The Washington Wire Archive - The S Corporation Association

The End is Near (of the First Session)

Congress returns Monday with lots to do and just three weeks to do it. Here’s the list of must-pass items we’ve identified:

AMT Patch
Tax Extenders (Including the S Corporation Charitable Provision)
S-CHIP Reauthorization
All the Spending Bills
Increase Doctor Payments under Medicare

That’s enough to fill two months of session, let alone 21 days, but there’s more. In addition to these items that most observers agree must get done, there is also a long list of priorities that the majority would like to address before they go home for the holidays, including an energy bill, an agriculture bill, and more.

How will it all work out? …

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admin2019-02-06T18:43:58+00:00November 28, 2007|

Death of Death Tax Repeal?

Yesterday’s Senate Finance Committee hearing on the estate tax resulted in some good theatrics, but little in the way of comfort to those family businesses attempting to plan their way past the tax.

Berkshire Hathaway’s Warren Buffett, the world’s third wealthiest man, was on hand to lend his support to the tax. Mr. Buffett argued that “dynastic wealth” is on the rise, putting lower income Americans at a great disadvantage. The estate tax is necessary, he observed, to help break up these large concentrations of wealth.

Mr. Buffett failed to recognize the impact the tax has on family-owned businesses. Nor did he …

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admin2019-02-06T18:43:59+00:00November 15, 2007|

Higher Tax Rates on Horizon

We’ve had numerous conversations in the past couple of weeks with S corporation owners about the tax outlook for the next couple of years, and it’s becoming apparent that the S-Corp community is underestimating the threat of higher tax rates on the horizon. With that in mind, here’s our best assessment of what to worry about, and when to worry about it.

First, in case you have not heard, all the major tax relief provisions enacted since 2001 will expire at the end of 2010 unless Congress acts to extend them. For S corporations, that means higher tax rates on your …

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admin2019-02-06T18:43:59+00:00November 7, 2007|

Taxpayer Expectations and the Rangel Surtax

We have had a chance to digest a bit more of the Rangel bill introduced last week.

There was a lot to digest. Repealing section 199, LIFO, and IC-DISC, while extending the depreciation period for intangibles will all adversely impact our members to one degree or another. The fact that these tax increases are being used to offset a rate cut for C corporations doesn’t help matters.

Focusing on the individual side, the bill would substitute a new four-percent surtax on individuals and businesses earning more than $150,000 in order to offset the cost of repealing the individual Alternative Minimum Tax (AMT).

Whether …

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admin2019-02-06T18:43:59+00:00October 30, 2007|

Chairman Rangel Proposes Payroll Tax Increase on Small and Family-Owned Businesses

When Congress created the S corporation in 1958, the IRS ruled that only S corporation shareholders who are active in their business should be subject to payroll taxes, and then only on amounts received for their labor.

Fast forward fifty years. While the payroll tax has grown dramatically, the application of payroll taxes has always applied to labor income only – not capital income.

Last week, all this changed. House Ways and Means Committee Chairman Charlie Rangel [D-NY] introduced legislation that turns 50 years of tax policy on its head.

The bill, the Tax Reduction and Reform Act of 2007, would lower …

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admin2019-02-06T18:43:59+00:00October 29, 2007|