Capitol Hill Republicans have greeted President Trump’s tax reform outline with a mix of lukewarm praise and restrained concern, suggesting that one of the administration’s signature agenda items is no slam dunk.
The tepid response doesn’t necessarily doom the proposal, which is extremely light on details. But it does mean that the White House has plenty of work ahead selling – and likely rewriting – the plan in order to win over enough Republican votes. Continue reading “Trump’s Tax Reform Plan Faces Tough Challenges”
Hillary Clinton and Donald Trump are both eyeing changes that would affect the federal income taxation of large and small businesses. But not surprisingly, they come to the table with very different business tax proposals.
Trump Supports Major Business Income Tax Reform
The Republican presidential nominee wants a 15% business income tax rate. But how exactly that rate would apply is anyone’s guess. Regular corporations are now subject to a maximum federal income tax rate of 35%. Individual owners of pass-through entities — such as S corporations, partnerships and LLCs — which pass their income to their owners for tax purposes, as well as sole proprietors who report income on Schedule C of their tax returns, are taxed at individual rates, which currently top out at 39.6%.
Continue reading “Trump and Clinton’s Widely Divergent Business Tax Proposals”
16 Reasons You Might Get Audited
Ever wonder why some tax returns are eyeballed by the Internal Revenue Service while most are ignored? Short on personnel and funding, the IRS audited only 0.84% of all individual tax returns in 2015. So the odds are pretty low that your return will be picked for review. And, of course, the only reason filers should worry about an audit is if they are fudging on their taxes.
That said, your chances of being audited or otherwise hearing from the IRS escalate depending upon various factors, including your income level, the types of deductions or losses claimed, the business in which you’re engaged and whether you own foreign assets. Math errors may draw IRS inquiry, but they’ll rarely lead to a full-blown exam. Although there’s no sure way to avoid an IRS audit, these 16 red flags could increase your chances of drawing unwanted attention from the IRS.
Continue reading “IRS Audit Red Flags”