http://www.buildingonline.com/news/viewnews.pl?id=7921&subcategory=192
A brief summary of what SB 15XX, Senator Roy Ashburn (R- Bakersfield), authorizes:
▸ A tax credit of up to $10,000 credit (5% of home price or $10k, whichever is less) for the purchase of a newly constructed, previously unoccupied home.
▸ Available March 1, 2009 and good until March 2010, or when funding authority runs out – whichever comes first ($100 million was allocated to program).
▸ Allocated by the state's Franchise Tax Board on a first-come, first-served basis (details still to be worked out).
▸ Paid out to home purchasers over three tax years in equal amounts (i.e. $3300 for 2009, $3300 for 2010, etc.) • Purchasers must reside in the home for at least two years.
▸ There are no income limitations that have to be met by purchasers.
▸ There is no first-time homebuyer requirement.
▸ There is no repayment requirement (unless the purchaser sells, rents out, etc before 2 years expire).
Thursday, February 26, 2009
Democrats' Budget
President Barack Obama presented his budget for fiscal 2010, including about $318 billion in tax increases mainly targeted at the wealthy. Capital gains will be taxed at 20% for taxpayers whose adjusted gross income is more than $250,000.
http://www.cnn.com/video/#/video/podcasts/ac360/site/2009/02/26/cooper.podcast.wednesday.cnn
CNN's Anderson Cooper has a very good analysis of the new Democratic budget proposal, increasing discretionary expenditures by some 8%, with over 8,000 pork projects.
http://www.mercurynews.com/news/ci_11788298
Administration officials said the president would propose to reduce the value of itemized tax deductions for everyone in the top income tax bracket of 35 percent and many of those in the 33 percent bracket — roughly speaking, starting at $250,000 in annual income for a married couple.
Under existing law, the tax benefit of itemizing deductions rises with a taxpayer's marginal tax bracket (the bracket that applies to the last dollar of income). For example, $10,000 in itemized deductions reduces tax liability by $3,500 for someone in the 35 percent bracket.
Obama would allow a saving of only $2,800 — as if the person were in the 28 percent bracket. A White House official said it's unfair for high-income people to get a bigger tax break than middle-income people for claiming the same deductions or making the same charitable contributions.
http://online.wsj.com/article/SB123561551065378405.html
Even the most basic inspection of the IRS income tax statistics shows that raising taxes on the salaries, dividends and capital gains of those making more than $250,000 can't possibly raise enough revenue to fund Mr. Obama's new spending ambitions.
Consider the IRS data for 2006, the most recent year that such tax data are available and a good year for the economy and "the wealthiest 2%." Roughly 3.8 million filers had adjusted gross incomes above $200,000 in 2006. (That's about 7% of all returns; the data aren't broken down at the $250,000 point.) These people paid about $522 billion in income taxes, or roughly 62% of all federal individual income receipts. The richest 1% -- about 1.65 million filers making above $388,806 -- paid some $408 billion, or 39.9% of all income tax revenues, while earning about 22% of all reported U.S. income.
Note that federal income taxes are already "progressive" with a 35% top marginal rate, and that Mr. Obama is (so far) proposing to raise it only to 39.6%, plus another two percentage points in hidden deduction phase-outs. He'd also raise capital gains and dividend rates, but those both yield far less revenue than the income tax. These combined increases won't come close to raising the hundreds of billions of dollars in revenue that Mr. Obama is going to need.
http://www.cnn.com/video/#/video/podcasts/ac360/site/2009/02/26/cooper.podcast.wednesday.cnn
CNN's Anderson Cooper has a very good analysis of the new Democratic budget proposal, increasing discretionary expenditures by some 8%, with over 8,000 pork projects.
http://www.mercurynews.com/news/ci_11788298
Administration officials said the president would propose to reduce the value of itemized tax deductions for everyone in the top income tax bracket of 35 percent and many of those in the 33 percent bracket — roughly speaking, starting at $250,000 in annual income for a married couple.
Under existing law, the tax benefit of itemizing deductions rises with a taxpayer's marginal tax bracket (the bracket that applies to the last dollar of income). For example, $10,000 in itemized deductions reduces tax liability by $3,500 for someone in the 35 percent bracket.
