Eleventh-hour votes in Congress in December renewed a package of tax extenders for 2014, created new savings accounts for individuals with disabilities, cut the IRS’ budget, and more.
FF&F News & Events
As the 2015 filing season approaches, IRS Commissioner John Koskinen is bracing taxpayers for more reductions in customer service unless the agency receives more funding. According to Koskinen, the IRS is facing its biggest challenge in recent years.
Even though the calendar still says summer, it’s not too early to be thinking about 2013 year-end tax planning. In fact, year-end tax planning has become around-the-year tax planning because of tax legislation (or the lack of tax legislation), new IRS rules and regulations and personal and business considerations.
On May 6, 2013 the Senate passed the Marketplace Fairness Act of 2013 (a.k.a, the Internet Sales Tax Bill by 69-27. Passage in the Senate was considered a major hurdle for taxing Internet sales. The bill, if passed in the House and signed by the President, would enable states to collect from certain online sellers sales and use tax on sales made to customers in the state.
The IRS’s improper handling of applications for tax-exempt status from conservative groups has led to the removal of top officials, the appointment of a new Acting Commissioner, a 30-day top-down review of the agency’s operations, Congressional hearings, and a criminal investigation.
President Obama recently said that he wants a tax reform/deficit reduction package by August and lawmakers have many proposals to consider. The President has introduced a $3.77 billion budget for fiscal year (FY) 2014 with a host of tax reform proposals, the House and Senate Budget Committees have approved competing deficit reduction and tax reform blueprints, other committees are exploring ideas for tax reform, and private groups, most notably authors of the Simpson-Bowles Plan, are also making proposals
Many small business benefits incorporated into the Tax Code are complicated and, arguably, in need of reform. House Ways and Means Committee chair Dave Camp, R-Mich., recently released a draft proposal containing numerous tax reform measures specifically designed to simplify taxation of small businesses and partnerships.
On January 2, 2013 President Obama signed into law the American Taxpayer Relief Act of 2012. While the new law increases the top marginal income tax rate for individuals earning up to $400,000 (up to $450,000 for joint filers) to 39.6%, it allowed the United States to avoid going over the so called “fiscal cliff” which would have required across-the-board increases to all tax brackets and mandatory spending cuts.
All eyes are on Washington as the White House and the GOP seek to avoid the so-called “fiscal cliff” before the end of the year. President Obama and House Republicans are negotiating the fate of the Bush-era tax cuts, mandatory spending cuts and more in the last weeks of 2012 and negotiations are expected to go right up to the end of the year. At the same time, the IRS has cautioned that the start of the 2013 filing season could be delayed for many taxpayers because of late tax legislation.