HURRICANE PREPARATIONS

    This post, due to the nature of the topic, will be short.

    In light of Hurricanes Harvey, Irma, and Jose I want to say, first of all, that my heart goes out to those who have dealt with or are about to deal with these catastrophic events.

    A street with a 'Hurricane Evacuation Route' sign.

    Here are a couple of tips that may be of help to you.

    For individuals and businesses in the affected areas, there’s not much time left for preparations. There are two things you can do–or have your kids do:

    1. Take pictures of the interior of the house and important or valuable items, then take pictures of the exterior.
    2. Either take your computer with you or download your most important files onto a flash drive. Accounting records, business data, etc. as well as any personal information such as bank and brokerage account numbers, etc. In the future you should consider backing up the computer to the cloud or to an outboard hard drive (if you don’t already). Make sure you put the flash or hard drive in a waterproof container before leaving the house.

    Again, my heartfelt best wishes to those who have been affected by these hurricanes or who will be dealing with life changing hurricanes in the near future.

    Bruce

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    Bruce – Your Host at The Tax Nook

    Our Firm’s Website: SolidTaxSolutions.com.

    Other Social Media Outlets: Facebook.com/SolidTaxSolutions.

    Twitter: Twitter.com/@SolidTax1040 (BTW, We Follow-Back).

    Categories: General 'Thoughts'

    Considerations for Small Business Owners in Voting for a New U.S. President.

    After a long, contentious, and heavily covered race to the U.S. presidency, the 2016 campaign cycle is coming to end in only a few weeks. Chances are you’ve been overloaded with news and commentary and—whichever candidate you support—you’ll be somewhat relieved after the results are announced on November 8th.

    A side-by-side picture of Hillary Clinton and Donald Trump

    But that doesn’t mean you should tune out until then. Between the candidates’ platforms, tax plans, and stances on topics such as healthcare, immigration, and consumer protection, there are important issues at stake that may directly affect your business and industry.

    Which Election Issues Matter Most to Entrepreneurs?

    As a business owner, you have several political agenda items to consider before you vote on Election Day:

    What Will the Proposed Healthcare Reform Mean for Your Small Business?

    The Affordable Care Act, signed into law in 2010 and commonly referred to as “Obamacare,” made healthcare a focal point of political discourse—in large part because of its effects on America’s businesses. Some business owners support the Affordable Care Act for providing employees with mandatory insurance coverage, while others complain that the law places an excessive financial burden on employers.

    Have You Analyzed Each Candidate’s Tax Plan?

    Although virtually every presidential candidate in recent history has pledged to make taxes more advantageous to small businesses, tax plans vary wildly by administration when it comes down to the details. A business owner would be wise to scrutinize each candidate’s proposals to determine:

    • The tax breaks and incentives for business owners
    • Which types of taxes will be increased
    • Whether income brackets and business categories are changing, and if so, to what extent

    How Will Federal Regulations Impact Your Industry?

    From safeguarding consumer privacy to providing accommodations for disabled employees, companies are subject to all kinds of federal regulations, though some industries are more regulated than others. The two major parties fundamentally disagree about the scope and authority of these regulations and the agencies in charge.

    The Consumer Financial Protection Bureau (CFPB), which lawmakers established in 2010 as part of the Dodd–Frank Wall Street Reform and Consumer Protection Act. Republicans believe the CFPB has too much unchecked power over financial institutions, while Democrats argue for the agency’s necessity and seek to sustain it—if not expand its influence.

    Where Do You Stand With Minimum Wage?

    Several states have recently passed legislation increasing state minimum wage, and the subject is a hotly debated one in Washington as well. A federal minimum wage hike is not simply an issue of cost versus savings, but large-scale economics and government intervention.

    Some business owners advocate for raising the minimum wage, citing that better pay increases productivity and reduces turnover. Others contend that a $12–15 minimum wage would put their organizations out of business or cause them to lose their competitive edge domestically and globally.

    What About Federal Loan Availability for Rising Entrepreneurs?

    Do you believe it should be easier for business owners to borrow credit? A “yes” or “no” answer places you firmly on one side or the other of the political spectrum. The parties’ stances on banking regulations and Wall Street reform tell you a lot about what the availability of loans under their administrations would look like, but there’s more to the story than that.

    Aside from the candidates’ promises to promote small business growth, the various outcomes of the election could have significant repercussions on the economy, as consumer attitudes shift and lenders become more or less confident as a result.

    Does Your Small Business Depend on International Trade?

    Speaking of broad economic impact, each candidate’s attitudes on international trade could weaken or strengthen U.S. businesses, depending on your perspective. It may be easier or more difficult during the next few years to establish overseas corporate partnerships, reach consumers in different countries, and sell products and services all over the world.

    What’s Your Take on Immigration & the Startup Visa Proposal?

    According to the Partnership for a New American Economy, over 40% of Fortune 500 companies were founded by immigrants or children of immigrants. America’s policies on immigration fuel innovation and competition, which aren’t necessarily net-positive or net-negative effects for each and every company.

    So, while border control is a deeply personal issue for many on all sides of the debate, there’s a business case to be made either way—so long as you can differentiate the facts from the rhetoric.

