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Do You Need To File A Tax Return in 2015? - Huffington Post

Google IRS Federal Income Tax - Tue, 2015-02-17 07:18

Huffington Post

Do You Need To File A Tax Return in 2015?
Huffington Post
To get a detailed breakdown on federal filing requirements, along with information on taxable and nontaxable income, call the IRS at 800-829-3676 and ask them to mail you a free copy of the "Tax Guide for Seniors" (publication 554). Special Requirements

and more »
Categories: Tax news

Savvy Senior: Do you need to file a tax return in 2015? - CapitalGazette.com

Google IRS Federal Income Tax - Sat, 2015-02-14 21:23

Valley News

Savvy Senior: Do you need to file a tax return in 2015?
CapitalGazette.com
Dear Retiree, Whether or not you are required to file a federal income tax return this year will depend on how much you earned (gross income) — and the source of that income — as well as your filing status and your age. Your gross ... To get a ...
Fear of Filing: Groups Offer Help With Income Tax ReturnsValley News
Unscrupulous preparers head IRS list of tax scamsTallahassee.com
Updated app IRS2Go offers refund status, tax help, connectionsKCSG
Waterbury Republican American -STLtoday.com
all 62 news articles »
Categories: Tax news

U.S. agency fixes problem hampering Obamacare applications

Yahoo Tax - Sat, 2015-02-14 19:11

A day before the open enrollment deadline for private health coverage under Obamacare, some consumers were unable to submit applications because of "intermittent issues" with income verification, the U.S. Health and Human Services Department said on Saturday. It said in a statement that it had worked with the Internal Revenue Service to fix the problem. The department said consumers who were affected should log into their account on the HealthCare.gov website and click on their 2015 application to finish it and complete their enrollment for coverage. The department said anyone who was unable to submit an application because their income could not be verified due to this or any other technical problem will receive an extension for enrollment.


Categories: Tax news

IRS Ruling Permits Inclusion of “Friendly PCs” in Consolidated Federal Income ... - The National Law Review

Google IRS Federal Income Tax - Fri, 2015-02-13 15:30

IRS Ruling Permits Inclusion of “Friendly PCs” in Consolidated Federal Income ...
The National Law Review
Under the arrangement, a parent corporation (“Parent”) owned several subsidiaries that together constituted a consolidated federal tax group (the “Parent Group”). A subsidiary of Parent had entered into various agreements with two professional ...

Categories: Tax news

Brazil’s President Raises Taxes but Fails to Deliver Promised Spending Cuts

Tax Foundation - Fri, 2015-02-13 12:45

Brazil’s president, Dilma Rousseff, has implemented new taxes to stymie the country’s growing deficit. The taxes include a R$0.22 (US$0.07) per liter excise tax on gasoline and diesel fuel, a 1.5% tax increase on personal loans (a total of 3%), a 2.5% tax increase of the Pis/Cofins (types of social contributions) on imports (a total of 11.75%), and an increase in airport taxes by an average of 14.25%. The tax increases were expected to generate around R$21 billion (US$8 billion) in revenue for the government.

The tax increases along with R$22.7 billion (US$8.4 billion) in spending cuts where projected to move the government from a primary deficit of 0.6% of GDP to a surplus of 1.2% of GDP, but the Brazilian government is unlikely to realize the surplus, which has unsettled bond markets.

Although the new taxes are generating more revenue, the promised spending cuts have failed to materialize. The president has pushed to implement the cuts, but Brazilian lawmakers responded by passing a bill to block the austerity. Moreover, the Chamber of Deputies, the lower house of the Brazilian congress, has passed a bill limiting the president’s ability to eliminate or postpone special projects through executive order.

The mixture of an increased tax burden along with continued deficit spending is a recipe from economic trouble. Sprinkle in low oil prices, which has delayed several major Petrobras projects, and inflation above the Brazilian Central Bank’s target, which has pushed up interest rates; and the Brazilian consumer has almost completely disappeared. As such, it is unlikely that the government will meet the revenue estimates, even with the additional taxes.   

The Brazilian president only has herself to blame for Brazil’s economic woes. As the incumbent president, she used tax cuts and spending programs to influence the elections this last year. It may have won her the presidency, but it caused the government to move from a primary surplus of 1.6% of GDP in 2013 to a deficit. With the presidency firmly in hand and economic concerns on the horizon, President Rousseff switched her policies to austerity.     

Only time will tell how far Brazil will slide into economic downturn. As Brazil suffer the consequences of President Rousseff’s spending spree, the voters of Brazil can contemplate if the benefits were worth the costs. For all democratic countries, Brazil’s last election is a warning. If the voters don’t punish politicians for manipulating the economy through taxes and spends, then it is the voters who will ultimately suffer the consequences.  

