Tuesday, April 30, 2019
Monday, April 29, 2019
Sunday, April 28, 2019
Saturday, April 27, 2019
Friday, April 26, 2019
Thursday, April 25, 2019
Wednesday, April 24, 2019
Tuesday, April 23, 2019
Monday, April 22, 2019
Sunday, April 21, 2019
Saturday, April 20, 2019
Friday, April 19, 2019
Tax Day still on the horizon in 5 states
Most U.S. taxpayers are breathing a sigh of relief as this week winds down. They made it through Tax Day 2019, getting their annual federal return to Uncle Sam.
Millions also filed their state returns at the same time. They live in the 43 states and District of Columbia that collect some sort of personal income tax.
The majority of those state tax departments follow the Internal Revenue Service's filing time frame.
But not all.
Five states have return due dates that are a tad later than the mid-April federal deadline. They are:
Weekend rules apply: Don't freak out Aloha State taxpayers. You don't have to get your Form N-11 to the Hawaii Department of Taxation by tomorrow.
But you might have to work on it over the weekend.
Since Hawaii's April 20 state tax return filing deadline falls on a weekend this year, you get until the next business day. That's Monday, April 22.
And a quick reminder for all y'all in the First, Hawkeye, Old Dominion and Pelican States. If you didn't already file your state returns when you submitted your federal taxes, you need to start looking at your state's tax requirements now.
Your state's tax deadline will be here before you know it.
File for free: The good news is that all of these states offer free online filing for their residents.
Remember, though, that if you owe and pay by credit card, those payments are handled by private vendors and they collect a fee for getting your money to your state tax collector.
Get state free file details at the individual state tax departments' websites. The links in the bullet list above will take you there.
You also might find these items of interest:
- Don't forget about your state taxes
- Dakota residents have biggest federal tax bills, says study
- Unpaid state & federal debts could mean smaller IRS refunds
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source https://www.dontmesswithtaxes.com/2019/04/tax-day-still-on-the-horizon-in-5-states.html
Thursday, April 18, 2019
Wednesday, April 17, 2019
Tuesday, April 16, 2019
How about making April 30th Celebrating Taxpayers Day?
A few things lead me to suggest this. The reasons mostly tie to my recent research and writing on improving transparency of our tax systems.* I like all principles of good tax policy (I hope we all do). I think that two on the AICPA set of principles of good tax policy need more attention because doing so will help tax systems to better meet the other ten principles the AICPA promotes. These two principles:
- Transparency and visibility - Taxpayers should know that a tax exists and how and when it is imposed upon them and others.
- Accountability to taxpayers - Accessibility and visibility of information on tax laws and their development, modification and purpose are necessary for taxpayers.
Here are three recent events that lead me to suggest starting a Celebrating Taxpayers Day.
1. IRS Commissioner Rettig issued a message on April 12 thanking taxpayers. The first two paragraphs follow:
"As the tax filing deadline approaches on April 15, I’d like to thank taxpayers for taking the time to file and pay their taxes. Our nation’s tax system is built around the concept of voluntary tax compliance, meaning citizens comply with their civic duty each year by preparing and filing their taxes – without direct government intervention.Why not make this "thank you" an annual event on a specified date with an explanation of why taxpayers should be thanked, the importance of voluntary compliance, and seize an opportunity to build and support positive tax morale.
This principle has helped make our tax system a model for the entire world. Thanks to taxpayers, this system helps fund our great nation. Each year, 95% of the gross receipts of our country flows through the IRS – about $3.5 trillion last year – funding critical aspects of the U.S., ranging from roads and schools to the nation’s military."
2. In my research I came across a 2015 OECD report, Building Tax Culture, Compliance and citizenship: A Global Source Book on Taxpayer Education. It lists activities of 28 developing countries for promoting tax compliance. A few of them have celebration days. For example, Rwanda has an annual Taxpayers Day celebrating compliance and helping citizens understand and appreciate how taxes and the country's development are connected. The president officiates at the event and a report on tax revenue data and tax agency challenges is released. Bangladesh holds a National Income Tax Day 15 days before the tax due date. There are street processions, workshops, conferences and tax clinics. They also show documentaries and dramas on taxation.
