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Italy to present new economic, public finance goals on Tuesday

Yahoo Tax - Mon, 2014-04-07 09:46
By Giuseppe Fonte and Gavin Jones ROME (Reuters) - Italy will set new targets for the economy and public finances on Tuesday when the cabinet approves a multi-year plan for presentation to the European Commission, the prime minister's office said. Premier Matteo Renzi said last week that the Financial and Economic Document (DEF) will cut this year's economic growth forecast to 0.8 or 0.9 percent, from the 1.1 percent projection made by the previous government of Enrico Letta. The budget deficit target may be revised up slightly to around 2.6 percent of gross domestic product from 2.5 percent, government sources have told Reuters, but will remain well below the European Union's 3 percent ceiling. The plan should also give some indication of how the government will manage to fund around 10 billion euros of income tax cuts which Renzi has promised will take effect from May, and which will lower government revenues by around 7 billion euros this year.
Categories: Tax news

Time running out to file 2013 tax returns - Las Cruces Sun-News

Google IRS Federal Income Tax - Sun, 2014-04-06 14:51

Merced Sun-Star

Time running out to file 2013 tax returns
Las Cruces Sun-News
The IRS reported recently that, in New Mexico, about 7,200 taxpayers did not file a 2010 federal income tax return, potentially leaving $5.9 million uncollected. You have three years to file your return and receive a refund, so if the government owes ...
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CoinDesk -Insurance News Net (press release)
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Categories: Tax news

French government faces growing unrest from party ranks

Yahoo Tax - Sun, 2014-04-06 05:18

France's newly reshuffled Socialist government faces growing unrest from within its own party and from former coalition allies the Greens ahead of a confidence vote on Tuesday which will test France's ability to push ahead on reforms. President Francois Hollande, whose administration has failed to lower stubbornly high unemployment in Europe's second-biggest economy after two years in power, is staking his credibility on a "responsibility pact" to cut companies' payroll taxes if they boost hiring in return. New Prime Minister Manuel Valls, who was put in charge after Socialists suffered a rout in local elections last week, has been tasked with helming the reform despite resistance from the Left and after the Greens declined posts in his government in protest at his centrist stances. "The local elections were a rebuke of (the current) economic policy and the ruling majority's disarray," Socialist deputy Pouria Amirshahi said.


Categories: Tax news

Federal Strategy for Regulation of Bitcoins Revealed in IRS Guidance - Law.com

Google IRS Federal Income Tax - Sun, 2014-04-06 05:00

WantChinaTimes

Federal Strategy for Regulation of Bitcoins Revealed in IRS Guidance
Law.com
Those employees paid with bitcoins must determine the fair market value of the bitcoins and that amount is subject to federal income tax withholding, FICA and FUTA taxes, with W-2 reporting. The IRS also requires reporting of a bitcoin payment to a ...
Bitcoin Regulation Roundup: Rumours, Court Cases and Taxing TimesCoinDesk

all 13 news articles »
Categories: Tax news

Meet the IRS's new go-to go-getter - Washington Post

Google IRS Federal Income Tax - Sat, 2014-04-05 20:32

Washington Post

Meet the IRS's new go-to go-getter
Washington Post
If you can afford to pay for health care under the act but choose to go without coverage, you'll have to pay a penalty when you file your federal income tax return. But the IRS has an even bigger role than collecting penalty payments. Under the ACA ...
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IRS Extends Income Tax Filing for Washington Mudslide Victims - CPA Practice Advisor

Google IRS Federal Income Tax - Fri, 2014-04-04 08:31

Washington Post

IRS Extends Income Tax Filing for Washington Mudslide Victims
CPA Practice Advisor
The Internal Revenue Service has automatically extended the tax return filing and payment deadlines for victims of last month's mudslides and flooding in Washington state. As a result, those taxpayers will have until Oct. 15 to file their returns and ...
IRS has almost $2.5M for Rhode Island taxpayersCranston Herald
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Categories: Tax news

Senate Finance Committee Passes $85 Billion Tax Extenders Bill

Tax Foundation - Fri, 2014-04-04 08:15

The Senate Finance Committee passed a tax extenders package that includes extensions of two years or longer on over 50 provisions totaling $85.3 billion.

The package contains provisions dealing with individuals and businesses, as well as many targeted at the renewable energy industry. Some of the largest include $15.4 billion for the research and development tax credit, $13.35 billion for section 45 and 48 renewable energy, $10.4 billion for active financing, and $6.4 billion for the state and local general sales tax deduction. 