Categories: Tax news

IRS Free File 101 - How to File your Taxes for Free - Fox Business

Google IRS Federal Income Tax - Fri, 2015-02-13 08:39

Fox Business

IRS Free File 101 - How to File your Taxes for Free
Fox Business
Formed in 2003, IRS Free File is the product of a partnership between the Internal Revenue Service and a group of fourteen online tax software suppliers that form the Free File Alliance – including such familiar names as TurboTax, TaxSlayer, H&R Block ...
IRS Says 2015 Tax-Filing Season Is Strong Out of the GateAccountingweb.com
IRS promotes Earned Income Tax CreditDaily Herald
Outrage: Obama's Executive Amnesty Okays Tax Refunds To Illegals Who Never ...Western Journalism
WLTX.com -Journal of Accountancy -MarketWatch
all 252 news articles »
Categories: Tax news

Powerball winnings in Puerto Rico, exempt from federal tax? Nobody knows - Fox News Latino

Google IRS Federal Income Tax - Thu, 2015-02-12 12:42

ABC News

Powerball winnings in Puerto Rico, exempt from federal tax? Nobody knows
Fox News Latino
IRS officials did not immediately respond to calls seeking comment. Puerto Rico's tax code exempts Puerto Ricans from paying federal taxes on local income. The island has the discretion to set the local tax. This peculiarity has been a magnet for U.S. ...
Powerball Lottery Results: Officials Uncertain if Puerto Rico Lotto Winner ...Latin Post
3 winning tickets sold, 1 in Texas, in $564 million Powerball jackpotKWKT
Why the 3 Power Ball Winners' Net Winnings Could Differ by $57.5 MillionGo Banking Rates

all 429 news articles »
Categories: Tax news

Greece suffers 1 billion euro tax revenue shortfall in January

Yahoo Tax - Thu, 2015-02-12 08:08
Greece's tax revenues slumped 23 percent below target in January as citizens held off on paying taxes before a snap election, marking a setback for the new left-wing government as it seeks a deal with European partners to avert a financial crisis. Finance ministry data showed tax revenues were 3.49 billion euros in January, about 1 billion euros below the target of 4.54 billion set under Greece's latest budget. January's dive in revenues was largely driven by Greeks holding off before the vote in the belief that a government led by the radical Syriza party would abolish some unpopular measures such as the ENFIA property tax. "There are tax obligations that have been delayed and we are sure that we will collect them in the coming months," Deputy Finance Minister Dimitris Mardas told Reuters.
Categories: Tax news

TurboTax Fraud May Impact Federal Returns Too, FBI Investigating - Forbes

Google IRS Federal Income Tax - Thu, 2015-02-12 00:16

Forbes

TurboTax Fraud May Impact Federal Returns Too, FBI Investigating
Forbes
But all indications were that this was just a state tax problem, not a federal one. Not any more. Although details are sketchy, the ... that their federal refund may be in jeopardy. Taxpayers interviewed about the fraudulent tax filings said their IRS ...
Wave of Fake Federal and State Tax Returns Filed, Experts SayCNBC
TurboTax Update: FBI Investigating Fake Income Tax ReturnsCPAPracticeAdvisor.com

all 166 news articles »
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China Internet censorship hurts European businesses: survey

Yahoo Tax - Wed, 2015-02-11 23:52

China's Internet restrictions are hurting European businesses operating in the country, a lobby group said on Thursday, as controls over access to overseas websites are tightened under President Xi Jinping. Authorities have in recent months increased restrictions on virtual private networks (VPNs), used to circumvent China's vast censorship apparatus known as the Great Firewall which blocks websites such YouTube and Facebook. The European Union Chamber of Commerce in China said the restrictions amount to an "Internet tax", adding that 86 percent of respondents to an internal survey said they had a "negative effect" on business, a 15 percent increase compared to June. "Restricted access to key Internet tools is not merely an unfortunate inconvenience for individuals -- it is an increasingly onerous cost of doing business here that many companies are finding harder to bear," said Jorg Wuttke, president of the chamber which has around 1,800 members.


Categories: Tax news

IRS warns about "dirty dozen" tax scams - W*USA 9

Google IRS Federal Income Tax - Wed, 2015-02-11 20:40

W*USA 9

IRS warns about "dirty dozen" tax scams
W*USA 9
If the strategy uses unnecessary steps or a form that doesn't reflect its substance, the IRS could deem it abusive. • Falsifying income to claim tax credits: Don't heed anyone who advises you to "invent" income as a way to qualify for federal tax credits.
Tax filing changes with the Affordable Care Act, avoiding tax scamsSouthernminn.com
Do You Need to File a Tax Return?The Ledger
The Top 4 Reasons to File Taxes EarlyEntrepreneur
WDSU New Orleans
all 61 news articles »
Categories: Tax news