Celebrating Taxpayers Day in the U.S. could be educational and a reminder of the importance of taxes to our economy and society. It could also be a day where state and local governments help explain their taxes and budgets to their citizens, an opportunity for debates on current tax issues, and release of important government reports about our tax and budget systems. All levels of government release many tax and budget reports throughout the year, why not highlight some key ones on April 30 to draw greater attention to them?
3. Our tax gaps are growing - The IRS estimates the federal tax gap at $458 billion per year. This is more than we collect from the corporate income tax even before the corporate rate was lowered by the Tax Cuts and Jobs Act. A report from the Treasury Inspector General for Tax Administration (TIGTA), Expansion of the Gig Economy Warrants Focus on Improving Self-Employment Tax Compliance (2/14/19) reports some alarming data that indicates we need greater taxpayer education and to better support positive taxpayer morale. Among many findings was that 25% of individuals in a sample of 3.8 milion gig workers filed a 1040, but didn't report their gig income on either the other income line or Schedule C. And, 13% with self-employment tax income who received Form 1099-K did not include Schedule SE or pay their SE tax with their 1040. The IRS also found a 237% increase from 2012 to 2015 in discrepancies between Forms 1099-K filed and what was reported on Forms 1040.
A 2018 report from the California Franchise Tax Board found that about 70% of gig economy service providers receive no tax reporting form, which increases non-compliance. With understanding of tax rules and recordkeeping low, compliance without reporting forms become a bigger challenge and frustration. A 2018 QuickBooks survey found that 32% of self-employed individuals admit they don't report all of their income.
The above threee items indicate to me that a Celebrating Taxpayers Day would be a positive step in building respect for our tax systems, building a culture of filing and paying and being proud of that fact, and improving understanding of our tax systems. And, hopefully have some fun with it!
Why April 30? Well, people are still busy on April 15 filing and sometimes due to weekends and Emancipation Day, filing day falls on April 16 or 17 or 18. April 16 is Emancipation Day (the day in 1862 when President Lincoln signed an emancipation decree for the District of Columbia). April 30 gives preparers time to recover, and individuals getting refunds to hopefully have them in time for the celebration. In history, April 30 is the day George Washington was inaugurated (1789), the U.S. Navy was formed (1798), San Jose State University formed** (1857), the ice cream cone was unveiled in the U.S. at the World's Fair in St. Louis (1904), and the World Wide Web emerged in the public domain by Tim Berners-Lee (1989) and its source code was released to the public in 1993.
Yes, there is something called Tax Freedom Day® by the well-respected Tax Foundation. They describe this day as the one marking "how long Americans as a whole have to work in order to pay the nation’s tax burden." For 2019, it is April 16. It isn't a national celebration day though. Also, this information is useful, but I find it is easily misunderstood. Most people do not work until April 16 to pay their taxes but think they do when they hear this information, which harms understanding of our tax system. But it would be a good topic for discussion for April 30 Celebrate Taxpayers Day, to help improve tax literacy and transparency.
So, Celebrating Taxpayers Day on April 30. What do you think?
*See for example, Nellen, "'Oh, I See': Suggestions for Greater Tax Transparency," State Tax Notes, 11/20/17. Also, Nellen, Suggestions for Improved Transparency and Accountability of California Taxes and Related Information, 10/12/18.
**I'm not suggesting April 30 for the SJSU connection. In fact, I wasn't focused on the exact date of the founding of Minns' Evening Normal School (how SJSU started in San Francisco); on campus, we all just say SJSU was founded in 1857 (btw, I'm one of SJSU's historians).
source http://21stcenturytaxation.blogspot.com/2019/04/how-about-making-april-30-celebrating.html
Monday, April 15, 2019
Sunday, April 14, 2019
Saturday, April 13, 2019
Friday, April 12, 2019
Tax Reform Ideas to Reflect How Small Businesses Operate in the Modern World
For example, the TCJA increased the Section 179 expensing amount to $1 million, adjusted for inflation annually. But, despite the fact that intangibles are important to all sizes of businesses today (and for the past two decades), it only applies to tangible assets (and off-the-shelf software), not intangible assets, such as acquisition of a patent or domain name.
The TCJA also allows for use of the cash method by businesses with average annual gross receipts in the prior 3-year period of $25 million or less ($26 million starting in 2019). Yet, despite the higher Section 179 amount and the use of the cash method, a small business might still be amortizing such items as acquired intangibles, start-up expenditures and organizational expenditures.