The originally proposed package – the Chairman’s Mark – was released on Tuesday and included a two year extension on 45 provisions totaling $67.4 billion.

The final bill passed by the committee contained multiple modifications and additions as well as three revenue raising provisions, extending almost all the provisions in current law for 2013. In total, these changes added an additional $17.9 billion to the bill.

We’ve written in the past that not all tax extenders are worth extending, and that still holds true. Ideally, the tax code would be neutral and only include provisions that help mitigate the biases in the current tax code against saving and investment. This includes provisions that deal with cost recovery, such as the small business expensing provision and bonus depreciation. These provisions help move us closer to correctly defined business income.

See the table below for a list of the provisions include in the bill passed by the Senate Finance Committee.

2014 Tax Extenders Proposed by Senate Finance Committee

Source: Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act

Note: Some provisions extended for two years; others extended permanently. See here for list.

     

Individual Provisions

In Millions

 

Deduction for expenses of elementary and secondary school teachers

$430

 

Mortgage Debt Relief

$5,400

 

Parity for employer-provided mass transit and parking benefits

$180

 

Deduction for mortgage interest premiums

$1,800

 

Deduction for state and local general sales taxes

$6,500

 

Above-the-line deduction for higher education expenses

$596

 

Tax-free distributions from individual retirement plan for charitable purposes

$1,800

 

Special rules for contributions of capital gain real property made for conservation purposes

$268

 

Subtotal

$16,974

     

Business Provisions

   

Research and experimentation tax credit

$15,400

 

4% Credit Rate Freeze for the Low-Income Housing Tax Credit Program

$49

 

Treatment of military basic housing allowances under low-income housing credit

$49

 

Indian employment tax credit

$124

 

New Markets Tax Credit

$1,800

 

Credit for railroad track maintenance

$414

 

Mine rescue team training credit

$5

 

Employer wage credit for activated military reservists

$274

 

Work Opportunity Tax Credit

$3,160

 

Qualified zone academy bonds (QZABs)

$284

 

Three-year depreciation for racehorses

$9

 

15-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements

$4,800

 

Accelerated depreciation for business property on Indian reservation

$158

 

Enhanced charitable deduction for contributions of food inventory

$292

 

Bonus depreciation

$2,850

 

Acceleration of AMT credits in lieu of bonus depreciation

$602

 

Temporarily extend increase in the maximum amount and phase-out threshold under section 179

$3,100

 

Election to expense advanced mine safety equipment

**

 

Deduction for domestic production activities in Puerto Rico

$222

 

Modification of tax treatment of certain payments to controlling exempt organizations

$36

 

Treatment of certain dividends of regulated investment companies (RIC's)

$198

 

Definition of RICs as qualified investment entities under FIRPTA

$93

 

Exceptions under subpart F for active financing income

$10,400

 

Special rules for qualified small business stock

$1,950

 

Basis adjustment to stock of S corporations making charitable contributions of property

$104

 

Reduction in S corporation recognition period for built-in gains tax

$232

 

Temporary increase in limit on cover over of rum excise tax revenues (from $10.50 to $13.25 per proof gallon) to Puerto Rico and the Virgin Islands

$336

 

American Samoa economic development credit

$29

 

Multiemployer Pension Plan Funding Rules

**

 

7-year recovery period for motorsports entertainment complexes

$71

 

Special rules for certain film and television productions

$27

 

Look-through treatment

$2,450

 

Subtotal

$49,518

     

Energy Provisions

   

Plug-in Electric Motorcycles and Highway Vehicles

$2

 

Credit for alternative fuel vehicle refueling property (including hydrogen property)

$89

 

Cellulosic Biofuels Producer Tax Credit

$55

 

Incentives for biodiesel and renewable diesel

$2,600

 

Indian country coal production tax credit

$76

 

Credit for construction of new energy efficient homes

$612

 

Cellulosic Biofuels Bonus Depreciation

$1

 

Incentives for alternative fuel and alternative fuel mixtures (including liquefied hydrogen)

$903

 

Credit for fuel cell motor vehicles

$47

 

Credit for nonbusiness energy property

$1,650

 

Section 45 and 48 renewables

$13,350

 

Energy efficient commercial buildings deduction

$304

 

Subtotal

$19,689

     

Revenue Raisers

   

Extend paid preparer EIC due diligence requirements to the child tax credit

-$43

 

Increase levy authority on payments to Medicare providers with delinquent tax debt

-$818

 

 Exclusion from gross income of certain clean coal power grants

-$4

 

Subtotal

-$865

     

Total

$85,316

**Estimate pending or no revenue impact.

 

Update: This post was updated to reflect the fact that some provisions are extended for two years, while others are extended permanently.

