IRS Seeking One Billion Dollars For Hiring
Sanjiv Gupta CPA - 6 days ago
How Many Tax Returns IRS Can Audit Each Year?It depends upon how much resources IRS has available. And IRS is just getting ready to increase those resources. Obama administration has recently asked Congress for an additional one billion dollars so that IRS can go on a hiring spree. Why not? – after all, IRS is the best money-making department for the government.Obama’s administration estimates that hiring more IRS agents can bring in $1.5 billion dollars in additional revenue. That is lots of money and the United States can sure use it to fund all the wars we are fighting.Just to be fair, the IRS budget was trimmed down in the year 2011 and this increase will bring a total IRS budget to about 12.8 billion dollars. Just like the Obama administration, IRS is very happy this kind of budget increases. After all – more budget means more agents and more agents means more revenue. You don’t need a certified public accountant to do this math.NTEU president Collen M. Kelley announced in a statement that the additional funding is critical to repair the damage of the harmful cuts during the past two years. He further clarified that the IRS collects some 93 percent of all government revenues — it only makes sense to view IRS funding as an investment towards economic recovery.How many more agents can IRS hire with additional funding?“Rough figure is around 4000 agents,” according to National Treasury Employee Union.More jobs and more revenue – what’s there to lose for slow and sluggish recovery excepts fewer dollars in US taxpayer pockets.Share your thoughts, should IRS get this additional funding?
2012 and 2013 Tax Tips
Sanjiv Gupta CPA - 8 years ago
Considering the uncertain global conditions and economic downturn, federal tax rules in the US have not been formulated beyond the year 2012. In this context, it has become very difficult to prepare a final layout for estate and gift tax. In the face of such a situation, some important tax tips have been discussed below, which can efficiently help plan income tax propositions.In the first case, it is suggested that income should be deferred to the subsequent year, secondly, tax deductions should be enjoyed and last of all if there is any such tax provision that has expired, it must be taken into account. In the following passage, we have discussed the federal tax rules, which have been implemented by the U.S. government in the year 2012 and the proposals, which have found a place in the 2013 US budget.Transfer tax rules in effect for the year 2012The transfer tax rules, which have been put into effect for the year 2012, are as follows:1. In the event of a person’s death in 2012, an exemption limit of $5,120,000 has been set which is a revised and adjusted figure compared to the one that had been fixed in 2011. Other than the exemption limit, the landed properties will be taxed at a 35% rate.2. A tax enactment plan for married couples implies that if in the event of the death of one spouse the other person can utilize the unused portion of the dead partner’s deduced amount. Such a provision is called portability and this will remain in operation only for the year 2012. To get the fullest advantage of portability or deceased spousal unused exclusion amount, as it is technically known as there is the need to produce federal estate tax return of the dead partner’s estate. It does not matter even if the gross value of the estate is marked below $5,120,000 because whatever the case may be the estate tax return of the deceased person’s estate has to be filed.3. There are other spheres, which are subjected to the same amount of exemption limit and are known as lifetime gift tax and generation-skipping transfer tax. The exemption amount stands at $5,120,000 and like in the first two cases and the taxable amount for the lifetime and generation-skipping transfers remains the same at a flat 35% tax rate.4. The deductible amount remains the same at $5,120,000, which is applicable for lifetime gift tax. Like in the earlier cases, a 35% tax rate has been decided for all taxable gifts over the exemption amount. On a whole, the gift tax and the estate tax have been brought under a single section.New tax proposals indicated by President Obama in the 2013 budget If the tax proposals, planned for the 2013 US budget are finally implemented and brought into effect then there will be notable changes in estate tax payments, generation-skipping transfer, and gift taxes.1. Talking about exemption limit the new exemption amounts that have been fixed for estate and generation-skipping transfer tax are kept at $3.5 million and $1 million respectively.2. The new taxable amount has been increased from the earlier 35% to a new flat 45% tax rate.3. Coming to the section, which talks about the provision of portability where the earlier facility that allowed a surviving spouse to utilize a deceased partner’s unused exempted amount, has been made permanent.4. Valuation discounts have also been talked about in the 2013 budget plan. In the present scenario due to the absence of good control and proper marketing techniques, the interests of business organizations suffer heavily. However, according to the 2013 plan module, the value of interests will only be discounted in the case of family businesses.5. Grantor retained annuity trusts will face several changes as per 2013 tax rules. Going by the present condition laid down in the rule book, a person can save that extra money which he has to shell out for paying transfer tax costs by using grantor retained annuity trust. Two different conditions have been mentioned in the 2013 budget plan, which will bring the earlier provision of zeroing out the gift in the trusts to a permanent stop.Some other significant changes that have been noted in the tax evaluation rules applicable for grantor trust are that unlike before landed property owned by the grantor trusts will be included at the time of evaluating the grantor’s total estate under his possession. In addition, all kinds of distributions that will be made in the lifetime of the grantor will be indicated as gift tax.
