The Iowa House of Representatives passed without changes SF 106, the bill updating Iowa’s income tax to incorporate last month’s Fiscal Cliff tax bill. The bill conforms to all federal changes except for bonus depreciation, which remains unavailable on Iowa returns.
Now the bill goes to Governor Branstad. The Governor vetoed a prior conformity bill because it adopted bonus depreciation; he is expected to sign this one.
The early passage of these bills is a relief to taxpayers affected by the federal changes. Now they know how to file their Iowa 2012 returns. Among the items affected by the bill:
– Section 179 depreciation. Iowa now adopts the federal $500,000 limit for 2012 and 2013.
– IRA charitable distributions up to $100,000
– The above-the-line deductions for educator expenses and college tuition
– The optional deduction for state and local sales taxes.
No word yet on when the Governor will act on the bill.
West Des Moines denture-maker pleads to tax evasion. The West Des Moines Patch reports:
Charles R. Barbour, who entered his plea to one count of income tax evasion in a proceeding before U.S. Magistrate Judge Celeste F. Bremer, will be sentenced on May 9.
In it, Barbour admitted that he understated tax year 2006 income in the amount of nearly $81,000, tax year 2007 income in the amount of nearly $51,000, tax year 2008 income in the amount of nearly $52,900 and tax year 2009 income in the amount of $11,300.
From the plea agreement it appears that the charges involve diversion of business receipts from his denture-making business to a personal bank account, and improper deductions:
Barbour willfully claimed false business expenses on the Schedules C for tax years 2007, 2008 and 2009; deducting internet and cable expenses for his residence as advertising expense; rent payments on a condominium and an apartment as rent expense; loan repayments to his parents as equipment repairs and maintenance expense; payments for his daughter’s medical expenses as medical supplies; payments to a local country club as professional development; and child support payments as professional fees and contract labor expenses.
The standard IRS audit programs for business expenses look for personal expenses disguised as business expenses, and an experienced examiner knows where to look. That makes sneaking personal expenses onto a business return a bad bet — and if you make a habit of it, it can become a much bigger problem than back taxes and penalties.
Tyler Cowen, Will health insurance premia rise for young males?
Look at Table 1– where it says that the average premium for young healthy males will go from $2,000 to a little over $5,000. Yikes.
When the largely-optional penalty for not buying insurance is $695, it doesn’t seem likely that healthy young males will buy a lot of insurance — especially when they can buy it when they get sick because of the rules against pre-existing condition limits. It’s hard to imagine this working well.
Jack Townsend, Article for Canadians with Unreported Canadian Retirement Plans and Accounts. More news from the foreign tax compliance jaywalker-shooting front.
Linda Beale, Soon-to-be Google litigation with IRS over 2003-4 returns? A disclosure in their 10-K.
Kaye Thomas, Gaps in Cost Basis Reporting. Don’t just take as gospel what the broker tells you.
Ellen Kant, Super Bowl Loophole (Tax Policy Blog). On how the hugely-profitable NFL, and other sports leagues, are tax-exempt.
Elaine Maag, The Immigration Debate: Another Reason We Ought to Separate Work and Family Credits (TaxVox).
Have you ever tried to shoot one? Oh, I thought you said “Quail.” There Is Nothing Perplexing About Quill (Cara Griffith, Tax.com):
By saying that Quill created a perplexing inquiry gives credence to the idea that states can get around the physical presence requirement, but they can’t.
Russ Fox has a new book out, Tax Strategies for the Small Business Owner. Cool!
Yeah, that will solve the deficit. Obama repeats call to end tax break for corporate jets, and more. (Patrick Temple-West, Tax Break). I’m sure that will be wonderful news at the HondaJet North Carolina production facility that is newly up and running.
TaxGrrrl, Taxpayer Alleges IRS Agent Offered Sex In Exchange For Lower Tax Penalties On Audit. Sounds far-fetched, but based on what I have seen of IRS agents, it would be a human rights offense.
You expected “Days of Our Lives?” The Situation Around the Registered Tax Return Preparer Program Has Become a Really Bad Soap Opera (Going Concern)