Categories: Tax news

IRS Alleges Iconic Pizza Shops Offered Up Slices, Hold The Taxes - Forbes

Google IRS Federal Income Tax - Thu, 2014-04-03 19:42

Philly.com

IRS Alleges Iconic Pizza Shops Offered Up Slices, Hold The Taxes
Forbes
Today, Charles and Mary Bangle appeared in a federal court in Camden, New Jersey, to face charges of conspiracy to evade income taxes, income tax evasion, and making false statements to the IRS. Charles Bangle was also charged with multiple counts of ...
Shore's Manco & Manco owners charged with tax evasionPhilly.com
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Categories: Tax news

Missouri Senate Passes Problematic Income Tax Cut Plan

Tax Foundation - Thu, 2014-04-03 13:15

Missouri’s state Senate this week passed a $621 million tax cut including a 0.5 percentage point income tax reduction and a special carveout to deduct up to 25 percent of business income. We recently wrote about tax cut proposals passed by the Missouri House of Representatives, critiquing them (much like last year’s proposals) as offering only marginal improvements in income tax rates while relying heavily on special carve-outs with few economic benefits.  These plans do not tackle the major structural issues in Missouri’s income tax code such as its numerous income tax brackets which lack any inflation-adjustment mechanism.

This plan is quite similar to the house plans, although it does not lower the individual income tax by as much as HB 1295 would have, and does include inflation-indexing. As such, it represents an even more incremental, marginal change. Our previous commentary applies as much to it as to other proposals, namely, that these bills don’t get at the real problem of numerous complex tax brackets in Missouri’s individual income tax, phase in at a glacial pace, and include large, distortionary carve-outs for business income.

As we suggested last year, Missouri might be better off eliminating everything but the top rate, since most taxpayers are probably in the top bracket anywhere. Such a plan would simplify and flatten the tax code, give a tax cut to every taxpayer, and avoid any criticism of regressivity.

Below is the proposed schedule of individual income tax rate reductions if revenue thresholds are met:

Bracket

Current Tax System (2014-2016)

 Proposed 2017

2018

2019

2020

2021

>$0

1.5%

1.5%

1.5%

1.5%

1.5%

1.5%

>$1,000

2.0%

2.0%

2.0%

2.0%

2.0%

2.0%

>$2,000

2.5%

2.5%

2.5%

2.5%

2.5%

2.5%

>$3,000

3.0%

3.0%

3.0%

3.0%

3.0%

3.0%

>$4,000

3.5%

3.5%

3.5%

3.5%

3.5%

3.5%

>$5,000

4.0%

4.0%

4.0%

4.0%

4.0%

4.0%

>$6,000

4.5%

4.5%

4.5%

4.5%

4.5%

4.5%

>$7,000

5.0%

5.0%

5.0%

5.0%

5.0%

5.0%

>$8,000

5.5%

5.5%

5.5%

5.5%

5.5%

5.5%

>$9,000

6.0%

5.9%

5.8%

5.7%

5.6%

Full text of the bill and legislative information can be found here.

Read more on Missouri here.

Follow Lyman on Twitter.

Categories: Tax news

Don't Forget Your Child's Investment Income this Tax Season - Fox Business

Google IRS Federal Income Tax - Thu, 2014-04-03 11:11

Investopedia

Don't Forget Your Child's Investment Income this Tax Season
Fox Business
However, if the total interest and dividend income is less than $10,000 in 2013, parents can elect to report the income on their own tax return using IRS Form 8814 rather than filing a separate income tax return for the child. Other qualifiers for ...
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Categories: Tax news

CBPP Calls for a Lower Corporate Income Tax Rate to Increase Employment

Tax Foundation - Thu, 2014-04-03 11:00

Decrying its effects on the U.S. manufacturing industry, Susan Houseman writing for the Center on Budget and Policy Priorities’ “Full Employment” initiative has called for a reduction in the United States’ high corporate income tax rate:

“High U.S. statutory corporate income tax rates, which in the top bracket are 39 percent when federal and state taxes are combined, also have dampened job growth in the United States. While the income tax rates companies actually pay can be considerably lower, among manufacturing firms in recent years the average effective tax rate for those headquartered in the United States was 26 percent, one of the highest in the world and 11 percentage points higher than the average effective rate for manufacturers headquartered in tax havens. In response to such differences, some American companies have moved their corporate headquarters overseas. Moreover, relatively high marginal U.S. corporate tax rates give multinational companies a strong incentive to hold or reinvest their foreign earnings overseas. Significantly lowering corporate income taxes in a revenue-neutral way by eliminating deductions and simplifying the tax code enjoys broad bipartisan support. While such reform is not specific to manufacturing, it is important to revitalizing the sector.”

