Five on Fridays: (Hypothetical) Office Holiday Party Tax Conversations
Today marks the first day of December and the start of office holiday party season.
For today's Five on Fridays, STLTaxLawyer.com provides a set of 5 hypothetical tax-related conversations you may hear (hopefully not) during your holiday bash:
Cindy: “Did you see rapper DMX pleaded guilty to tax evasion this week?”
Jim: “Oh no, what did he do?”
Cindy: “Well, it looks like he didn’t file tax returns for several years or pay the taxes he owed from all his record sales during his big run in the early 2000s.”
Jim (chuckling): “I guess in his famous song 'X Gon Give it To Ya,' he didn’t mean paying taxes to the IRS.”
Ned: “Boy, I sure donated a bunch of money to all my favorite charities on #GivingTuesday (#humblebrag).”
Bob: “Good for you, Ned. Hopefully you got receipts for all your donations so you can substantiate your tax write offs if you're ever audited by the IRS.”
Ned (thinking to himself): “I didn't donate to anyone, so I don’t have receipts. Silly Bob.”
Jane: “Did you see a federal judge in California ordered Coinbase to give the IRS account information for all of its customers who have traded more than $20,000 worth of virtual currencies on the site?”
Jack (a Coinbase user who hasn’t reported any of his Bitcoin transactions on his last two tax returns): “Sorry (walking away), I need to go contact Mark Milton via STLTaxLawyer.com right away.”
Heather: “Wow, the stock market is going through the roof. I am so mad I sold off my Amazon stock earlier this year for what I thought was a big gain. If I would have waited, my portfolio could be even bigger.”
Joe: “It could help soften the tax blow if you sell off some of your loser stocks before the end of the year to offset your Amazon gains.”
Heather: “Great tip! Thanks, Joe!"
Don: “Not to get political, but do you happen to know the main differences between the House and Senate tax reform plans? It’s pretty confusing.”
Nancy: “From my understanding there are many similarities (including reducing the corporate tax rate from 35% to 25%), but there are a few key differences worth noting:
1) The House Bill reduces the number of tax brackets from seven to four; the Senate Bill keeps seven brackets.
2) The House Bill eliminates the itemized deduction for state and local income taxes, but keeps the deduction for state and local property taxes (capped at $10,000). The Senate Bill doesn't touch state and local tax deductions.
3) The Senate Bill eliminates the ACA individual mandate penalty for not having health insurance; the House Bill doesn't address this.
4) The House Bill eliminates the estate tax by 2024, whereas the Senate Bill keeps it. Both bills double the estate tax exemption to $11 million."
Don: "Good to know, Nancy. I'm sure the competent folks in Washington will have the differences sorted out so I can have my tax cut in time for Christmas."