IRS warns about "dirty dozen" tax scams - USA TODAY

Google IRS Federal Income Tax - Wed, 2015-02-11 16:56

Western Journalism

IRS warns about "dirty dozen" tax scams
USA TODAY
If the strategy uses unnecessary steps or a form that doesn't reflect its substance, the IRS could deem it abusive. • Falsifying income to claim tax credits: Don't heed anyone who advises you to "invent" income as a way to qualify for federal tax credits.
IRS promotes Earned Income Tax CreditDaily Herald
Outrage: Obama's Executive Amnesty Okays Tax Refunds To Illegals Who Never ...Western Journalism
IRS Says 2015 Tax-Filing Season Is Strong Out of the GateAccountingweb.com
NBCNews.com -Washington Times
all 207 news articles »
Categories: Tax news

Proposed Tax Changes in President Obama’s Fiscal Year 2016 Budget

Tax Foundation - Wed, 2015-02-11 15:45

President Obama recently presented his budget proposal for the 2016 fiscal year. The budget proposes $3.99 trillion in spending and $3.53 trillion in revenue for a deficit of $474 billion for 2016 and a number of new tax proposals.

In total, the plan includes $2.4 trillion in proposed tax increases offset by $713 billion in new credits, deductions, and other offsets, for a total tax increase of nearly $1.7 trillion over the next ten years.

The president’s proposal contains tax changes for both individuals and businesses with the tax changes for businesses spread across two categories: budget proposals and revenue for long-run business tax reform.

The difference between the two categories is that the revenue from the business tax reform changes is ostensibly earmarked for revenue neutral tax reform to be completed at a later date. Interestingly, the budget proposal’s revenue tables do not include a reduction in the corporate tax rate to 28 percent—a provision that was included in previous budgets.

The table below includes revenue estimates for both components of the tax plan.

Proposed Tax Increases in President Obama's Fiscal Year 2016 Budget

Budget Proposals and Revenue for Long-Term Tax Reform

     

Proposals

Revenue Change, 2016-2025 (Millions of Dollars)

Budget Proposal

   

Total Revenue Increases

$1,851,843

 

Total Revenue Decreases

-$304,276

Net Revenue Change

$1,547,567

     

Revenue for Long-term Tax Reform

   

Total Revenue Increases

$550,511

 

Total Revenue Decreases

-$409,046

Net Revenue Change

$141,465

     

Complete Proposal

   

Total Revenue Increases

$2,402,354

 

Total Revenue Decreases

-$713,322

Total Revenue Change (Net)

$1,689,032

Source: U.S. Treasury, Tax Foundation Calculations.

 

A couple weeks before the release of the budget, the president provide information on some of the tax changes in his plan. Specifically, he released information on new tax increases on capital gains, a bank tax, and a number of new tax credits. The complete budget includes a number of additional tax changes—some holdovers from previous years’ budgets, such as the Buffett Rule—and many new proposals, such as a 19 percent minimum tax on the foreign earned income of U.S. corporations.

This analysis provides an overview of the proposed tax changes in the president’s fiscal year 2016 budget. The White House has additional details of the president’s proposal here. The ten-year revenue estimates for each provision are in the tables below. Greater detail of the revenue estimate for each provision is available from the Treasury Department.

Tax Changes in the Budget Proposal

As part of his fiscal year 2016 budget, the president proposed a net tax increase of $1.55 trillion with the additional revenue used for infrastructure spending and the growth in other government spending programs.

The president released details for many of his major tax proposals ahead of the State of the Union address in mid-January. Our previous analysis on these proposals is here, here, and here.

Tax Increases

The president proposes $1.85 trillion in tax increases, with many of the tax increases focused on high-income earners.

Increase Capital Gains Tax Rate to 28 Percent and Eliminate Stepped Up Basis

The president’s proposal would increase the top capital gains tax rate from 23.8 percent to 28 percent (37.2 percent in California) and eliminate stepped-up basis—a change would potentially create a 68 percent tax on capital gains upon death. Our analysis finds that the capital gains tax increase alone would shrink the economy by 0.8 percent, eliminate 135,000 jobs and actually lose revenue in the long run. Revenue estimate: $208 billion over ten years.

Implement the Buffet Rule

­The plan would implement the Buffet Rule, or “fair share tax,” a 30 percent minimum tax on high-income earners. Revenue estimate: $35 billion over ten years.

Impose a Bank Tax

The president’s plan would create a 0.07 percent tax on the liabilities of financial firms with assets over $50 billion. The White House estimates the tax would hit around 100 U.S. firms. Additionally, the Tax Policy Center found that the tax would decrease workers’ wages. Revenue estimate: $111 billion over ten years.

Increase Estate Tax Rate to 45 Percent and Reduce Exemption to $3.5 Million

The president proposes we return to the 2009 estate tax rules. This change would increase the estate tax rate from 40 percent to 45 percent and lower the exemption from $5.34 million to $3.5 million. Revenue estimate: $189 billion over ten years.

Places Limits on Retirement Accounts

The president’s plan would create a $3.4 million cap on retirement accounts. This means taxpayers would not be able to save in retirement accounts once they reach this limit. Revenue estimate: $26 billion over ten years.

