by NFS | Jan 26, 2011 | Archives
WASHINGTON DC – President Obama urged Congress to work across party lines on an overhaul of both corporate and individual taxes to reduce tax loopholes during his State of the Union address on Tuesday night.
“Over the years, a parade of lobbyists has rigged the tax code to benefit particular companies and industries,” he said. “Those with accountants or lawyers to work the system can end up paying no taxes at all. But all the rest are hit with one of the highest corporate tax rates in the world. It makes no sense, and it has to change. So tonight, I’m asking Democrats and Republicans to simplify the system. Get rid of the loopholes. Level the playing field. And use the savings to lower the corporate tax rate for the first time in 25 years—without adding to our deficit.”
Obama also called for simplifying the individual tax code. “In fact, the best thing we could do on taxes for all Americans is to simplify the individual tax code,” he said. “This will be a tough job, but members of both parties have expressed interest in doing this, and I am prepared to join them.”
Obama cited some of the progress made in the past year on taxes during his hour-long speech, including the budget deal he worked out last month to extend the Bush-era tax cuts. “Thanks to the tax cuts we passed, Americans’ paychecks are a little bigger today,” he said. “Every business can write off the full cost of the new investments they make this year. These steps, taken by Democrats and Republicans, will grow the economy and add to the more than one million private sector jobs created last year.”
However, Obama cautioned that the tax cuts extension should not be made permanent for the wealthy in order to deal with the growing budget deficit. “And if we truly care about our deficit, we simply cannot afford a permanent extension of the tax cuts for the wealthiest 2 percent of Americans,” he said. “Before we take money away from our schools, or scholarships away from our students, we should ask millionaires to give up their tax break. It’s not a matter of punishing their success. It’s about promoting America’s success.”
However, Obama did call for making the tuition tax credit permanent. “To compete, higher education must be within reach of every American,” he said. “That’s why we’ve ended the unwarranted taxpayer subsidies that went to banks, and used the savings to make college affordable for millions of students. And this year, I ask Congress to go further, and make permanent our tuition tax credit—worth $10,000 for four years of college.”
He described the efforts he planned to rein in spending and tackle the budget deficit by freezing annual domestic spending over the next five years, making cuts in programs such as defense, and consolidating government agencies that deal with matters such as exports and housing policy. However, he also emphasized the need to invest more money in education, technology, infrastructure, transportation, and clean energy development to ensure U.S. competitiveness against other countries, likening it to the space race against the Soviet Union.
“This is our generation’s Sputnik moment,” he said.
Obama suggested the money for clean energy technology could come from rolling back tax breaks and other federal aid for the oil industry. “With more research and incentives, we can break our dependence on oil with biofuels, and become the first country to have 1 million electric vehicles on the road by 2015,” he said. “We need to get behind this innovation. And to help pay for it, I’m asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies. I don’t know if you’ve noticed, but they’re doing just fine on their own. So instead of subsidizing yesterday’s energy, let’s invest in tomorrow’s.”
He cited the work of the bipartisan deficit commission as a starting point for negotiations on how to control the budget deficit. “The bipartisan Fiscal Commission I created last year made this crystal clear,” he said. “I don’t agree with all their proposals, but they made important progress. And their conclusion is that the only way to tackle our deficit is to cut excessive spending wherever we find it – in domestic spending, defense spending, health care spending, and spending through tax breaks and loopholes.”
Obama also called for Republicans and Democrats to work together to improve the health care reform law, but not to fight battles over repealing the law. He indicated his willingness to repeal the expanded 1099 reporting provisions, however. “Now, I’ve heard rumors that a few of you have some concerns about the new health care law,” he said. “So let me be the first to say that anything can be improved. If you have ideas about how to improve this law by making care better or more affordable, I am eager to work with you. We can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses.”
In the official Republican response to Obama’s speech, Rep. Paul Ryan, R-Wis., emphasized the dangers of the growing budget deficit and the need to control spending. “Our nation is approaching a tipping point,” he warned. “We are at a moment where if government’s growth is left unchecked and unchallenged, America’s best century will be considered its past century.”
Another Republican lawmaker, Rep. Michele Bachmann, R-Minn., delivered the first-ever Tea Party Caucus response to the State of the Union address after Ryan spoke, emphasizing the growth in the unemployment rate and the budget deficit after Obama took office. However, she agreed with the need to reduce corporate taxes. “We need to start making things again in this country, and we can do that by reducing the tax and regulatory burden on job-creators,” she said. “America will have the highest corporate tax rate in the world. Think about that. Look no further to see why jobs are moving overseas.”
By Michael Cohn
by NFS | Jan 25, 2011 | Archives
The IRS Small Business and Self-Employed Tax Center at http://www.irs.gov/smallbiz offers extensive resources and online tools designed to help small businesses and self-employed persons.
The IRS Small Business and Self-Employed Tax Center on the IRS website offers the following resources:
- Small business forms and publications
- Employer Identification Number online application
- Employment tax information – federal income tax, Social Security and Medicare taxes, FUTA and self-employment tax
- Tax-related news that could affect your business
- Small business educational events
- IRS videos for small businesses
- A-Z Index for Business – find information fast using the A-Z listing
The site provides important tax information available for all stages of owning a business. Whether you’re starting, operating or closing a business, visit http://irs.gov/smallbiz for all your federal income tax information.
