Archives for Taxes

Patient Protection and Affordable Care Act (PPACA)

Patiently waiting, the PPACA has now passed muster with the Supreme Court.  Only 2 provisions were changed. The provision on penalty for PPACA for the individual mandate (all individuals must have health insurance) is now called a “tax” under Congress’s power to levy taxes.  Also states that opt out of Medicaid provisions, may not be mandated to follow-thru on the mandated Medicaid rules.  In essence, if these states don’t want to burden of administering the
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2011 Year End Tax Planning

This first article is entitles Part I because of uncertainty regarding some key developments that may or may not pass: Obama’s payroll tax cut extension and the Republican counterweight, odds are both are dead in the water and some pieces of it may pass possibly by year end. Longer term tax planning is especially challenging this year because of uncertainty over whether Congress will enact sweeping tax reform that could have a major impact in
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Obama Potential Tax Hikes after 2012

Five Types of Obama Tax Hikes President Obama’s unnecessary tax hikes break down into five categories: 1. Repeal of the 2001 and 2003 Tax Cuts for Upper-Income Families. President Obama reached an agreement with Congress in late 2010 to extend all 2001 and 2003 tax cuts for two more years, through 2012. After praising that agreement immediately after its passage, the President changed quickly back to his long-held preference of allowing those tax cuts to
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Obama Tax Compromise through 2012

The tax compromise extending Bush-era tax cuts has now been signed into law. It has cleared up some uncertainty concerning tax rates and deductions that made tax planning problematic for both this year and next. At the least, we hope the compromise brings certainty through 2012. The following main points summarize the compromise:
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Small Business Jobs Act 2010

Highlights of Small Business Jobs Act 2010 HR 5297 signed on 9/27/2010 1) Bonus depreciation extended to 12/31/2010.   Bonus depreciation is 50% depreciation on new equipment acquired. No taxable income or equipment total restrictions 2) Section 179 expensing up to $250,000 thru 12/31/2011.  Was scheduled to revert back to $125,000. 3) Auto depreciation for new passenger cars now up to $11,060 for 2010. 4) S corp built in gain period for conversion of C corp to S
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IRS notices – CP 2000

Recently I’ve been helping clients with CP 2000 notices. Many people get panicked when they get this notice. Many times the IRS assumes the worst when they send this notice. What is a CP 2000 notice, basically the IRS received a 1099 indicating that the taxpayer is missing income.  For example , the IRS received a 1099 from Bank of America indicating you were paid $1,000 to your CD.  Most people I meet, never really
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Congress extends Medicaid and education funding at expense of multinational corporations

Just read an excellent update on the new bill that passed on 8/10/2010 in the House, still subject to Senate vote.  Quick summary: Medicaid / Education funding for states passed Continual erosion of ability to get foreign tax credits for multinationals or even taxpayers with multiple foreign corps.  Foreign tax credits prevent the double taxation of US and foreign taxes.  For example if your US corp owns a UK corp, that US corp may have
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IRS on the auditing warpath

See this article on IRS increasing audits of small to medium sized businesses by 30%.  We are seeing this in my practice and in talks with other practioners.  My opinion on this is that the IRS can get easier dollars by targeting small businesses rather than large ones with less resources, even though per dollar-wise, it still makes sense for the IRS to go after the Fortune 1000s.  Of course this is bad news for
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Celebrities with tax problems

Many average Americans have tax problems – tax liens, judgments, filing issues.  Well, the well heeled and famous also do too and many times they get the star treatment. Nicolas Cage – owes $6.3MM in back  taxes from 2002-2004 and 2007.  He is suing his business manager for taking extravagant tax deductions and not being told about it. Wesley Snipes – owes $17MM and has been found guilty of defrauding the government.  His tax advisors
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IRS New Changes 2010

After a very interesting discussion with the IRS liason recently here in Pasadena.  There are some interesting changes in store for tax professionals and the unsuspecting public: 1) Tax professionals and their unlicensed staff must either re-register (get a PTIN) or register with the IRS. Registration entails getting education (CE).  IRS wants to license all tax professionals.  No word yet on foreign tax professionals.  Wonder how Ernst & Young will cope since many of its
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