Conform SECA Taxes for Professional Service Businesses

The president’s proposal would apply self-employment taxes to all business income of active owners of pass-through businesses and introduce new rules to require business owners to classify certain income as wage income instead of passive income. Revenue estimate: $75 billion over ten years.

Increase Tobacco Taxes

The budget includes an increase in the excise tax on tobacco and index the excise tax for inflation. The president would use the money to help pay for preschool and the CHIP program. Revenue estimate: $95 billion.

Limit the Value of Itemized Deductions and Other Tax Expenditures to 28 Percent

This proposal would limit the value of most tax deductions to 28 percent of each dollar of deductible income. A similar proposal appeared in the president’s FY 2015 budget and was previously made by Mitt Romney. Revenue estimate: $603 billion over ten years.

Deemed Repatriation

The budget includes a 14 percent one-time, retroactive tax on foreign corporate income currently invested overseas. The deemed repatriation is an attempt to tax the estimated $2 trillion of foreign earned income reinvested in foreign operations, which defers U.S. taxation. The president proposes to use the revenue to fund new infrastructure projects. Revenue estimate: $268 billion over ten years.  

Tax Cuts

The budget proposal includes $304 billion in new and expanded tax credits to offset the $1.85 trillion tax increase.

Child Care Tax Credit

The president’s proposal would triple the maximum allowable child care tax credit and make it available to families with higher incomes, increasing the value from $1,000 to $3,000 and the income limit to $120,000. Revenue estimate: -$50 billion over ten years.

Consolidate and Expand Higher Education Tax Credit

The president’s plan would eliminate the Hope Credit, Lifetime Learning Credit, and tuition fees, and expand the American Opportunity Credit. The proposal would expand the credit’s refundable portion to $1,500 and make part-time students eligible to claim the credit. Revenue estimate: -$46 billion over ten years.

Small Employer Tax Credit for MyRA

The president’s proposal would offer new tax credits to businesses that offer auto-enrollment in retirement vehicles. The size of the credit would range between $1,500 and $4,500, depending on the size of the business and the business’s current use of retirement plans. Revenue estimate: -$17 billion over ten years.

Expanded EITC for Workers without Children

The president’s budget would increase the EITC for taxpayers without children from $503 to about $1,000. Revenue estimate: -$60 billion over ten years.

Second-Earner Tax Credit

The president’s proposal would create a new maximum $500 tax credit for two-earner families. The credit would phase in to the maximum of $500 at $10,000 of spousal income and phase out beginning at $180,000 for a couple. Revenue estimate: -$89 billion over ten years.

Revenue for Long-Term, Revenue-Neutral Tax Reform

The president proposes $141 billion in new revenue to reserve for long-term tax reform.

In the description of his budget, the president suggests a 28 percent corporate tax rate and a 25 percent corporate tax rate for domestic manufacturers. However, the revenue estimates from the plan do not include any changes to the corporate tax rate and the $141 billion available for tax reform would be enough revenue to cut the corporate tax rate by roughly two-points on a static basis.

The plan includes $550 billion in tax increases offset by $409 billion in new tax credits or expanded business deductions.

Tax Increases

The president’s budget includes a new minimum tax on foreign-earned income, changes to the foreign tax credits, and elimination or repeal of a number of provisions used to account for real business costs for tax increase of $550 billion.

19 Percent Minimum Tax on Foreign Earnings

The president’s proposal would create a worldwide 19 percent minimum tax on foreign-earned income, eliminate the deferral of U.S. tax on foreign-earned income, and reduce the foreign tax credit to 85 percent of the value of foreign taxes paid. Revenue estimate: $205 billion over ten years.

Restrict Deductions for Interest and Limit the Ability of U.S. Firms to Invert

In order to prevent earnings stripping, the president’s proposal would create new rules that limit interest deductions of U.S. companies to foreign subsidiaries. Additionally, the budget proposes new rules to limit corporate tax inversions. Revenue estimate: $77 billion over ten years.

Eliminate Oil, Gas, and Coal Provisions

The president’s budget would eliminate a number of provisions used by oil and gas companies to help account for business costs. Among the provisions eliminated would be expensing of intangible drilling costs, percentage depletion, and an increase in amortization periods. Revenue estimate: $49 billion over ten years.

Repeal LIFO

The president proposes the repeal of last-in, first-out inventory accounting standards, which would equate to a large retroactive tax on inventories. Revenue estimate: $76 billion over ten years.

Tax Cuts

Expand and Permanently Extend Section 179

The president proposes to expand and make permanent Section 179 expensing to allow businesses to expense up to $1 million of investment in equipment in the first year. This would allow businesses to “pay taxes based on an income measure much closer to their bank statement.” Revenue estimate: -$64 billion over ten years.