We agree: the rate should be lower. The 39.1 percent combined corporate income tax rate puts U.S. corporations (manufacturers or not) at a competitive disadvantage. Corporations headquartered in the 33 other industrialized countries face an average rate of 25 percent. Lowering the U.S. corporate income tax rate would improve the competitiveness of all U.S. corporations, reduce the cost of capital, and lead to higher level of employment, as CBPP argues.

All that being said, we should be careful about “revenue neutral” corporate tax reform. Even if we lower the corporate rate and pay for it by eliminating deductions we may end up hurting the economy. This is especially true for manufacturers if the government lengthens asset lives, as some recent tax reform plans have suggested. Manufacturing is a capital intensive industry and lengthening assets lives and moving farther from full expensing will harm their competitiveness even with a lower corporate tax rate.

Categories: Tax news

Chileans split on whether Bachelet can clinch social reforms

Yahoo Tax - Thu, 2014-04-03 10:47

Chileans are split on whether center-left president Michelle Bachelet will deliver on her three flagship proposals for tax, education and constitutional reforms, a poll showed on Thursday. Bachelet took office last month, vowing to tackle the Andean country's steep income inequality by hiking corporate taxes, "working towards" free education and shredding the dictatorship-era constitution. Around 40 percent of Chileans believe she will deliver on these promises, 20 percent think she will fail and the remaining 40 percent have doubts or declined to answer, pollster Adimark said in its report.


Categories: Tax news

Tax Q&A: Are Social Security benefits taxable? - USA TODAY

Google IRS Federal Income Tax - Thu, 2014-04-03 08:04

Tax Q&A: Are Social Security benefits taxable?
USA TODAY
A: According to the IRS website, generally, if Social Security benefits were your only income, your benefits are not taxable and you probably do not need to file a federal income tax return. IRS Topic 423, "Social Security and Equivalent Railroad ...

and more »
Categories: Tax news

3 Charged in Federal Income Tax Refund Scheme - KARK

Google IRS Federal Income Tax - Wed, 2014-04-02 18:18

KARK

3 Charged in Federal Income Tax Refund Scheme
KARK
The indictment alleges that beginning in or about January 2010 through February 2011, the defendants participated in a scheme to obtain payment of federal income tax refunds from the Internal Revenue Service (“IRS”) by using unemployed individuals' ...

and more »
Categories: Tax news

This Tax Season: Chaos for Same-Sex Couples - The Atlantic

Google IRS Federal Income Tax - Wed, 2014-04-02 14:51

This Tax Season: Chaos for Same-Sex Couples
The Atlantic
Usually, states piggyback off of the IRS on tax returns—people fill out their federal returns and then use that information to fill out state returns. But since many non-recognition states aren't following the IRS's decision to accept joint returns ...

and more »
Categories: Tax news

U.S. gives foreign banks more time on anti-tax dodge law

Yahoo Tax - Wed, 2014-04-02 14:45

By Patrick Temple-West WASHINGTON (Reuters) - The U.S. Treasury Department on Wednesday gave foreign financial institutions 10 extra days to register with the U.S. government, under a new law to combat offshore tax dodging by Americans that goes into effect on July 1. Under the Foreign Account Tax Compliance Act (FATCA), foreign banks, insurers and investment funds must send the Internal Revenue Service information about Americans' and U.S. permanent residents' offshore accounts worth more than $50,000. In addition to extending registration to May 5 from April 25, the Treasury Department said more countries are now FATCA compliant, alleviating worries for financial firms in Brazil, South Korea and South Africa, among other countries. Countries that have FATCA agreements "in substance" with the United States will be seen as complying with the law, even if the agreements are not finalized by December 31, 2014, Treasury said.


Categories: Tax news

Japan Raises Sales Tax Rate

Tax Foundation - Wed, 2014-04-02 12:15

Japan raised its sales tax from 5 percent to 8 percent effective yesterday, April 1st. The rate is set to increase, again, to 10 percent in October of 2015.

