IRS has announced that the standard rates for mileage for 2017 are 53.5 cents per mile for business use, 17 cents per mile for medical or moving expense, and 14 cents per mile for medical. In a separate announcement, they have stated they will begin processing 2016 tax returns on January 23, 2017. Many due dates are changing for forms and tax returns also. Here’s a link to a blog I wrote for the BBB with more information.
Here is my latest guest blog written for the local Better Business Bureau.
Cash for keys payments have become fairly common in cases of struggling homeowners facing foreclosure. To avoid a lengthy and expensive foreclosure process, many lenders offer a cash incentive to homeowners to vacate the property quickly and to leave it in good condition. Often these lenders issue a 1099-Misc to the homeowner showing that the payment is nonemployee compensation which would be taxed to the individuals as ordinary income subject to self employment tax. In TC Summary Opinion 2016-74 the tax court again confirms that this treatment is not correct. In the above case, the CPA for the taxpayers included the payment as part of the sales proceeds of the property and not as ordinary income. The IRS disagreed and assessed additional taxes against them so they went to court. The tax court agreed with the position taken by the CPA and not the IRS. Cancellation of debt income is a complex tax issue. It pays to have competent tax advice from someone such as an Enrolled Agent or CPA if you are facing this issue.
Let’s see, we just had Thanksgiving, then Black Friday to spend our money at stores, Cyber Monday to spend online, and next comes Giving Tuesday if you still have any money left. Here’s a link from the IRS with some information about tax deductible donations. If you have any questions regarding what gifts are deductible, let us know.
Most of the energy credits existing under current federal law expire at the end of 2016. Solar energy credits have been extended but a variety of credits for energy efficient windows, doors, A/C systems etc expire on December 31st. For anyone still wishing to take advantage of these credits, the items need to be installed and in use by December 31st. As a caveat, these credits have expired before and then been reinstated by congress. Will these credits be extended by the lame duck congress or reinstated in the future? Well, my crystal ball isn’t working this morning so we will have to stay tuned to see what happens.
Good news for CA taxpayers! A temporary increase to sales tax approved by voters expires on 12/31/2016. In 2017 the rate drops by .25%. So for all of those looking to purchase your newly approved recreational marijuana, you will pay slightly less in sales tax. However, there are cultivation taxes, a 15% statewide excise tax and local governments can also add local taxes to your cannabis purchases.
Many people who couldn’t afford health insurance chose to instead pay the penalty for not having insurance. That penalty increased dramatically in 2015 and again in 2016. The “somewhat” good news is that for 2017 and beyond the penalty increases are much smaller since they are simply adjusted for inflation. Here’s a link on the subject.
Twenty people were recently arrested in another fake IRS scam. This one involved call centers in India and runners doing some of the ground work in the US. These scammers convinced people that they would be arrested if they didn’t make immediate payments through a variety of gift cards. The real IRS does not accept gift cards to pay tax bills. But, they have set up locations where tax payments can be made in cash through authorized vendors. For details on this new program see here.
This time they are from India.
It seems that the press has been obsessed in the last few days about an alleged loss that Donald Trump had 21 years ago. First off, sharing confidential tax return information is against the law so the tax records were illegally obtained. Second there is a major discrepancy in the pages shared by the NY Times. Being a tax person, I was curious what was shown on the return so I looked it up on google.
There is nothing from Trumps 1995 federal return but there are 3 pages from different state returns, one page each from New York, Connecticut and New Jersey. The NY and CT returns show the 900+ million dollar loss that has been reported widely in the press. But, the NJ return shows income from all sources to be a positive of over 19 million dollars, roughly 1.5 million of that coming from NJ sources. So, did he make 19 million or lose 900 million. Apparently, the 900 million dollar loss is a better story so they went with that. By the way, sharing confidential tax information is a crime so I will not be providing a link to the pages, but I’ll bet if you search for Trump tax records and NY times you can find it… unless they remove it from their site.