Enhance and Make Permanent Research Incentives

Among other provisions, the president’s budget would make permanent the Research and Experimentation Tax Credit, the Production Tax Credit, and the Investment Tax Credit. Revenue estimate: -$128 billion over ten years.

Incentives for Renewable Energy

The president’s budget would make permanent tax credits for renewable energy production and energy efficient buildings. Revenue estimate: $43 billion over ten years.

 

Proposed Tax Changes in President Obama's Fiscal Year 2016 Budget

     

 

Proposed Tax Change

Revenue Change, 2016-2025 (Millions of Dollars)

New and Expanded Tax Credits and Deductions

   

Expand the Child Care Tax Credit

-$49,872

 

Consolidate and Expand Higher Education Tax Credit

-$45,698

 

MyRA Program with Small Employer Tax Credits

-$17,119

 

Penalty Free Withdrawals for Long-term Unemployed

-$2,458

 

Expand Retirement Plans to Part-time Workers

-$468

 

Simplify Minimum Requirement Distribution Rules

$407

 

Expand EITC for workers without children

-$59,944

 

Simplify rules for claiming EITC for workers without children

-$5,653

 

Provide Second-Earner Tax Credit

-$89,031

 

Extend Exclusion from Income Cancellation for Certain Home Mortgage Debt

-$6,967

Subtotal

-$276,803

     

Tax Increases

 

New Taxes and Tax Rate Increases

   

Reduce the Value of Certain Tax Expenditures

$603,226

 

Increase Capital Gains Tax to 28 Percent

$207,884

 

Implement the Buffet Rule/"Fair Share Tax"

$35,176

 

Impose a Bank Tax

$111,814

Subtotal

$958,100

     

Base-Broadening

   

Require Inclusion of Income of Accrued Market Discount and Limit Accrual Amount for Distressed Debt

$391

 

Require Average Cost Basis for Covered Securities

$4,375

 

Tax Carried Interest As Ordinary Income

$17,698

 

Require Beneficiaries of Deceased Retirement Plans to Take Distribution over No More than Five Years

$5,479

 

A $3.4 Million Cap on Retirement Account Accrual

$26,043

 

Conform SECA taxes for professional service businesses

$74,551

 

Limit Roth Conversions to Pre-Tax Dollars

$395

 

Eliminate deduction for dividends on stocks of corporations help in ESOPs

$8,622

 

Repeal Exclusion of Net Unrealized Appreciation in Employer Securities

$2,531

 

Disallow Deduction for Charitable Contributions that a required for College Sporting Events Tickets

$2,546

Subtotal

$142,631

     

Estate and Gift Tax Changes

   

Reinstate estate, gift and GST tax parameters from 2009

$189,311

 

Require consistency in Value for Transfers and Income Tax Purposes

$3,237

 

Modify transfer tax rules for GRATs and other trusts

$18,354

 

Modify GST Tax Treatment of Health and Education Trusts

-$231

 

Extend lien on Estate Tax Deferrals of Closely Held Businesses

$248

 

Simplify Gift Tax Exclusion for Annual Gifts

$3,446

Subtotal

$214,365

     

Tax Credits and Incentives

   

Create "Promise Zones"

-$8,627

 

Tax Credit for Production of Advanced Technology Vehicles

-$2,947

 

Tax Credit for Alternative Fuel Commercial Vehicles

-$371

 

Extend Tax Credit for Contraction of Energy Efficient Homes

-$2,498

 

Reduce Excise Tax on LNG

-$69

 

Enhance and Modify Conservation Easement Deduction

$272

Subtotal

-$14,240

     

Other Tax Increases

   

Increase Financing for Oil Spill Liability Trust Fund

$1,628

 

Reinstate Superfund Taxes

$21,243

 

Increase Tobacco Taxes and Index for Inflation

$95,142

 

Make Unemployment Insurance Surtax Permanent

$15,686

 

Expand Federal Unemployment Tax Act base

$44,755

Subtotal

$178,454

     

Tax Gap Reforms

 

Information Reporting

   

Improve Information Reporting for Contractors and Businesses

$831

 

Improve Mortgage Interest Deduction Reporting

$1,918

 

Expand Information Reporting

$2,749

     

Business Compliance

   

Increase Certainty of Worker Classification

$10,170

 

Increase Information Sharing to Administer Excise Taxes

$147

 

Provide Authority to share information about beneficial ownership of U.S. companies

$34

     

Tax Administration

   

Impose Liability on Shareholders to Collect Unpaid Corporate Income Taxes

$5,424

 

Increase levy authority for payments to Medicare provides with delinquent tax debt

$514

 

Implement a program integrity statutory cap adjustment for tax administration

$59,735

 

Streamline Audit Procedures for Large Partnerships

$2,407

 

Revise Offer-in-Compromise Application Rules

$18

 

Make Repeated Failure to File a Felony

$10

 

Facilitate Tax Compliance with Local Jurisdictions

$17

 