Other resources available on the IRS website include a virtual small business tax workshop, video and audio presentations, a guide to IRS audits, and a tax calendar designed for small business taxpayers.
The IRS Video Portal:
Tax Questions? Learn about tax topics through video and audio presentations on the IRS Video Portal. The video portal contains archived versions of live panel discussions, archived webinars, video clips, and audio archives of national phone forums.
IRS Audits Video Series:
“Your Guide to an IRS Audit” takes the viewer through the steps of an audit from notification to closing. The video series is composed of scenarios that demonstrate the stages of each type of audit: correspondence, office and field. The scenarios address issues that are common to audits of small businesses.
Virtual Small Business Tax Workshop:
The IRS Virtual Small Business Tax Workshop is an interactive resource to help small business owners learn about their federal tax rights and responsibilities. The workshop contains nine stand-alone lessons that can be selected and viewed in any sequence. The workshop is available online 24 hours a day, seven days a week from any computer. It can also be ordered on CD.
Tax Calendar for Small Business Taxpayers:
The Tax Calendar for Small Businesses and Self-Employed – Publication 1518 – is available online or as a printable PDF file. This 12-month calendar is filled with information on general business taxes, IRS and Social Security Administration customer assistance, electronic filing and paying options, retirement plans, business publications and forms, and common tax filing dates. Each page highlights different tax issues and tips that may be relevant to small-business owners, with room on each month to add notes, state tax dates or business appointments. You can also download the tax events into your calendar or subscribe to the tax calendar events. The calendar provides the small business owner with a ready resource for meeting their tax obligations.
If you have any additional small business questions, feel free to contact my office.
by NFS | Jan 24, 2011 | Archives
If you work in an occupation where tips are part of your total compensation, you need to be aware of several facts relating to your federal income taxes. Here are four things the IRS wants you to know about tip income:
1. Tips are taxable. Tips are subject to federal income, Social Security and Medicare taxes. The value of non–cash tips, such as tickets, passes or other items of value, is also income and subject to tax.
2. Include tips on your tax return. You must include in gross income all cash tips you receive directly from customers, tips added to credit cards, and your share of any tips you receive under a tip–splitting arrangement with fellow employees.
3. Report tips to your employer. If you receive $20 or more in tips in any one month, you should report all of your tips to your employer. Your employer is required to withhold federal income, Social Security and Medicare taxes.
4. Keep a running daily log of your tip income. You can use IRS Publication 1244, Employee’s Daily Record of Tips and Report to Employer, to record your tip income.
For more information see IRS Publication 531, Reporting Tip Income and Publication 1244 which are available at http://www.irs.gov or contact my office at 800-560-4NFS.
by NFS | Jan 21, 2011 | Archives
Attend our FREE Evening Workshops for the Home Buyer/Owner/Seller
- Are you looking to buy your first home?
- Are you looking to sell your current home and buy a new one?
- Do you have questions about the mortgage process?
- Do you have questions about Homeowner’s Insurance or Mortgage Protection Insurance?
- Do you know the tax breaks and benefits of owning a home and getting a mortgage?
Join us as we answer all of these questions and more at one of our FREE Workshops. Bring your Questions and we will provide the answers!
Presented by Your Home Services Team:
- Brian Schwartz – Omega Mortgage Corp
- Amy Abrams – Century 21 O’Neil & Associates
- Andrew Corndell – Liberty Mutual
- Jeffrey Schweitzer – Northeast Financial Strategies, Inc.
Upcoming Workshop Dates:
Register on Facebook Page or call / email Jeff at 800-560-4637 x14 or jeff@nfsnet.com
by NFS | Jan 21, 2011 | Archives
Many working taxpayers are eligible for the Making Work Pay Tax Credit in 2010. The credit is based on earned income and is claimed on your 2010 tax return when you file your taxes in 2011.
Here are five things the IRS wants you to know about this tax credit to ensure you receive the entire amount for which you are eligible.
The Making Work Pay Credit provides a refundable tax credit of up to $400 for individuals and up to $800 for married taxpayers filing joint returns.
Most workers received the benefit of the Making Work Pay Credit through larger paychecks, reflecting reduced federal income tax withholding during 2010.
Taxpayers who file Form 1040 or 1040A will use Schedule M to figure the Making Work Pay Tax Credit. Completing Schedule M will help taxpayers determine whether they have already received the full credit in their paycheck or are due more money as a result of the credit.
Taxpayers who file Form 1040-EZ should use the worksheet for Line 8 on the back of the 1040-EZ to figure their Making Work Pay Credit.
You cannot take the credit if your modified adjusted gross income is $95,000 for individuals or $190,000 if married filing jointly or more, you can be claimed as a dependent on someone else return, you do not have a valid social security number or you are a nonresident alien.
Feel free to contact me for more information about the Making Work Pay Credit.
