the “fiscal cliff” deal that defined some key tax provisions for businesses and individuals, but left a lingering cloud of uncertainty.

A week ago, Congress prevented the nation from falling off the so-called fiscal cliff with a bittersweet compromise. Triangle business owners said they were relieved that the provision included a permanent fix for the estate tax, but they complained about the immediate sting from the decision to not extend the 2 percentage point reduction in the Social Security payroll tax.

“ ‘What do we do? What is really there?’ ” are questions that small business owners are asking, said J.A. Lesemann Jr., managing member of the Huntersville firm Lesemann & Associates and chair of the N.C. Association of Certified Public Accountants.

Lesemann suggests that business owners advise their employees that the payroll tax holiday is over. In 2011 and 2012, workers’ Social Security payroll taxes were reduced to 4.2 percent, down from 6.2 percent. Meanwhile, employers continued to pay 6.2 percent of the now total 12.4 percent of an individual’s total wages.

Business owners and their advocates expressed concern about tax increases on higher income earners and the delay on deciding on spending cuts to address the debt ceiling.

“As long as the federal government does not have a plan to reduce spending and address the deficit, small business owners are very concerned in very close future months that the plan that Congress proceeds with will include tax increases,” said Gregg Thompson, the state director for the National Federation of Independent Businesses.

Mary Brogan, spokesperson for the National Small Business Association, said the lingering national debt could have a chilling effect on growth as businesses hesitate to take on additional employees or debt.
“Consumers, business-to-business transactions, I think everybody is going to tighten things up,” Brogan said.
Accountants for small businesses, however, touted components of the deal that will allow some owners to make retroactive expense deductions, encourage the purchase of new equipment and extend some small business tax credits.

Payroll tax worries
Many small business owners expressed concern about the immediate impact of the payroll tax increase, but they said it would take a while to understand how other aspects of the legislation would impact their bottom line.

“(The payroll tax) is going to hurt my employees. It is going to hurt me. It is going to hurt everyone,” said Brian OliverSmith, CEO of Urban Planet Mobile, a Durham company that provides mobile digital education products.

OliverSmith is also worried about the impact of increasing taxes on individuals and families earning more than $400,000 and $450,000, respectively.

Businesses such as Urban Planet Mobile expand with the assistance from other business owners, Oliver Smith said, “So if you tax them too aggressively, that goes away.”

Brogan said the lowered tax threshold impacts a limited but important group of business owners – those who are more likely to expand and hire new employees. The limit creates a fairness issue for businesses that pass through income to owners.

Certain shareholders will face a maximum 39.6 percent tax rate, whereas a Wal-Mart or an AT&T is going to be close to a 35 percent tax rate, Brogan said.

S corporations, businesses in which shareholders report profits and losses on individual income tax returns, might want to think about a change in structure, but will face other tax challenges as different entities, accountants said.

“It is kind of that conundrum that they are in,” said Tim Robinson, an accountant with Raleigh firm Hughes Pittman & Gupton. “Which is better?”

On the plus side
Despite the concerns, business owners, their advocates and accountants applauded some aspects of the changes.

The legislative compromise includes a fix for the estate tax exemption, which was scheduled to drop to $1 million, but will remain at $5.12 million. The maximum tax rate will rise 5 percentage points to 40 percent after reaching that $5.12 million threshold.

The fix is key for Mike Strowd, co-owner of Maple View Farm in Hillsborough. If something happened to Strowd, and his two daughters inherited half the farm, they would probably have to sell some of the land to pay the tax.

“Then you wouldn’t have enough property for Maple View to exist,” Strowd said.
Increased allowable expensing under Section 179 of the tax code and the extension of the bonus depreciation could be a huge benefit for small businesses, Robinson said.

Limits for Section 179, which allows small businesses to deduct qualified equipment purchases, dipped from $500,000 in 2011 to $125,000 in 2012. The threshold was scheduled to drop to $25,000 in 2013. The fiscal cliff package bumped allowable expenses back to $500,000 in 2013 and 2012, retroactively.
The bonus depreciation, which allows businesses to recover up to 50 percent of the cost of qualified purchases, was also extended through 2014.

These posts are for informational use only to educate people about their online income taxes and the financial world around them. If you found this helpful, share the original article or this one, and help spread the word! With tax season rapidly approaching let us get you the best income tax return you can possibly have by e-filing! Leave a comment if you know what else may be on the horizon for our rapidly-changing taxes!