Extend Statute of Limitations for Assessment of Overstated Basis and State Adjustments

$856

 

Improve Investigative Disclosure Statute

$10

 

Allow IRS to charge credit and debit card processing fees for certain tax payments

$20

 

Provide IRS with Flexibility to Address Errors

$639

 

Enhance Electronic Filing of Returns

$10

 

Stagger Tax Return Filing Due Dates

$1,630

 

Provide IRS and Treasury with Authority to Regulate All Paid Return Preparers

$427

 

Increase Penalty for Willful or Reckless Conduct by Paid Preparers

$8

Subtotal

$87,574

     

Other Changes and Simplification

   

Modify Adoption Credit to Allow Tribal Determination of Special Needs

-$5

 

Repeal Non-Qualified Preferred Stock Designation

$326

 

Reform Excise Tax Based on Investment Income of Private Foundations

-$53

 

Simplify Arbitrage Investment Restrictions

-$344

 

Simplify Single-Family Mortgage Bond Targeting Requirement

-$97

 

Streamline Private Business Limits on Government Bonds

-$81

 

Repeal Technical Terminations of Partnerships

$224

 

Repeal Anti-Churning Rules of Section 197

-$2,822

 

Repeal Telephone Excise Tax

-$2,052

 

Increase Standard Mileage Rate for Automobile Use by Volunteers

-$476

 

Consolidate Limits for Charitable Contributions and Extend Carryforward Periods for Deductions

-$5,990

 

Provide Relief for Certain Accidental Dual Citizens

-$403

Subtotal

-$11,773

     

One-Time International Tax

   

Deemed Repatriation

$268,129

     

New Fees

   

Reform Inland waterways funding

$1,130

     

Total Revenue Increases

$1,851,843

Total Revenue Decreases

-$304,276

Total Revenue Change

$1,547,567

Source: Office of Management and Budget, U.S. Treasury

 

 

Proposed Revenue for Long-Run Revenue-Neutral Business Tax Reform

President Obama's Fiscal Year 2016 Budget Proposals

     

Proposed Tax Change

Revenue Change, 2016-2025 (Millions of Dollars)

International Reforms

   

Restrict deductions for interest of members of financial reporting groups

$64,126

 

Provide tax incentives for location jobs and business activity in the U.S. Eliminate deduction for costs of new hires overseas

-$247

 

Repeal delay in implementation of worldwide interest allocation

-$12,207

 

Extend Active Financing under Subpart F

-$81,333

 

Extend Look-through Treatment

-$9,733

 

Impose 19 percent minimum tax on foreign earnings

$205,976

 

Impose 14 percent one-time tax on deferred foreign income

*

 

Limit shifting of income through intangible property transfers

$3,072

 

Disallow the deduction for excess non-taxed reinsurance premiums paid to affiliates

$7,388

 

Modify tax rules for dual capacity taxpayers

$10,315

 

Tax gain from sale of partnership interest on look-through basis

$2,974

 

Extend section 338(h)(16) to certain asset acquisitions

$672

 

Remove foreign taxes from a section 902 corporation's foreign tax pool when earnings are eliminated

$317

 

Create new category of subpart F income for transactions involving digital goods or services

$8,706

 

Expand foreign base company sales income to include manufacturing service arrangements

$18,375

 

Amend CFC attribution rules

$3,400

 

Eliminate 30-day grace period before subpart F inclusions

$1,195

 

Restrict use of hybrid arrangements that create stateless income

$1,133

 

Limit the application of exceptions under subpart F for transactions that use reverse hybrid to create stateless income

$1,402

 

Limit the ability of domestic entities to expatriate

$12,754

Subtotal

$238,285

     

Simplification and Tax Changes for Small Businesses

   

Expand and permanently extend increased expensing for small businesses

-$63,845

 

Expand cash accounting for small businesses and establish uniform definition of small businesses

-$14,757

 

Eliminate capital gains taxations on investment in small business stock

-$9,215

 

Increase limitations for deductible new business expenditures and consolidate provisions for start-up and organizational expenditures

-$4,221

 

Expand and simplify tax credit for small employers for non-elective contributions to employee health insurance

-$1,550

Subtotal

-$93,588

     

Incentives for Manufacturing, Research, and Renewable Energy

 

Enhance and make permanent research incentives

-$127,732

 

Extend and modify certain employment tax credits, including those for veterans

-$10,488

 

Modify and make permanent renewable electricity production credit

-$31,452

 

Modify and permanent extend deduction for energy efficient commercial buildings

-$2,672

 

Carbon dioxide investment and sequestration tax credit

-$5,040

 

Additional tax credits for investment in property used in qualifying advanced energy manufacturing project

-$2,103

 

New Manufacturing Communities Tax Credit

-$4,893

 

Tax credit for second generation biofuel production

-$1,223

Subtotal

-$185,603

     

Regional Incentives

   