Obama would allow a saving of only $2,800 — as if the person were in the 28 percent bracket. A White House official said it's unfair for high-income people to get a bigger tax break than middle-income people for claiming the same deductions or making the same charitable contributions.
http://online.wsj.com/article/SB123561551065378405.html
Even the most basic inspection of the IRS income tax statistics shows that raising taxes on the salaries, dividends and capital gains of those making more than $250,000 can't possibly raise enough revenue to fund Mr. Obama's new spending ambitions.
Consider the IRS data for 2006, the most recent year that such tax data are available and a good year for the economy and "the wealthiest 2%." Roughly 3.8 million filers had adjusted gross incomes above $200,000 in 2006. (That's about 7% of all returns; the data aren't broken down at the $250,000 point.) These people paid about $522 billion in income taxes, or roughly 62% of all federal individual income receipts. The richest 1% -- about 1.65 million filers making above $388,806 -- paid some $408 billion, or 39.9% of all income tax revenues, while earning about 22% of all reported U.S. income.
Note that federal income taxes are already "progressive" with a 35% top marginal rate, and that Mr. Obama is (so far) proposing to raise it only to 39.6%, plus another two percentage points in hidden deduction phase-outs. He'd also raise capital gains and dividend rates, but those both yield far less revenue than the income tax. These combined increases won't come close to raising the hundreds of billions of dollars in revenue that Mr. Obama is going to need.
Wednesday, February 25, 2009
Monday, February 23, 2009
IRS calls for tax simplification
IRS National Taxpayer Advocate Nina E. Olson urged Congress to simplify the U.S. Tax Code and recommended measures to reduce the burden on taxpayers who are struggling to pay their bills.
Olson advanced a simplification plan organized around six core principles:
1. The tax system should not entrap taxpayers.
2. The tax laws should be simple enough to allow most taxpayers to prepare their own returns without help, permit taxpayers to compute their tax liabilities on a single form, and let IRS telephone assistors fully and accurately answer taxpayer questions.
3. The tax laws should anticipate the largest areas of noncompliance and minimize the opportunities for such noncompliance.
4. The tax laws should provide some choices, but not too many.
5. Refundable credits provided by the law should be easier to administer.
6. The tax system should incorporate a periodic review of the Tax Code, which Olson calls a "sanity check."
Olson cited the Alternative Minimum Tax as one example of complexity. "Although it was originally conceived to prevent wealthy taxpayers from escaping tax liability through the use of tax-avoidance transactions, 77 percent of the additional income subject to tax under the AMT today is attributable to the disallowance of deductions otherwise allowed for state and local taxes and personal and dependency exemptions," she declared.
"Few people think of having children or living in a high-tax state as a tax-avoidance maneuver, but under the unique logic of the AMT, that is essentially how those actions are treated," she noted.
To read the entire article, go to http://www.webcpa.com/article.cfm?articleid=30658.
Olson advanced a simplification plan organized around six core principles:
1. The tax system should not entrap taxpayers.
2. The tax laws should be simple enough to allow most taxpayers to prepare their own returns without help, permit taxpayers to compute their tax liabilities on a single form, and let IRS telephone assistors fully and accurately answer taxpayer questions.
3. The tax laws should anticipate the largest areas of noncompliance and minimize the opportunities for such noncompliance.
4. The tax laws should provide some choices, but not too many.
5. Refundable credits provided by the law should be easier to administer.
6. The tax system should incorporate a periodic review of the Tax Code, which Olson calls a "sanity check."
Olson cited the Alternative Minimum Tax as one example of complexity. "Although it was originally conceived to prevent wealthy taxpayers from escaping tax liability through the use of tax-avoidance transactions, 77 percent of the additional income subject to tax under the AMT today is attributable to the disallowance of deductions otherwise allowed for state and local taxes and personal and dependency exemptions," she declared.
"Few people think of having children or living in a high-tax state as a tax-avoidance maneuver, but under the unique logic of the AMT, that is essentially how those actions are treated," she noted.
