Direct Tax Code Changes In Transfer Pricing Regulations
By: Wilmer Irwin | Posted: 18th February 2011
We're going to discuss the proper setup of sales tax items and codes; proper setup of customers for sales tax reporting; the difference between sales tax items and sales tax codes; using sales tax codes; and running sales tax reports in QuickBooks.
Personally, I find the tax codes to be absolutely out of control, too hard to decipher, and just plain insane. No one likes to pay taxes, and yet, there are things we need, of course if our tax money is wasted this is problematic. And further, I like what Forbes has to say about a simplified flat tax or perhaps a use-tax which is fair for all concerned, but I am worried that no matter what the percentage of flat tax that is instituted in that case, well it would always go increase in the future.
In the revised DTC, there is no change in the limit of deductions from taxable income for savings in specified investments. In the original draft, the limit has been proposed to be revised to 300,000 from the present limit of 100,000 (under section 80C). However, it should not make much difference to the Senior Citizens, as the tax incentives for savings are basically meant for the youngsters (so that they can save for their retired life) and not for the retired persons who have to live on their savings of lifetime.
This initiative will be welcome to those that have overpaid, but for those unfortunate people having a bill for underpaid tax from 3 years ago would be an unexpected shock and certainly not something anyone wishes to get, especially as we approach the festive season.
Apparently people are now beginning to receive bills for any underpaid tax due for the period between April 2007 and March 2008. This is likely to go on for some time with estimates of clearing the backlog running into 2012 and perhaps later. It's certainly a worrying time, especially with the current economic climate.
If your everyday vehicle is a mom-van that hauls children from place to place, and your business requires that you transport clients, business associates, and/or materials from point A to point B on a regular basis. Your business may require a different form of transportation. If you purchase a vehicle specifically for your business, this vehicle becomes a depreciable asset to the company.
The penalty provision has been made more stringent. Penalty for non filing of accountant report has been increased from 50K to 200K. Penalties for non maintenance of documents have been increased (50K to 200K) and non furnishing of documentations (5K to 100K).
In 2000, tax returns with an AGI of over $200,000 received 26.7 percent of all income, and they compensated for 47.3 percent of all income taxes. That's a tax-to-income ratio of 1.79. Nevertheless, four years later, their income had taken a fall from 26.7 to 25.5 percent, but their taxes had increased to 50.0 percent. That brought the ratio up from 1.79 to 1.96 in 2004.
SO WHATS THE CATCH? Only that your newly acquired vehicle will need to be used more than 50% of the time for business purposes. Heres a little more background so youll understand how the Section 179 break works. Ill walk you through steps to complete this process and hopefully reduce your tax liability for THIS YEAR.
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Tags: economic climate, 3 years, business associates, forbes, senior citizens, lifetime, estimates, youngsters, backlog, festive season, taxable income, sales tax, tax money, tax incentives, quickbooks, dtc