Modify and extend New Markets Tax Credit

-$10,094

 

Reform and expand Low-Income Housing Tax Credit

-$3,993

Subtotal

-$14,087

     

Incentives for Investment in Infrastructure

   

Provide America Fast Forward Bonds (AFFB) and expand eligible uses

-$258

 

Allow current refundings of state and local government bonds

-$46

 

Repeal $150 million non-hospital bond limitation on 501(c)(3) bonds

-$82

 

Increase limit for qualified highway or surface freight transfer facility bonds

-$1,076

 

Provide new category of bonds for "Qualified Public Infrastructure Bonds"

-$4,834

 

Modify qualified private activity bonds for public education facilities

-$3,434

 

Repeal tax-exempt bond financing of professional sports facilities

$542

 

Research arrangements for purposes of private business use limits

-$16

 

Modify tax-exempt bonds for Indian tribal governments

-$112

 

Exempt foreign pension funds from the application of Foreign Investment in Real Property Tax Act

-$2,390

Subtotal

-$11,706

     

Eliminate Oil, Gas, and Coal Provisions

   

Repeal enhanced oil recovery credit

$0

 

Repeal credit for oil and natural gas produced from marginal wells

$0

 

Repeal expensing of intangible drilling costs

$15,495

 

Repeal deduction for tertiary injectants

$97

 

Repeal exception to passive loss limitation for working interest in oil and gas properties

$185

 

Repeal percentage depletion for oil and natural gas wells

$13,253

 

Repeal domestic manufacturing deduction for oil and natural gas production

$11,904

 

Increase amortization period for independent producers to seven years

$2,876

 

Repeal expensing of exploration and development costs

$694

 

Repeal percentage depletion for hard mineral fossil fuels

$2,450

 

Repeal capital gains treatment for royalties

$547

 

Repeal domestic manufacturing deduction for coal and other hard minerals

$561

 

Treat publicly-traded partnerships for fossil fuels as C corporations

$1,699

Subtotal

$49,761

     

Revenue Increases on from Financial and Insurance Industry Products

   

Require that derivative contracts be marked to market with resulting gain or loss treated as ordinary

$19,796

 

Modify rules that apply to sales of insurance contracts

$502

 

Modify proration rules for life insurance company general and separate accounts

$7,543

 

Expand pro rata interest expense disallowance for corporate owned life-insurance

$6,279

 

Conform net operating loss rules of life insurance companies to those of other corporations

$319

Subtotal

$34,439

     

Other Revenue Increases

   

Repeal LIFO accounting for inventories

$76,092

 

Repeal lower-of-cost-or-market inventory accounting

$7,591

 

Modify like-kind exchange rules for real property

$19,542

 

Modify depreciation rules for general aviation passenger aircraft

$3,538

 

Expand definition of built-in loss for partnership loss transfers

$80

 

Extend partnership basis limitation rules to nondeductible expenditures

$1,051

 

Limit the importation of losses under party loss limitation rules

$945

 

Deny deduction for punitive damages

$455

 

Conform corporate ownership standards

$308

 

Tax corporate distributions as dividends

$940

 

Repeal Federal Insurance Contributions Act tip credit

$12,329

 

Repeal excise tax credit for distilled spirits with flavor and wine additives

$1,093

Subtotal

$123,964

     

Total Revenue Increases

$550,511

Total Revenue Decreases

-$409,046

Total Revenue Change (Net)

$141,465

*The revenue from the deemed repatriation is included in Table 1.

Source: U.S. Treasury

 

 

Categories: Tax news

Senator Bernie Sanders’s New Deal for America

Tax Foundation - Wed, 2015-02-11 10:45

Inspired by Roosevelt’s New Deal in many regards, Senator Bernie Sanders (I-VT) recently outlined his vision for America, featuring expansionary government spending policies. A major federal jobs program, a hike in the minimum wage to at least $15, expansion of Social Security, Medicare, Medicaid, increased regulation of Wall Street, and protectionist trade policies are examples of initiatives Sanders emphasized. However, Sen. Sanders provided little information on how he might finance his vision.

In describing his political manifest before the Brookings Institute audience, Sen. Sanders’s recipe for economic growth and reduced inequality focused predominantly on the spending side of the equation. Moreover, Sanders posited that increased regulation of Wall Street and increasingly protectionist measures in U.S. trade policy would benefit the U.S. economy. For example, Sen. Sanders cited that he opposed NAFTA and similarly is against the Trans-Pacific Partnership (TPP).

To be sure, Sen. Sanders did offer some guidance on mechanisms for raising revenue; however, his clearly outlined spending program was not corroborated by an equally pellucid plan for raising revenue. To fund rising welfare related expenses, Sanders proposed an increase in the payroll tax cap to $250,000. Additionally, the senator from Vermont, providing few details, focused on raising additional tax revenue through the relatively nebulous term “real tax reform,” including more taxes on individuals and corporations with earnings in foreign countries as well as eliminating corporate loopholes in the tax code.