To read the entire article, go to http://www.webcpa.com/article.cfm?articleid=30658.
Saturday, February 14, 2009
Obama Stimulus Plan
Click on this PDF file from CCH, requires Adobe Acrobat Reader:
http://tax.cchgroup.com/Legislation/House-Senate-Recovery-Act-2009.pdf
And here's another article from Yahoo:
http://finance.yahoo.com/taxes/article/106600/Stimulating-Work
An overview of the stimulus package, where the money goes:
http://accounting.smartpros.com/x65480.xml
To read the law, click here.
http://tax.cchgroup.com/Legislation/House-Senate-Recovery-Act-2009.pdf
And here's another article from Yahoo:
http://finance.yahoo.com/taxes/article/106600/Stimulating-Work
An overview of the stimulus package, where the money goes:
http://accounting.smartpros.com/x65480.xml
To read the law, click here.
Tuesday, February 10, 2009
Friday, February 6, 2009
Labor Secretary nominee's tax problem
http://www.webcpa.com/article.cfm?articleid=30706
Washington, D.C. (Feb. 6, 2009)
By WebCPA staff
In the latest sign of tax trouble in the Obama cabinet, Labor Secretary-designate Hilda Solis’ husband had tax liens filed against him.
Confirmation hearings for Rep. Solis, D-Calif., were delayed after news of the tax problems surfaced. The White House admitted to the latest tax snafu after USA Today discovered 15 tax liens dating back to 1993 from the State of California and Los Angeles County totaling $7,630, some of which have since been paid. The tax liens had been filed against Solis’s husband, Sam H. Sayyad, and his business, Sam’s Foreign and Domestic Auto Center. Sayyad paid $6,400 this week to settle the outstanding tax liens, but still plans to appeal them.
Solis is the fourth nominee to the Obama administration to face tax questions in recent weeks. Earlier this week, former Senate Majority Leader Tom Daschle withdrew his nomination for secretary of Health and Human Services after he was forced to pay $140,000 in taxes and interest, mainly for the use of a car and driver provided by a private equity firm between 2005 and 2007 (see Daschle Bows Out After Tax Problems).
Treasury Secretary Timothy Geithner also needed to pay over $42,000 in taxes, interest and penalties for self-employment taxes that he owed from work he did between 2001 and 2004 for the International Monetary Fund (see Geithner Admits Back Tax Problems).
A third nominee, Nancy Killefer, was forced to withdraw after being named to the new post of chief performance officer. The Associated Press discovered a 2005 tax lien for $946.69 filed by the District of Columbia on her home for failure to pay unemployment compensation tax on household help.
Washington, D.C. (Feb. 6, 2009)
By WebCPA staff
In the latest sign of tax trouble in the Obama cabinet, Labor Secretary-designate Hilda Solis’ husband had tax liens filed against him.
Confirmation hearings for Rep. Solis, D-Calif., were delayed after news of the tax problems surfaced. The White House admitted to the latest tax snafu after USA Today discovered 15 tax liens dating back to 1993 from the State of California and Los Angeles County totaling $7,630, some of which have since been paid. The tax liens had been filed against Solis’s husband, Sam H. Sayyad, and his business, Sam’s Foreign and Domestic Auto Center. Sayyad paid $6,400 this week to settle the outstanding tax liens, but still plans to appeal them.
Solis is the fourth nominee to the Obama administration to face tax questions in recent weeks. Earlier this week, former Senate Majority Leader Tom Daschle withdrew his nomination for secretary of Health and Human Services after he was forced to pay $140,000 in taxes and interest, mainly for the use of a car and driver provided by a private equity firm between 2005 and 2007 (see Daschle Bows Out After Tax Problems).
Treasury Secretary Timothy Geithner also needed to pay over $42,000 in taxes, interest and penalties for self-employment taxes that he owed from work he did between 2001 and 2004 for the International Monetary Fund (see Geithner Admits Back Tax Problems).
A third nominee, Nancy Killefer, was forced to withdraw after being named to the new post of chief performance officer. The Associated Press discovered a 2005 tax lien for $946.69 filed by the District of Columbia on her home for failure to pay unemployment compensation tax on household help.
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