Here is the list of the 13 items from the AICPA Tax Section:
- Expand section 179 to also include intangible assets
- Further simplify accounting method rules for small businesses (such as allowing completed contract accounting).
- Increase the deduction thresholds under sections 195, 248 and 709 and adjust them for inflation.
- Simplify retirement plan options and rules for self-employed individuals.
- Modernize the definition of tax shelter (the one used in the TCJA is from 1986 before we had the passive activity loss limitation rules and before LLCs were used in all states as a common business vehicle).
- Repeal the individual and estate and trust AMT - the corporate AMT was repealed; this should have also have at least been done with respect to business preferences for all taxpayers.
- Relax the exclusive use requirement for a home office deduction (anyone taking their smartphone into their home office likely has violated the exclusive use requirement).
- Allow a deduction for health insurance of self-employed individuals in computing self-employment tax.
- Increase the current, longstanding $400 self-employment earnings threshold.
- Provide similar treatment for all businesses with respect to deducting state and local income taxes - corporations can deduct all of their taxes, all businesses should be allowed the same treatment. Today, the $10,000 SALT cap also applies to income taxes attributable to an individual's sole proprietor, partnership or S corp income.
- Limit section 461(l) and the 80% limitation on NOLs of section 172 for start-up businesses.
- Repeal section 465.
- Require all estimated tax payments to be due on the 15th day after quarter end.
source http://21stcenturytaxation.blogspot.com/2019/04/tax-reform-ideas-to-reflect-how-small.html
Thursday, April 11, 2019
Wednesday, April 10, 2019
Tuesday, April 9, 2019
Monday, April 8, 2019
Sunday, April 7, 2019
Saturday, April 6, 2019
Federal gas tax increase gaining support, but political potholes remain
The surest sign that summer is on the way is not temperature changes, but increasing gasoline prices.
Oil companies traditionally take advantage of the seasonal shift, as families here in Texas and elsewhere across the country load up their cars — and fill up the gas tanks — to hit the road.
Not too long ago, I topped off my tank with regular at $1.89 per gallon. Today the lowest price I've seen in the area is $2.36.
True, that's about half of what we saw at gas stations a couple of years ago. But we've been spoiled by low pump prices.
That may be why some lawmakers in Washington, D.C., are talking about, gasp, raising the federal gas tax.
Fuel tax timing: One school of thought is if they can slip the tax through while fuel prices are relatively low, maybe the increase won't cause to much of an uproar, especially if it is phased in over several years.
That's the plan now being discussed by both Republicans and Democrats on Capitol Hill.
It's also gotten the support the U.S. Chamber of Commerce, the American Trucking Associations and, back in 2017, even Donald J. Trump.
When Trump met with trucking industry representatives and drivers two years ago, he indicated he was amenable to increasing the gas tax as long as the funds went to highway projects.
The federal gas tax has been stuck at 18.4 cents per gallon since 1993. The corresponding diesel fuel rate also has remained at 24.4 cents since then.
fear it would push pump prices
into these extraordinary ranges.
Most drivers opposed: Professional truck drivers are likely the only motorists who support the increase.
Most Americans, however, have consistently balked at the prospect of paying more for gas due to a fuel tax increase. We love our fossil-fueled cars (sorry Tesla and other electric vehicle makers) and fuel price increases can have a major impact on many drivers' budgets.
I get it. I grew up in West Texas where a round trip of 100 or more miles to run errands or eat at a fancy restaurant was (and still is) not unusual.
Also, outside of major cities, sparse public transportation options (yes, I'm looking at you, Austin, Texas) makes driving the only viable way for a lot of folks to get around.
But the realization that America's bridges and roads are in alarming disrepair — insert your own infrastructure week joke here — is starting to sink into the public and political consciousness.
States taking fuel tax lead: Many states have recently (both in 2017 and 2018) bumped up their fuel taxes. The latest increase came this week in the politically important heartland state of Ohio.
The increases are needed, say the supporters, because newer vehicles get better mileage, meaning drivers don't fill up as often, cutting into the fuel tax revenue.
Others jurisdictions are spreading the fuel tax burden by imposing fees on electric vehicles since those drivers use the same roads, but escape the gas tax completely.
Some have even experimented with a per-miles-traveled tax. A similar national demonstration project has been proposed by a couple of House members, one a Republican and the other a Democrat.
But when it comes to the national fuel tax rates established 26 years ago, most federal lawmakers have resisted any increases.
