Category: Taxes
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Outside sales representatives hit by a tax increase January 2018
If you are an employee with large unreimbursed business expenses then you either need to ask for a raise immediately of prepare for a potentially large tax increase. One of the most common types of occupations affected is outside sales representative however any employee in any occupation with work-related expenses would be affected the same way.…
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Legislative History as Tax Authority: an Obsolete Concept?
Early in my professional tax career I learned about the concept of legislative history as tax authority. In fact a large part of any legal education is learning to evaluate evidence based on its qualitative characteristics, statutory consideration or local rules. In tax law this hierarchy of authority becomes the logical and legally supportable basis that…
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Terminology of Federal Income Taxes
Lately we’ve heard plenty of discussion about tax law. It seems especially common right now when tax terms have come up multiple times in casual conversation this past week at coffee, family dinner and email from a client. In some cases the terms are misused or misunderstood. Like many types of discussion, meaningful communication depends…
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The Tax Organizer Fallacy
This is the time of the year when tax preparers sent their clients “Tax Organizers” with a note saying this is necessary to properly prepare your tax return. The Tax Organizer presumably makes the tax preparation process go more smoothly and minimizes omissions. The organizer is a multi-page document that can take hours to complete.…
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All taxes are political: Where we stand today with tax reform fallout
Here’s an update in bullet point format: Strong public opposition – It is clear from multiple sources now that the majority of Americans are opposed to the new tax law on the basis that it borrows from our future through massive deficit spending immediately. When the temporary tax cut expires our taxes are expected to…
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Tax Simplification
We have read about tax simplification and post card tax returns for many months, but that is not the reality with the new tax law known as the Tax Cut and Jobs Act. Our federal income tax law and income tax calculation process is more complicated than ever before. The new tax law keeps almost…
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When business expenses are not deductible
A general principle of tax accounting is that we deduct ordinary and necessary business expenses from our gross income before reporting the net taxable income. However, this is not always the case. In some cases it is necessary to modify your tax accounting to comply with specific tax laws – even sometimes when the tax…
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2018 tax rates for married filing jointly
While most taxpayers get a decrease in marginal tax rates some small group of ‘married filing jointly‘ taxpayers will face higher marginal tax rates. This means that a married taxpayer with taxable income of $237,951 to $315,000 will see slightly less of a tax cut as a percentage of income compared to married taxpayers in other…
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The three basic principles of individual tax reform
The tax reform bill, as passed, does three key things for individual taxpayers: Temporarily changes the way we calculate “taxable income”. No longer do we calculate personal exemptions. Most deductions are eliminated. The standard deduction is increased. To estimate the impact on your taxes subtract the total amount of your current deductions and personal exemptions…
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First five strategies to deal with the new tax law
My action plan for bringing actionable information to clients as soon as the tax bill becomes law. Update December 31, 2017: Major parts of the law become effective tomorrow. I’ve moved past most of the preliminary points in this article and am now focused on the actions that can make the most immediate impact on…