By topic: Budget (Federal)

How to Deal with the New $142,800 Base for Self-Employment Taxes

In 1935, the self-employment tax topped out at $60. In 2021, the first part of the self-employment tax tops out at $21,848, but the 2.9 percent Medicare part continues after that without limits. Good tax planning for the self-employment tax is like an annuity: it gives you monetary returns—year after year—every year you are in business. So, plan now and consider everything from choice of entity to hiring your children.

Lawmakers Extend the Tax Extenders with the COVID-19 Relief Law

The Taxpayer Certainty and Disaster Tax Relief Act of 2020 deals with the annual tax extenders. Congress made some of them permanent, while others got short- or long-term extensions. We’ll go through each and tell you how it fared in the legislation.

IRS Uses UBS Swiss Bank Account to Nail California Man with Tax Fraud

Swiss UBS AG and other supposed tax havens and secret banks are divulging the names of tax cheats to the U.S. government.

Federal Income Tax Rates to Increase?

Federal Reserve Board Chair Ben Bernanke told a House Budget Committee to address the government’s long-term fiscal shortfall with higher tax rates that do not impede economic growth.

More 1099s, Audits, and Enforcement

Treasury Secretary Timothy Geithner told the Senate Finance Committee that more 1099 reporting and IRS audits provide the solution to the tax gap.

Big Budget Deficit

The Congressional Budget Office estimates that this year’s federal budget deficit will top last year’s by more than 250 percent.

Bailout for Incentive Stock Options

After buying stock with incentive options, many choose to gamble with the capital gains treatment. By holding on to the stock for one year, one can save money with the AMT. But, when the dot-com bubble burst, many people lost a lot of money with this gamble. Read about this, and how the government is now bailing them out!

Preferred Stock Bailout for Banks and Other Financial Institutions

The big $700 billion bailout is right in your face, but there’s more. There are also billions of dollars in side bailouts, including the preferred stock bailout, which helps out owners of preferred Fannie and Freddie stock. Only some financial institutions benefit though, you don’t.

Tax Cheats Steal $58 Billion of Your Money

Over 1.6 million businesses collectively owe the IRS more than $58 billion. Who to blame: cheating government contractors, a lenient IRS, irresponsible lawmakers, dishonest businesses. What to do, and how to protect yourself against a dishonest payroll service.

No Extension for Extenders

Extenders delay the expiration of a tax law for one year, effectively hiding huge amounts of government spending. Currently, the government is hiding almost $100 billion of spending with extenders. Learn about how they effect small business, and what you can do to stop this type of spending.

Rangel to Pay Back Taxes

NY Congressman Charles Rangel failed to report foreign earnings. Rangel is the chief tax legislator in the country. He should know better.

Cut Your Taxes by 32.1 Percent by Making Cheaters Pay Taxes

Not all taxpayers have been paying their taxes, which costs each person $2,000. We show you why this happens, and how you can help.

AMT More Likely to Hurt You in 2008

In upcoming years, taxpayers with cash income greater than $50,000 are more likely to pay the AMT than taxpayers with cash income of $1 million or more. Fixing this will require a large tax package.

 

GAO Tells Senate: “Fiscal Outlook Is Bleak and Action Is Needed to Avoid Serious Economic Disruption”

In testimony before the Senate on January 29, 2008, the Government Accountability Office (GAO) said: “Under any plausible scenario, the federal budget is on an imprudent and unsustainable path. This budget imbalance will necessarily result in tax increases and spending cuts. (And all this is before Treasury Secretary Paulson’s first $700 billion bank bailout.)

 

AMT Patched, Mortgaged

In what is becoming an every year outrageous event, lawmakers patched the alternative minimum tax (AMT), adding $50 billion to the federal deficit.

 

Peanuts for Mortgage Relief

Despite the new law’s press, the Mortgage Forgiveness Debt Relief Act of 2007 only offers relief to a limited number of qualified homes.

 

Lawmakers Increase Penalties

To pay for the “Heroes Earnings Assistance and Relief Tax Act of 2007,” lawmakers increased the minimum penalties for failing to file a tax return.

 

Fiscal Lunacy Award #19

The federal budget is understated because it does not include amounts for tax extenders—tax laws that are scheduled to expire, but that will not expire because they will be extended. Yes, it’s lunacy.

Fiscal Lunacy Award #9

By using outside collection firms instead of IRS personal, the government is going to lose $8.6 billion a year in revenue.

Fiscal Lunacy Award #17

Government whacks 157 estate tax lawyers at a cost to taxpayers of $2.6 million a day.

New Law’s $70 Billion in Tax Cuts Requires Little Planning

For most self-employed taxpayers, Public Law 109-222 requires no major shifts in tax planning for their businesses. This new law extended tax breaks, such as the lower rates for capital gains. The increase in the kiddie tax age group is probably the biggest impact of this new law on the one-owner and husband-and-wife owned business—and that age expansion has little or nothing to do with most business deductions.

Corporate Reimbursement of Depreciation on an Office in the Home

The corporate reimbursement to you, the employee, for the business use of your home office requires that you recognize the depreciation component of the reimbursement as if you had claimed the office in the home on your personal tax return.

Beware of Tax Reform

Tax reform always sounds great. For example, the 1986 Tax Reform Act dropped the top tax rate from 50 percent to 28 percent. That sounded great. But this tax reform also reduced the after-tax rate of return on a real estate investment by 60 percent. If you were making a 20 percent return on your rental before the reform, you were making 8 percent afterwards. Students of this tax law sold their properties before the nonstudents heard about this cut in profits.