Recently in the Taxes Category
5:43 PM February 26, 2014
By Ann Sullivan
Ever wonder why paying taxes is so complicated? There's a commercial that says every year Americans leave $1 billion in unclaimed deductions and tax credits they are entitled to. Apparently so hard to understand that Americans just donate that money to the Treasury by failing to claim what is theirs.
A Congressman is out to change that. Dave Camp from Michigan just released a comprehensive draft of what he thinks would end up with more money in the Treasury and a whole lot less headache for business owners who do the tax dance every April. The Congressman spent three years traveling the country and holding Congressional hearings trying to figure out how to reverse the complicated tax system we currently have in place.
Highlights include getting rid of the seven tax brackets and have only two brackets for households: 25% and 10%. For those of you who have a combined income of above $450,000 don't hoop and holler too much--there will be a 10% surcharge on top of the 25% bracket. Let the record show that 99% of households would fall under the 25% bracket. Individuals would claim a standard deduction of $11,000 and $22,000 for married couples. It would also get rid of the hated AMT. The mortgage deduction would be limited to $500,000, cutting in half the current deduction.
On the business side, the plan would drop the corporate tax rate to 25% and the R&D tax credit would be made permanent. Investment income would be treated as normal income but 40% of it would be exempted. Camp says that would result in a drop of 3% over what is paid under today's system.
Kudos to the Congressman and the GOP leadership in the House for tackling this gargantuan task. The Committee on Ways and Means, which Congressman Camp chairs, is interested in your comments. You can find out more about the proposal here. Whether or not the proposal will ever make it to the President's desk for a signature remains to be seen. But this is a trailblazer when it comes to reforming the overly complicated tax code--something every business owner longs for in the first quarter of the year.
6:36 PM August 2, 2013
If you've ever used your smartphone or tablet to buy and download a digital good or service, such as an app, music, movie, e-book, video game, etc., then you'll want to pay attention. When it comes to how you're taxed for those purchases, there is not a "national framework" or some "rules of the road" for how this growing digital marketplace should be fairly taxed at the state and local level.
- The legislation being considered would make sure consumers aren't punished with multiple taxes on digital purchases. It would prevent consumers from being double or even triple-taxed on an mp3, video or on that latest incredible app, as could be the case today.
- The bill reinforces Congress's important role in making tax policy for commerce that crosses state and international borders. That's more important than ever with so many people making online purchases with their wireless device.
- It would clearly establish which jurisdiction (the consumer's home billing address, presumably) has the right to tax digital transactions.
1:07 PM January 17, 2013
The IRS announced that it is providing a new, simpler option for calculating the home office tax deduction, allowing small business owners and employees who work from home and who maintain a qualifying home office to deduct up to $1,500 per year. Click here for a blog post from SBA Administrator Karen Mills and Treasury Deputy Secretary Neal Wolin that explains the new option further. #WIPP
11:20 AM September 28, 2012
i read a great definition on the broadband.gov site that you should take a few minutes to read because it is important to your business. Allow me to excerpt a few relevant points:
6:25 PM October 31, 2011
Tomorrow, the House of Representatives is scheduled to vote on H.R. 1002, the Wireless Tax Fairness Act of 2011. H.R. 1002 would put a five-year moratorium on the taxes and fees charged to wireless consumers.
According to the findings, of the Cellular Telecommunications Industry Association (CTIA), the average wireless consumer is charged more than 16% in taxes and fees while other taxable goods and services are only 7.4%. Additionally, 47 states along with the District of Columbia are charging wireless consumers more than other taxable goods and services. Five states, including Nebraska, Washington, New York, Florida and Illinois, charge more than 20%.
As a result, more than 140 Senators and Representatives have co-sponsored the Wireless Tax Fairness Act of 2011. This bipartisan legislation would put a five-year freeze on these taxes and fees. The freeze would allow wireless consumers some much needed relief during these challenging conditions and give time for an examination into the discrepancy of wireless tax rates as compared to other goods and services. Moreover, the freeze would not take away any existing revenue from state and local governments, but would give them time to reform their wireless tax policies.
If you are in favor of this legislation, please make your voice heard by contacting your Representatives and Senators. With the House voting tomorrow, be sure to voice your support for this bill to Representative of your Congressional district. Write your elected officials here.