Equality of opportunity is perhaps the most important and fundamental idea underlying a just society—and Sen. Sanders’s ambition to reach that end is commendable—yet his proposals may be shooting himself and the U.S. economy in the foot along the journey of reaching that goal.

Categories: Tax news

Switzerland slides into deficit on surprise 9% revenue fall

Yahoo Tax - Wed, 2015-02-11 09:11

The Swiss government said Wednesday it suffered its first federal budget deficit in nearly a decade last year following a surprise nine percent drop in tax revenue. The deficit of 124 million Swiss francs (118.5 million euros or $133.8 million) was the first since 2005, and was also a surprise as Bern had forecast for 2014 a budget surplus of 121 million francs. Swiss Finance Minister Eveline Widmer-Schlumpf said "we will investigate" the 2.4 billion franc shortfall in revenues. In 2013, Switzerland recorded a federal budget surplus of 1.3 billion Swiss francs.


Categories: Tax news

FBI to probe fake tax filings through TurboTax: WSJ

Yahoo Tax - Tue, 2015-02-10 20:54
(Reuters) - The U.S. Federal Bureau of Investigation is examining how fraudulent tax returns were filed in 19 states through tax-preparation software TurboTax, the Wall Street Journal reported, citing a person with knowledge of the matter. In particular, the FBI is focusing on whether a computer data breach allowed access to personal identity information and whether the information was obtained from TurboTax, developed by Intuit Inc, or some other source, the Journal reported. "Intuit has not been notified, nor are we aware, that we are the target of an FBI investigation," Intuit spokeswoman Julie Miller said in an email to Reuters.
Categories: Tax news

Colorado's 2014 taxes on recreational pot come in at $44M

Yahoo Tax - Tue, 2015-02-10 18:06
DENVER (AP) — Colorado finally learned Tuesday how much tax revenue it collected from recreational marijuana in the first year of sales, and the haul was below estimates — about $44 million.
Categories: Tax news

The Case for "Jobs Day"

Tax Foundation - Tue, 2015-02-10 09:15

I have long maintained a skepticism of the ridiculous “wonk” hobby of obsessing over “Jobs Day.” The first Friday of every month, the Bureau of Labor Statistics releases a report on the employment situation in the country.

I am still skeptical. The cultural phenomenon of "Jobs Day," as practiced by economic journalists - where people obsess over small granular details that are likely to be revised substantially anyway - remains kind of dumb. But since I published my case against "Jobs Day," the economy has improved substantially. There have been three reports published since I last visited the subject, and, honestly, they’re quite a lot better. Over the last three months, the BLS shows a total of 1.009 million jobs added, or about 336,000 per month. Figures for December and January are still only preliminary and may change, but this is very likely to be the single best three-month stretch of my adult life.

My case against compulsive reporting of the nonfarm payrolls number has been twofold: first, that amounts like 190,000 jobs are basically meaningless – they mostly mean that the population grew (as it tends to do) and that the economy remained roughly the same as it always did. And second, that a single month’s worth of data is usually insignificant.

Neither of these critiques applies when we look at the last three months, as a whole. The case for “Jobs Day,” if you will, is that if you group several Jobs Days together, you can start to see meaningful trends. It is unquestionable that the labor market is finally on the rise. 

As of early last November, I wrote this: “It's almost pathetic to see policy journalists parse the report for whether it shows 150,000 or 200,000 jobs this time. We need something more like ten million.”

The general sentiment remains true. But three months later, I’d knock that number back from ten million to nine, and that’s absolutely a difference worth celebrating.

Categories: Tax news

Don't file a 'frivolous' tax return - CNNMoney

Google IRS Federal Income Tax - Tue, 2015-02-10 08:14

Don't file a 'frivolous' tax return
CNNMoney
Among the most common: Filing and paying your taxes is voluntary. Only foreign-source income is taxable. You may refuse to pay your taxes on religious or moral grounds by invoking the First Amendment. And the only people subject to federal income tax ...
Filing 2014 Taxes: What to KnowNBC Bay Area

all 98 news articles »
Categories: Tax news

Wave of Fake Federal and State Tax Returns Filed, Experts Say - CNBC

Google IRS Federal Income Tax - Tue, 2015-02-10 05:21

CNBC

Wave of Fake Federal and State Tax Returns Filed, Experts Say
CNBC
Armed with this stolen information—Social Security number, date of birth, dependents, employer and adjusted gross income—the thieves can file bogus state and federal income tax returns. If they can file before you do and their fake return makes it ...
TurboTax Fraud May Impact Federal Returns Too, FBI InvestigatingForbes
FBI is investigating fraudulent tax returns filed through TurboTaxWashington Post
FBI to Probe Fraudulent Tax FilingsWall Street Journal
CPAPracticeAdvisor.com
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Categories: Tax news
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