A last-minute provision added to the Republican tax plan would give people a tax cut through real estate shell companies, personally benefitting 14 Republican senators, according to a report from the International Business Times. Utah Sen. Orrin Hatch, who added the provision this week, is one of them. That’s because Hatch’s wife owns a stake in a real-estate LLC that generated income in 2016 that would qualify as a “pass-through” entity, per IBT, and the newly added tax provision allows owners of certain pass-throughs (including private real estate firms) a 20% deduction on taxable income. So what exactly is a pass-through entity? Essentially, a pass-through is a business that does not pay corporate income tax, and includes entities like sole proprietorships, partnerships, and S-corporations. About 95% of businesses in the U.S. are categorized as pass-throughs, according to the Brookings Institute, and they have traditionally paid a lower tax rate than big … [Read more...] about What Is a ‘Pass-Through’ Business and Why Is It Favored in the Tax Bill?
Taxes pass through
Anyone with access to a computer and a modem has noticed the increase in the use of the Web to promote the purchase of books, CDs and other consumer goods. An entire industry has emerged online, and consumers are using the Web to surf for the best deals on an endless number of items. The Internet has become an everyday part of our lives and, as an avid computer user, I think we should do everything we possibly can to help e-commerce continue to grow. Unfortunately, with changes in consumer buying trends has come the danger of reduced sales-tax revenues to the states, cities and towns who have come to rely on them for the provision of needed services, including the money that is used to pay the salaries of our teachers, police and fire fighters. For them, the Internet is a sales-tax loophole that is threatening to reduce our local governments' ability to provide the services we have come to rely on. If present trends continue, and sales on the Internet remain untaxed, revenues will … [Read more...] about Selling a new Net tax system
New Jersey residents in the market for some "tax-free" Amazon products had better act fast. Starting in July 2013, the state will start owing the online seller a 7 percent sales tax, thanks to an agreement between the New Jersey Division of Taxation and Amazon.com. The deal will also include the construction of two distribution facilities in the state. The contract says that by July 1, 2013, Amazon will begin voluntarily collecting taxes from customers and make necessary payments to the state. Changes could take effect earlier if Congress can pass legislation for sales tax collection from out-of-state retailers before July 1. Last year, Amazon stood in favor of the Marketplace Fairness Act, a bill that provides states with the authority to collect online sales taxes. Going forward, New Jerseyans will no longer be required to track and report use tax owed on online purchases from Amazon, while the state will receive the sales tax it is due to fund programs. If you buy something online, … [Read more...] about Amazon, NJ Reach Online Sales Tax Deal
Last night's Federal Budget included a ten per cent charge for digital downloads, as well as up to $20,000 in tax writeoffs for small businesses. As expected, last night saw the formal announcement of the so-called "Netflix Tax" on digital products or services imported by Australian consumers into Australia. The tax itself won't apply, however, until the 1st of July 2017, presuming it passes through both houses of parliament. The budget frames the tax as both a revenue raising measure and a way to equalise the market for Australian businesses in a competitive sense, with the budget papers stating: "Under the current law, digital products and services imported by consumers are not subject to the GST. This results in forgone GST revenue to the States and Territories and places domestic businesses, which generally have to charge and remit GST on the digital products and services they provide, at a tax disadvantage compared to overseas businesses." The budget expectation for the tax is … [Read more...] about Budget confirms Netflix Tax, adds tech tax writeoffs
FreeTax USA was actually launched in 2001, but this is the first time we reviewed the tax software. Its federal version supports all major IRS forms and schedules, with the exception of a handful of less common ones, such nonresident alien returns and prior year minimum tax credit. It's fast, it's easy to use, and it provides much more help than we would expect from a (mostly) free product that covers so much ground. It lacks the top-notch support and design pedigree of Editors' Choice TurboTax Deluxe, but it may be a good option for the budget-conscious. Common Traits As the name implies, FreeTax USA is, in fact, totally free unless you're filing a state return ($12.95) or want the advanced support options in the Deluxe version ($6.99), which is what I reviewed. Credit Karma Tax is also free, but it doesn't charge extra for filing a state return. It also provides less in the way of support. Regardless of price, all the sites I reviewed for tax year 2017 work similarly. They provide … [Read more...] about FreeTax USA Deluxe 2018 (Tax Year 2017)