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Tax Tip of the Week | No. 365 | More Good News for Nonprofits July 27, 2016

Posted by bradstreetblogger in : Tax Planning Tips, Tax Preparation, Tax Tip, Taxes, Uncategorized , add a comment

Tax Tip of the Week | July 27, 2016 | No. 365 | More Good News for Nonprofits

Several months ago in TTW #318 we discussed the new rules which make it much easier for nonprofit groups to achieve tax-exempt status.

On July 1, 2016  the IRS decreased the user fee for processing Form 1023-EZ, Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, from $400 to $275.

The streamlined application and reduced user fee is limited to those organizations with annual gross receipts of $50,000 or less and assets of $250,000 or less.

Give us a call if you have ever thought about starting a nonprofit organization.

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.

Rick Prewitt – the guy behind TTW…until next week.

Tax Tip of the Week | No. 364 | A Proposed New Tax July 20, 2016

Posted by bradstreetblogger in : Deductions, General, Tax Tip, Taxes , add a comment

Tax Tip of the Week | July 20, 2016 | No. 364 | A Proposed New Tax

I ran across this article in the Daily Tax Report that I thought you might find interesting………

Rep. Peter DeFazio (D-Ore.) is scheduled to introduce a plan to levy a 0.03 percent tax on most financial trades as he seeks to curb high-frequency trading.

The legislation, introduced on July 13, “will discourage risky trading behaviors that put everyday Americans’ investments on the line and is expected to collect over $417 billion in revenue in the next decade,” according to a July 11 statement from DeFazio’s office. DeFazio introduced similar legislation in 2013.

Financial transactions taxes gained popularity with some Democrats after the so-called 2010 flash crash, when markets fell and rebounded quickly partially as a result of computer algorithms designed to buy and sell securities fast to make a fraction of a cent’s profit on the trade.

The Democratic Party platform, set to be ratified at the convention later this month, supports taxing Wall Street to curb “excessive speculation and high-frequency trading” and notes that there is room within the party for a “diversity of views” on a broader tax.

DeFazio’s 0.03 percent tax is one of the lower ones proposed in recent years. Sen. Bernard Sanders (I-Vt.) and Rep. Keith Ellison (D-Minn.) have introduced legislation that would tax trades at up to 0.5 percent.

Higher rates raise more revenue but could also make markets less liquid and increase the cost of capital. A January report from the Urban-Brookings Tax Policy Center said that financial transactions taxes are of interest because “the base is so large that even a tiny tax rate would raise significant revenue.

The tax would be imposed on stock, bond, derivatives, partnership interests, actively traded commodities and currencies, according to an outline of the plan.

No tax would be levied for initial public offerings, short-term loans or insurance contracts. The plan includes a credit for retirement accounts and health or college savings accounts.

Looks like another attempt by Congress to micro-manage the economy.

We’ll keep you posted.

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.
Rick Prewitt – the guy behind TTW

…until next week.

Tax Tip of the Week | No. 363 | Did You Accidentally Forget to Pay This Tax? July 13, 2016

Posted by bradstreetblogger in : General, Tax Planning Tips, Tax Preparation, Tax Tip, Taxes , add a comment

Tax Tip of the Week | July 13, 2016 | No. 363 | Did You Accidentally Forget to Pay This Tax?

Remember that purchase you made online — the one you didn’t have to pay sales tax on? Guess what? In most cases, you are supposed to pay the tax yourself, at the same rate as your state’s sales tax. These consumer-assessed taxes are called “use” taxes, and they typically apply when you or your business make a purchase from an out-of-state seller that is not required to collect sales tax in your state. If the seller does not collect the tax from you, and the purchase is otherwise taxable, you’re responsible for remitting use tax to the state. The idea is to keep in-state businesses from suffering a competitive disadvantage against out-of-state rivals.

In Ohio, the “use” tax is reported on Line 12 of the IT 1040 return.

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.
Rick Prewitt – the guy behind TTW

…until next week.

Tax Tip of the Week | No. 362 | One Million Fewer Taxpayers Asked to Take ID Quiz July 6, 2016

Posted by bradstreetblogger in : General, tax changes, Tax Deadlines, Tax Planning Tips, Tax Preparation, Tax Tip, Taxes , add a comment

Tax Tip of the Week | July 6, 2016 | No. 362 | One Million Fewer Taxpayers Asked to Take ID Quiz

Here is a recent press release from the Ohio Society of CPAs……..

The Ohio Department of Taxation said about 1 million fewer taxpayers had to take its ID Confirmation Quiz to get their refunds this past tax season.

This was the result of more experience in fighting tax fraud and better targeting of suspicious income tax returns, Tax Commissioner Joe Testa said.

“The analysis we’ve done and modifications we’ve made have allowed us to dramatically reduce the number of taxpayers being asked to take the quiz and still remain among national leaders in aggressively combating these fraud schemes,” he said. “We will continue to refine our defenses to keep the state treasury safe and work to make the process more user-friendly.”

Last year, nearly 1.7 million taxpayers were asked to take the ID Quiz; this season that number was reduced by nearly two-thirds, to about 665,000.

Last year, taxpayers complained about the questions and Gov. Kasich vetoed a budget provision that would have limited the questions to information obtained from the previous five years. Testa told OSCPA such a limit would have hamstrung his department’s ability to examine tax returns.

Testa said taxpayers this year told the department the quiz was quick and easy to take, a view supported by its 98.8% passage rate. In addition, as identity theft and attempted tax fraud have become more prevalent issues, taxpayers said they understood and appreciated the extra steps ODT has taken to protect their identity and tax dollars. Security measures were also expanded this year to protect the identity of minors as well as adults.

Since 2014 more than $526 million in fraudulent income tax refund claims have been blocked, the department said, and that number is expected to increase. Final data for the recent filing season is not yet available.

You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.
Rick Prewitt – the guy behind TTW

…until next week.