Tax Guru – Ker$tetter Letter

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Archive for November, 2016

Tax Changes Under the Trump Administration?

Posted by taxguru on November 9, 2016

Now that Hitlery is out of the equation, we don’t have to waste time and energy worrying about the trillions of dollars in new taxes she was promising-threatening.  We can now focus on the what changes we might be seeing over the next few years under President Trump, along with the GOP controlled Congress. 

A good start at analyzing the changes we can expect is the following news release from TaxCoach, one of the most useful resources for any tax pros who are interested in keeping up on the most state of the art tax savings techniques for their clients.

Trump Won…Now What?

On January 20, Donald Trump will take the oath of office as the 45th President of the United States. He’ll have the full support of a Republican House and Senate, meaning an end to the gridlock of the past six years. What effect will his inauguration have on your taxes?

Trump has proposed a conventionally Republican suite of changes: lower rates, new deductions for families, and incentives to repatriate foreign earnings. At the same time, he has proposed to limit certain breaks and cap overall itemized deduction.

However, these are just the latest of several proposals Trump floated during the campaign. Trump appears to be less focused on policy details than on broad themes, so we shouldn’t be surprised if he lets Congressional Republicans take the lead on tax planning policy.

 

Individual Taxes

• Cut brackets to three: 12-25-33%

• Boost standard deduction to $15,000 ($30,000 for joint filers)

• New deduction for individual health insurance premiums

• New deduction for child care costs and “dependent care savings accounts”

• Limit itemized deductions other than mortgage interest and charitable gifts

• Cap itemized deductions at $100,000 ($200,000 for joint filers)

• Tax “carried interest” as ordinary income

• Repeal Alternative Minimum Tax

• Repeal “Obamacare” taxes

Estate Taxes

• Repeal Gift & Estate Tax

• Repeal stepped-up basis on gains over $10 million

Corporate Taxes

• Eliminate deferral of tax on foreign business income

• Impose 10% repatriation tax on accumulated profits of foreign subsidiaries

Repeal most business tax incentives (except R&D).

TaxCoach Software: Are you giving your clients what they really want?

Posted in TaxCoach, TaxReform, Trump | Comments Off on Tax Changes Under the Trump Administration?

Einstein’s Tax Dilemma

Posted by taxguru on November 5, 2016

The old worn-out cliché that something isn’t Rocket Science does have a connection to the realm of taxes with the famous quote from Albert Einstein (the famous physicist and not the actor who was born with the same name, but changed it to Albert Brooks). IRS even includes this on its page of humorous tax quotes.

“The hardest thing in the world to understand is the income tax.”

For a very interesting look at the history of this quote from one of the planet’s most intelligent residents, check out this article from a website I just discovered courtesy of Mr. Google, QuoteInvestigator.com

In this article, author Garson O’Toole explains the history of this famous Einstein quote. It actually came from a 1963 letter to Time magazine from Einstein’s tax advisor-preparer, Leo Mattersdorf of New York City.  It adds a bit more depth and context to the quote we are all familiar with. 

…the professor turned to me and with his inimitable chuckle said: “The hardest thing in the world to understand is income taxes.” I replied: “There is one thing more difficult, and that is your theory of relativity.” “Oh, no,” he replied, ”that is easy.” To which Mrs. Einstein commented, “Yes, for you.”

I encourage anyone who is interested in learning more about Einstein’s feelings about taxes to read the full article.

 

I am discussing this as an introduction to some pictures we took a few days ago, while visiting the Madame Tussauds Wax Museum in Orlando.  Unlike other wax museums I have visited in San Francisco and Branson, the statues are not chained off, but are open and accessible for picture taking.  Sherry took these pics with her iPhone. 

1KerEinstein1KerEinstein2

At first, I thought some of the statues, including this one, might be shorter than the people actually were.  However, checking online, the records indicate that Einstein was around 5’7”, so this does look realistic.

 

Posted in einstein, taxes | Comments Off on Einstein’s Tax Dilemma