State Budgets and Taxes: What Will Happen in 2013?
Sanjiv Gupta CPA - 7 years ago
2013 is a year of many expectations. In the USA, the new government (the Obama government) has been given another lease of life to implement its policies and affect the lives of the common Americans for the next 4 years.There is a school of thinking that the federal fiscal cliff has the potential on unloading a massive state tax fiscal cliff or disaster if left unchecked. The main reason for this expected increase in the tax bill arises from the fact that some of the states, and in essence most of the states, rely on the federal government to sort their programs. If this trend spills over to the next year, then the federal government will have to find new ways of sustaining the state's programs. The most common way that governments use to raise money for their needs is through taxation. An increased program bill can only result in an increased tax bill. According to various sources, the federal government provides support of up to 20% to the different states. In addition to this problem, the states will have to balance their budgets in a way that they can cut spending and increase the revenue that they receive. The result of these actions may include spending cuts and an increase in the tax bill to the ordinary citizens.Putting this in perspective, at least>48 states in the USA have budget deficits accumulating a total of $581 billionin the last four years only. How will different states seek to cover their deficits? Well, the rumor around town and in government is that there are going to be quite a number of changes that will tax place especially in relation to the taxation threshold. There have been suggestions to increase the number of taxes such as sales tax. However, not all states will follow the same path when trying to cut their deficits. In fact, it is expected that the most successful states are those that will come up with innovative ways of ensuring that the deficits are dealt with without increasing the taxes. Already, there is much public outcry about the increase in the federal debt, an issue that caused a lot of problems for the Obama administration during the campaign.2013 is a year that promises to be one with many solutions. However, it is also a year in which individuals will have to undergo some “baptism of fire” so to speak if the states in the USA are to achieve their long term goals.
4 Ways That The US Budget Deal Might Affect You
Sanjiv Gupta CPA - 6 years ago
There is a new budget deal working in Congress that will have large effects on taxes and government spending if it is passed. Congressional leaders Representative Paul Ryan (Republican – Wisconsin) and Senator Patty Murray (Democrat – Washington) came to an agreement on a long term budget deal. If it is passed, this deal would give clarity to owners of businesses on their own economic future and the country’s financial future in the coming years.According to sources at the Washington Post, this deal will not reduce the national debt but it will affect many small businesses in 4 ways:Increased Government Spending. The new budget would increase spending by the government and it would repeal some of the 2013 spending cuts. This means that government agencies would have more available money to spend. This is good news for many contractors for small government that lost business in recent months during the spending freeze.It will reduce the chance of the government shutting down again in the future. One of the top reasons that this budget was important to agree on was so that the government could avoid any future shutdowns. The 2013 government shutdown has cost the national economy approximately $24 billion dollars. It hurt many businesses that rely on government activity and spending for a majority of their business. Consumer confidence was decreased as Americans entered the 2013 holiday season. This budget plan would significantly reduce the chance of having another government shutdown.Corporate and individual tax rates will not increase. The new budget deal ignored the proposal by President Obama to decrease the corporate tax rate in addition to eliminating all corporate loopholes. Individual and corporate federal tax rates would stay the same. Additionally, the deal would not eliminate corporate loopholes. Corporations will still be able to get tax deductions if they buy corporate jets in addition to many other deductions they were able to take in 2012.Airfare might increase. If this budget is approved, many business airline travelers will see moderately increased airline tickets. Under the deal, payments for increased federal revenues will be funded by increased aviation and security fees. These fees are paid by the fliers and are used to finance TSA (Transportation Security Administration).Now the question is whether the budget deal will have enough support for it to pass through Congress. It was praised by President Obama because it was reached under great compromise by the parties. However, many are predicting that the hard-line Republicans are going to try to kill the deal because there are not enough cuts in government spending.
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