The last time the Japanese increased their sales tax rate in 1997 from 3 percent to 5 percent, the economy entered a deep recession.

On the heels of the tax increase, the Bank of Japan released the results of its tankan survey, which measures businesses sentiments on the economy, and showed that companies expect spending to slump following the tax hike.

Japanese firms expect to increase capital spending by only 0.1 percent in the new financial year, which started this month. This points to the larger issue: not Japan’s increasing sales tax rate, but its high corporate tax rate. High corporate tax rates depress investment, which slows economic growth.

Previous discussions in Japan involved an increase in the sales tax in exchange for a lower corporate tax rate, which is currently the second highest in the world behind the U.S. at 37 percent.

Whether or not sales tax-corporate tax rate tradeoff materializes, the sales tax increase to 8 and then 10 percent marks a shift towards consumption taxes as a means to raise revenue.

This is in line with countries from across the developed world that have been making a shift towards consumption based taxes and away from income taxes. Many of these countries have relatively large governments and sales taxes, such as value added taxes (VATs), are less economically distortive ways to raise revenues than reliance on an income tax.

Over the last 30 years, many developed countries have reduced their corporate income taxes, while relying more heavily on consumption taxes, such as the VAT.

While a VAT is not likely, and for many reason is not desirable, in the U.S., taking steps to shift away from income taxes on businesses and individuals and towards neutral and pro-growth tax policy would be a good change for the U.S. and Japan.

Categories: Tax news

United Kingdom Has Cut Taxes for Many with a Larger Personal Allowance

Tax Foundation - Wed, 2014-04-02 12:15

Starting next week (the beginning of the 2014-2015 tax year), the United Kingdom’s personal allowance (equivalent to the United States’ personal exemption) will increase to £10,000 from £9,440.

According to the Economic Times, this is a substantial tax cut for many low-income UK taxpayers:

“The increases in the tax-free personal allowance to £10,000 pounds in 2014-15 means that overnight on Sunday, an extra 200,000 people will no longer pay income tax.

“Over 26 million people - the vast majority of working people - will have benefited from the personal allowance increases over the past four years.”

For a comparison, the United States’ personal exemption is $3,950. However we also have a standard deduction for individuals equal to $6,200.

The personal allowance will increase again to £10,500 the following year.

However, this isn’t the whole story. Many people will be seeing a corresponding tax increase. From the Guardian:

“The biggest impact will be felt by those earning £42,000, who from next month will find themselves higher rate tax payers, and will be required to declare any extra income such as interest on savings, overtime, or share dividends – and pay 40% income tax on those earnings.

“Since the coalition took office four years ago, ‘fiscal drag’ means the higher-rate threshold has dropped by £4,910 in real terms, putting an extra 1.4 million people into the 40% bracket.”

In other words, taxpayers in the United Kingdom have been experiencing bracket creep. This is the phenomenon by which people are pushed into higher income tax brackets due to inflation instead of any increase in real income. Even though taxpayers that make around £42,000 also benefit from the personal allowance increase, the jump into the 40 percent bracket will reverse some of those benefits. Nonetheless, they will still see a slight tax cut.

 

Categories: Tax news

Bankruptcy judge OK's $120 million loan for Detroit

Yahoo Tax - Wed, 2014-04-02 12:13

(Reuters) - A U.S. bankruptcy judge on Wednesday approved Detroit's plan to borrow $120 million from Barclays PLC to improve services in the cash-strapped city. Judge Steven Rhodes, who is overseeing Detroit's historic bankruptcy case, overruled objections by city creditors who took issue with the timing and structure of the loan. Detroit has said it plans to use some of the loan proceeds on public safety improvements. The previous loan, backed largely by city casino tax revenue, included $165 million that Detroit wanted to use to pay two investment banks to end soured interest rate swap agreements that contributed to the city's filing of the biggest municipal bankruptcy in U.S. history in July.


Categories: Tax news

Don't Panic: 5 Tips for Stress-Free Last-Minute Tax Returns - DailyFinance

Google IRS Federal Income Tax - Wed, 2014-04-02 11:16

Washington Post

Don't Panic: 5 Tips for Stress-Free Last-Minute Tax Returns
DailyFinance
If you need more time to pay your federal income taxes, you can request a payment agreement with the IRS. Use the IRS Online Payment Agreement Application tool or file Form 9465, Installment Agreement Request. No man is an island, or even a peninsula, ...
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