October 15, 2015
October 15th, The True End of Tax Season
So its October 15th, the last day that 1040’s and partnership returns can be filed inside the extension period. I just finished my own return. (Mine is that last one that I do every year.) Another tax season is officially, “in the can.” Before I go to my favorite restaurant to further support taxation through the consumption of food and especially beverage, let’s take a minute to review this taxation cycle.
More Middle and Upper Income Families are paying more tax
The Obamacare Legislation, ridiculously name the Affordable Care Act, has been a double wammy to most American Business Owners. It raised six individual taxes to pay for all of the uninsured Americans, and added the highest bracket in recent history, 39.6%.
The second side of this is that the costs of healthcare have skyrocketed to pay for the roughly 40 million Americans that were uninsured. Now we’re being told that healthcare costs are estimated to increase yet another 20% in the coming year. How is any of this reasonable to middle class Americans and Business Owners? Did any of us ask for these additional burdens?
And very few people are even getting a deduction for the increased healthcare costs. Part of the Obamacare legislation was to increase the Medical and Dental threshold of deductibility from 7.5% to 10% of your adjusted gross income. The only families that seem eligible for the deduction have incomes so low that they are exempt from having to pay for coverage in the first place.
The Economy continues to flounder
We do the accounting and tax work for about 200 entities and their ownership. There has, in my recollection, never been a greater disparity between the have’s and the have not’s. These businesses are either doing extremely well, or not well at all. Every business seems to be either an “A” or a “C”. I’ve never had so many tax cases being referred into my office as in the last 12 months. It seems that as the economy and customer’s ability to earn reasonable revenues has changed, people are not paying their taxes.
Unfiled Returns and Compliance Issues
I have never before had so many customers that don’t get their work in timely. There has always been a percentage in my firm of Non-Compliant Taxpayers, but never to this extent. It seems like with the worsening economy and increased taxation burdens, more people are voluntarily falling into the Tax Gap. Many customers are so angry and fed up with the current situation that they are dealing with it by not dealing with it at all. No matter what I say or how I try to reason with them, many just don’t respond.
It looks like I will have even more tax cases to handle in the future.
And what will that future bring? It certainly doesn’t look as if the Obamacare Legislation is going anywhere in the future. The Economy certainly doesn’t seem to be getting any better. Compliance issues seem to be on the rise.
I think that I’ll go have a cocktail…
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Chris Amundson is the President of Accounting Solutions Ltd., a full service public accounting firm of Certified Public Accountants and Enrolled Agents handling the bookkeeping, accounting, tax preparation, and audit representation needs of Businesses, Estates, Trusts, and Upper Income Individuals.
October 15, 2015