February 2020 | Blog
If you’re on Twitter and you’re a tax nerd, you already know about #TaxValentines – it’s the best tax day of the year!
The tax world is big
So much to know and peruse
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Eide Bailly’s Tax News & Views!
Love & Taxes: The Romance of Filing Status – Kelly Phillips Erb, BloombergTax
You might not think of tax pros as relationship advisors, but we surprisingly get pulled into more family issues than you can imagine! And while tax should never be the only reason to do something, especially as serious as marriage, it’s something to take into consideration.
“Your marital status is determined by state law as of the last day of the calendar year. With a few exceptions, it doesn’t matter what your status is for most of the year: if you are married on December 31, you are considered married for the year.”
Depending on your situation, being married may bring a tax benefit or a “marriage penalty” which is when two people pay more tax filing together than as unmarried individuals.
See if the marriage penalty affects you at the Tax Policy Center’s Marriage Calculator.
Timing is everything for love…and tax.
New Bill Fixes Damaging Taxation of Business Investment – Adam Michel, The Daily Signal
Qualified Improvement Property finally gets its fix, plus immediate expensing made permanent in this newly introduced bill. Will it pass is the real question.
See how Eide Bailly’s Fixed Asset Specialty Services team can help navigate deductions and credits available for taxpayers.
Banning Flavored Tobacco Could Have Unintended Consequences – Ulrik Boesen, Tax Foundation. “Cigarettes make up about 82.5 percent of the total tobacco market and even more of the excise tax revenue due to higher rates on cigarettes versus other tobacco products. According to sales data, about 35 percent of the U.S. cigarette market is flavored, which means that 35 percent of the revenue collected would be affected by a ban.”
The concerns are not just a loss of tax revenues, but a ban has the potential to create illegal activities that will in turn cost the government in new expenses to monitor and prohibit as well.
IRS quietly deletes guideline that Fortnite virtual currency must be reported on tax returns – Brian Fung, CNN Business
Virtual currency is currently one of the hottest IRS issues, but it would seem they, like many people, are struggling to understand what it all means.
“The IRS's changes only add to confusion about how it is handling tax filings for virtual currencies -- and which digital products are lumped into the category. "[The] definition of virtual currency in IRS guidance would still encompass these," Jerry Brito, executive director at the Coin Center, a virtual currency think tank, wrote on Twitter after the changes on Wednesday. "I don't think they realized the consequences of their 1040 question.’”
Taxpayers still need to refer to published guidance, regardless of what an FAQ might say, to determine if their situation subjects them to reporting and paying tax on virtual currency.
"This question is an indicator that more is likely coming — more guidance, more rules, more requirements, more oversight and monitoring by the IRS," he said. "It's no longer something that's going to live in the background shadows. There's too much money there."
IRS Seeking Solutions to Avoid Flood of Amended Returns – Emily L. Foster, TaxNotes ($)
With multiple rounds of guidance and potential accounting method changes, will the IRS consider a streamlined approach for taxpayers?
“Harman asked whether the IRS would consider nontraditional approaches to navigate the TCJA transition period, such as “a one-time, omnibus, TCJA-related true-up on a future return” for accounting method changes, mathematical errors, and changes arising from the ripple effects that a change concerning one provision has on others.”
While it seems the IRS thinks this idea has merit, it would not be considered seriously until the future when final guidance issuance has died down.
Proposal to include tampons in Tennessee’s tax-free weekend faces pushback – Rebecca Klar, The Hill. "'I would think since it’s a sales tax holiday, there’s really no limit on the number of items anybody can purchase,'" state Sen. Joey Hensley, a Republican from Hohenwald, said Tuesday, according to AP. 'I don’t know how you would limit the number of items someone could purchase.'"
I have been wrong before, but I would not imagine women will rush out to clear stores of such products. Iowa’s latest tax reform bill would actually remove sales tax from these items permanently, not just for the weekend.
This is a roundup of tax news and opinion. Any opinions expressed or implied are those of the author and not necessarily those of Eide Bailly. Opinions found in linked items are those of the authors of the linked item, not of your bloggers or of Eide Bailly. “$” means link may be behind a paywall. Items here do not constitute tax advice.