Now, however, it's starting to look like some are ready to take a gas tax detour.
Replenishing the road fund: Part of the political shift is coming from industry support of the fuel tax increase.
Private sector buy-in has always been important, so much so that early in his presidency Trump proposed formal partnership between government and investors who would finance projects in return for revenue from tolls or other user fees.
That's still an outside possibility, but most in the public and private arenas are leaning toward the old-fashioned revenue raising option. They want to increase the federal fuels tax amounts to bulk up the Highway Trust Fund (HTF).
The HTF is where Uncle Sam gets the money to pay for roadways, bridges and mass transit. It was established in 1956 to provide a more dependable source of federal funding for the construction of the interstate highway system.
Dependable, however, is a relative term.
The HTF's two sub-funds, the Highway Account that's largely devoted to construction and maintenance of highways and bridges and the Mass Transit Account that's used toward buses, rail, subways, ferries and other types public mass transit.
The balances of both of those funds have been dropping.
The reason is because the HTF receives around 90 percent of its revenue from the federal fuel excise taxes. Taxes on tires and heavy vehicles (trucks) make up the rest of the fund’s income.
Since the federal gas tax is not pegged to inflation and has not been raised since 1993, the purchasing power of the revenue has eroded over time. If the current fuel tax rates had been indexed to inflation, the Congressional Research Service says that in 2017 the amounts would have been 31.7 cents for a gallon of gas and 42.1 cents for diesel.
The Peter G. Peterson Foundation estimates that the HTF's ability to pay for transportation projects has been cut by more than 40 percent since the last tax rate hike.
Private sector support: That's why many on Capitol Hill and beyond are supporting a gas tax increase.
The tax hike option is the easiest (relatively speaking; more on this in a minute) to implement and have minimal administrative costs since they already are being collected.
The U.S. Chamber of Commerce has endorsed a 25-cent increase over five years. The American Trucking Associations has endorsed a 20-cent increase over four years.
Leaders of the groups made their arguments last month at a Ways and Means Committee hearing on, as the committee's chairman described it, "our nation's infrastructure crisis."
Chamber President Thomas Donohue told Congress it should increase both the gas and diesel taxes by a total of 25 cents, then index the new tax rates for inflation so that there would be no need to revisit this issue in the future.
"The proposal would raise $394 billion over the next 10 years, which would be invested in our highways, bridges, and transit systems in a fiscally responsible fashion," said Donohue.
Chris Spear, president and CEO of the American Trucking Associations (ATA), offered the lawmakers a similar proposal:
"ATA's proposed solution to the highway funding crisis is the Build America Fund. The BAF would be supported with a new 20 cent per gallon fee built into the price of transportation fuels collected at the terminal rack, to be phased in over four years. The fee will be indexed to both inflation and improvements in fuel efficiency, with a five percent annual cap. We estimate that the fee will generate nearly $340 billion over the first 10 years. It will cost the average passenger vehicle driver just over $100 per year once fully phased in."
Earlier this month, Spear reiterated his group's support of a higher gas tax and placed the possibility of passage on Trump.
"If the president puts his full weight behind this and wants infrastructure and wants real money to fund it, I am confident that the votes are there, both chambers, House and Senate," Spear said on an April 3 conference call with reporters.
Political potholes ahead: But any tax increase, even one characterized as a user fee, faces obstacles. Yep, here's that political component I mentioned a few paragraphs earlier.
Although members on both sides of the aisle support to some degree an increase in the gas tax, it's unclear whether there are enough to ensure passage of even a modest hike in such a politically polarized Congress.
That concern is exacerbated by the 2020 election. It will be here before we realize. Please, please hurry. I am already sooooo tired of the campaigning by all White House wannabes. But I digress.
No candidate or party, especially in a presidential election year, wants to be tagged in campaign ads as the embracer of any tax increase, even one that would ultimately improve services most of us use on a daily basis.
The best chance any gas tax increase could happen would be for it to pass this year, providing time for any drivers'/voters' anger to subside before Tuesday, Nov. 3, 2020.
You also might find these items of interest:
- Mileage tax deduction rates for 2019 bumped up a bit
- Auto tariffs could cost low-income earners tax cut money
- RVs; Comfy, kitschy and possibly tax deductible
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source https://www.dontmesswithtaxes.com/2019/04/federal-gas-tax-increase-gaining-support-but-political-potholes-remain.html