The 20% deduction for pass-through entity owners and planning strategies.

The recently enacted tax reform bill has made significant changes to the taxation of business.  This post summarizes some of the more substantial changes.

Tax treatment upon the sale of property with life estates.

Summary of Trump's Tax Reform 

Employer-owned life insurance policies issued after August 17, 2016 are subject to taxation by the IRS unless they qualify for an exception.

IRS Using Software to Find Bitcoin Users

Sellers who use Ebay and Paypal or other payment processors may receive Form 1099-Ks.

2017 Federal Income Tax Rates

IRA ownership of Rental Property

Tax issues with inheriting property

Trump's Tax Plan

The Internal Revenue Service has released its annual list of tax scams.  A summary of the list, called the "Dirty Dozen" is provided in this article.

The IRS was prepared to require tax filers to indicate on line 61 whether they and their family had health coverage during 2016. If not, taxpayers are subject to a penalty. Now it appears, due to President Trump, that filing out line 61 is optional.

The purpose of the mediation is to resolve disputes in the early stages of the collection process and within 40 days after the mediation application is accepted by the IRS.  In order to be accepted into the process, taxpayers must make a good faith effort to resolve matters with the IRS collection officer followed by a conference with the officer's manager.  Acceptance into the mediation process does not mean that taxpayers can't pursue other options if mediation doesn't resolve their case.  

The increase in the earnings limit for social security represents the largest one-year increase in history.  The maximum social security tax is jumping from $7,346 in 2016 to $7,886 in 2017 for employees.  There is a larger increase for the self-employed as their social security taxes will be increased from $14,694 to $15,773 in 2017.  

The IRS along with the DOJ has been aggressively pursuing offshore account holders to disclose their overseas bank accounts before it's too late.  There are significant penalties for holding accounts in certain foreign banks.  However, in an effort to encourage account holders to disclose their accounts, the IRS started the Offshore Voluntary Disclosure Program (OVDP)  and the streamlined procedures enable taxpayer to meet their tax obligations while limiting the potential penalties for continued non-compliance.

More and more consumers are buying all kinds of stuff online--over the internet from companies such as Amazon.  Many of these sales transactions occur without the payment of sales taxes, as the selling company likely has no physical presence in the state of the purchaser.   Many brick-and-mortar companies argued that they were at a disadvantage as they were forced to compel customers to pay more (often times 8% or more) to cover the state sales tax.  

Many couples file joint tax returns because in most cases it lowers their tax.  When filing jointly, however, both people are liable for the tax and any assessments imposed against the return.  This joint and several liability even survives the couple's divorce.  Joint and several liability means that each taxpayer is legally responsible for the entire liability. The IRS has provided for three types of relief from joint and several liability for spouses who filed joint returns.

The House of Representatives has passed its plan for changing the tax code that lowers marginal rates with incentives for domestic investment and simpler tax filings.  It is all about economic growth and simplicity.

A recent decision by the Tax Court should serve as a warning to people that own multiple businesses but don't always "respect the corporate formalities" associated with each business entity. If you own more than one business and sometimes have Company A pay the expenses of Company B, or perhaps task an employee of Company A to do things for Company B, the IRS may deny your deductions.