Tax Roundup, April 29, 2013: Getting ready for the Obamacare Investment Income Tax. And a disturbing lack of faith in OVDI.

April 29th, 2013 by Joe Kristan

20121120-2Laura Saunders, Are You Ready for the New Investment Tax?, (Wall Street Journal, via The TaxProf):

The tax, which took effect Jan. 1, applies to the “net investment income” of married joint filers who have more than $250,000 of income (or $200,000 for singles). Only investment income—such as dividends, interest and capital gains—above the thresholds is taxed. The rate is a flat 3.8% in addition to other taxes owed.

“Affluent investors who ignore this tax will be in for a total shock next April 15,” says David Lifson, a certified public accountant specializing in tax at Crowe Horwath in New York. Such income is typically not subject to withholding, and people won’t be factoring it into their estimated taxes. Lower-bracket taxpayers who receive a windfall large enough to owe the tax will also be in for a surprise.

This tax is shockingly complex, and it will surprise a lot of taxpayers next April.

Related: Tony Nitti,  Overview Of The New 3.8% Investment Income Tax, Part 1

 

Feds sue over Des Moines utility tax (Des Moines Register).  Des Moines lost a long legal battle over its “utility tax” on electric bills.  Now the federal government is after the city:

Federal prosecutors acting on behalf of the U.S. Department of Veteran Affairs sued the city of Des Moines and Mid­American Energy Co. on Friday, alleging that the city’s longstanding surcharge on gas and electric customers in Des Moines constitutes an illegal tax when levied against Uncle Sam.

 

Trish McIntire,  W-2Gs and CP2000s:

When a taxpayer wins a jackpot, the casino gives them the W-2G for the win at that time. It’s up to the taxpayer to keep the W-2G safe and bring it into me, or their preparer, when their taxes are done. What happens to the W-2G? It gets shoved into a purse or pocket, thrown in the glove compartment or on the desk at home or thrown in the trash by accident.

Robert D. Flach,  THE MORTGAGE INTEREST DEDUCTION:

I support keeping the deduction for acquisition debt mortgage interest on one’s primary personal residence, and the deduction for real estate taxes on the same primary personal residence, not to encourage home ownership, but as a form of “geographical equalization”.

In other words, he wants to help out people who live in places where houses cost more.  I think that’s misguided, as it also encourages people who live in low-cost locales like Des Moines to build palaces with help from the taxman.

 

Russ Fox,  1700 Miles and a 7% Difference.  Joe Mauer of the Minnesota Twins tries to avoid Minnesota residency for low-tax Florida.  It went about as well as this season will for the Florida Marlins (or the Twins, for that matter).

 

Kay Bell,  Smokers are among the latest federal tax targets.  Transferring nicotine addiction from smokers to government.

Jana Luttenegger,  IRS Announces Furlough Days (Davis Brown Tax Law Blog).

Patrick Temple-West,  Obama talks budget with Republicans, and more (Tax Break)

Paul Neiffer,  Don’t Forget Your Retirement Plan.  “I was talking with a new farm client the other day about his estate plan and what struck me the most was not how much farm land value he had accumulated but rather the amount he had tucked away into his retirement plans.”

Peter Reilly,  Fifth Avenue Inspirational Shopping Not Doing Business. Dang.

 

Phil Hodgen,  Note to Concerned Immigrant:

Get some competent advice about how to handle the past years. If the advice is OVDI, then stand up and walk away, swearing the mightiest oaths that a drunken sailor could swear.

Perhaps the Offshore Voluntary Disclosure Initiative has somehow failed to gain the confidence of the tax bar?

Jack Townsend,  More on the GAO Report on IRS Offshore Disclosure Initiatives

 

Trust me, peasant, it’s for your own good.  Former GM Exec Bob Lutz Suggests Higher Gas Taxes Would Help Americans (TaxGrrrl)

The soft bigotry of low expectations.  The Pioneer Press Has Crowned Its Sexiest Accountant(s)  (Going Concern)

 Now he tells us.  Jailed tax cheat’s warning: Just ‘don’t do it’ (TBO.com)

 

 

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