    Where Can You Go for Detailed Information About Each Candidate?

    In the next few weeks, take the time to educate yourself on each candidate’s positions. Here are a few resources that will help you start researching before you cast your vote:

    If at any point during your research you wonder how certain regulations and tax codes will affect your specific business don’t hesitate to contact us.

    So, what other small business issues would you like the candidates to talk about?

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    Bruce – Your Host at The Tax Nook

    Our Firm’s Website: SolidTaxSolutions.com (or just click on the icon on right sidebar of this page).

    Other Social Media Outlets: Facebook.com/SolidTaxSolutions (or just click on the icon on right sidebar of this page).

    Twitter: Twitter.com/@SolidTax1040 (BTW, We Follow-Back).

    Politics! You’ve Got to Love It.

    Running for office presents candidates with a number of opportunities to slip up. This is particularly a problem when the issue is a complicated one. As an example, let us take a look at taxation (surprise. surprise, surprise). Taxation can present traps for unwary candidates who are not careful with how they articulate their position.

    Recently, there has been a call for exempting the value of Olympic medals from gross income. Some people think it’s wrong to require winning athletes to pay taxes on pieces of metal symbolizing their achievements. I will stay neutral on this, but the point of this post isn’t whether an Olympic medal exemption makes sense. It’s to point out what happens when that issue becomes campaign fodder.

    Senator Charles Schumer of New York, a Democrat, has introduced legislation that would add an Olympic medal exemption to the Internal Revenue Code. According to this news story, his Republican opponent, Wendy Long, has criticized both Schumer and the proposal. She called the proposal “another example of cronyism in the tax code.” She went on to say, “It makes no sense. My contention is that giving tax breaks as he does to his favored ones – the Broadway stars, the Olympic medalists, the hedge funders – means that a greater burden is placed on the average New Yorkers who toil in obscurity but work just as hard and are as deserving of a tax break.” She made mention of members of the military, asking “Where’s the tax break for them? Even if they come home victorious and have won a war, instead of the 400 meter freestyle, no tax break for winning?”

    So, three thoughts ran across my mind when I read that article. All three, thoughts, kind of “didn’t make sense”.

    First, the Broadway tax break to which Long apparently was referring is not a tax break for Broadway stars. It is a tax break for those who invest in live theater productions, making available to them the same tax break already in existence for television and movie productions. On top of that the measure in question was the extension of the tax break, which had been enacted previously with an expiration date. I’m not necessarily a fan of this particular tax break, but I’m even less of a fan of a tax break that treats television and movie productions more favorably than live theater. What matters is that this tax break accelerates tax deductions for investors who, Ms. Long states, are not members of “….the middle class that Schumer pretends to champion.” Therefore it is a tax break pretty much for the wealthy among us, a tax break in line with many others supported by the political party under whose flag Long is running. It would be great if she made it clear that she opposes the long-standing pattern of Republican tax breaks for the wealthy, but if she is elected she might find herself at odds with at least some of her political colleagues in the Senate. But still, describing the tax break as one for the actors casts the issue in the wrong spotlight.

    Second, the tax break for hedge funds has been attacked primarily by Democrats and although some Republicans have joined in the criticism, perhaps seeking something that dresses them in populism, most Republicans and their supporters have opposed any attempt to change the tax break. Some even demand lower taxes for carried interest, as described in this article. Again, it is great to see another tax break for the wealthy coming under attack from a Republican, but what happens to Long’s Senatorial career if she is elected? And what happens to Schumer, a Democrat, who breaks ranks with his party and opposes elimination of the tax break for carried interests? Politics is a strange, wacko world and, in this instance, the two candidates are taking positions contrary to their labels. Perhaps they should switch parties? Hmm!

    Third, there exists a variety of tax breaks for members of the military. Long is playing on emotions when she suggests there are no tax breaks for them. Internal Revenue Code (IRC) Section 112 excludes from gross income compensation paid to members of the Armed Forces for serving in a combat zone, or was hospitalized on account of injuries incurred while serving in a combat zone. IRC Section 122 excludes from gross income certain portions of retirement pay way too complex to describe in one sentence. IRC Section 134 excludes from gross income the value of most allowances or in-kind benefits provided to a member or former member of the Armed Forces. I am not aware of any instance in which the IRS has required a member of the Armed Forces to include in gross income the value of any military honor, medal, badge, bar, or ribbon awarded to that person. Making it appear as though there are no federal tax breaks for members of the military does not nurture confidence in a candidate’s tax policy prowess.

    So, I feel that there are far better ways to criticize an exclusion for Olympic medals than to confuse the issue with references to tax breaks for Broadway stars, hedge funds, and members of the military. The merits, or lack thereof, of an Olympic medal exclusion are, and should be, a separate matter.

    Just my 2 cents.

    What do you think?

    ___________________________________________________________________________________________________

    Bruce – Your Host at The Tax Nook

    Our Firm’s Website: SolidTaxSolutions.com (or just click on the icon on right sidebar of this page).

    Other Social Media Outlets: Facebook.com/SolidTaxSolutions (or just click on the icon on right sidebar of this page).

    Twitter: Twitter.com/@SolidTax1040 (BTW, We Follow-Back).

    Categories: General 'Thoughts'