Thursday, October 21, 2010

“Don’t be evil” Is paying low taxes evil?

News came out the Google, inc. only pays taxes at a 2.4% rate. The corporate tax rate in the US is 35% which is higher than almost all the other industrialized countries. So an industry of reducing your taxes is the game many companies play. These games use to be played by individuals in the U.S. when tax rates were as high as 70%. The tax rates were lowered to 39.6 (later to 36%) under Reagan but the loop holes were also taken away.

In the Bloomberg article ( the flow of franchise fees to Ireland, then the Netherlands and finally ending up in Bermuda create the 3.1 billion dollar reduction in taxes for the technology giant. By the way the whole flow of income was approved by the IRS in 2006 so there is nothing illegal about this under current U.S. tax laws.

The motto of Google is “Don’t be evil” and the article challenges that by including a quote by a professor of accounting, “flying a banner of doing no evil, and then they’re perpetrating evil under our noses,” can only be a legitimate question if you believe that all income is the governments.

When Google pays low taxes, it frees up more money for investment (paying other people and increasing their taxable income), increase dividends (which are taxable) or just pay their own employees more money (more taxable income) so it will eventually make its way to an income tax return and the government, just not in a way that progressives or anti-corporate types would like it to.

Friday, October 8, 2010

Obtaining Copy of Return or Transcript

The IRS has a new toll-free number for requesting free transcripts - 800.908.9946. You can follow the message prompts, or complete Form 4506T, Request for Transcript of Tax Return, and mail it to the address listed in the instructions. To obtain an exact copy of a previously filed and processed tax return with attachments (including Form W-2), complete Form 4506, Request for Copy of Tax Return, and mail it to the address listed in the instructions, along with a $57 fee for each tax year requested. Copies are generally available for returns filed in the current year and previous six years.

Army Post Accounting always provides a copy of your tax return with your fees. If you need an extra copy there is an additional $20 charge (W-2's included)


Monday, October 4, 2010

Changes in business tax laws for 2010

On September 27, President Obama signed into law H.R. 5297, the Small Business Lending Funding Act. The tax title of this bill, the Small Business Jobs Act of 2010 (the Act), includes a number of important tax provisions for businesses large and small, and changes for individuals as well. The following are some of the more notable provisions:

  • Doubles the §179 expensing limit to $500,000, phasing out at $2 million for tax years beginning in 2010 and 2011, and allows the expensing of up to $250,000 of leasehold, retail, and restaurant improvements.
  • Reinstates 50% bonus depreciation for qualifying property acquired and placed in service in 2010, and authorizes an increased first-year depreciation limit by $8,000 for passenger autos that are "qualified property."
  • Doubles the allowable tax deduction for start-up expenditures to $10,000.
  • Removes cell phones from the definition of listed property.
  • Allows self-employed individuals to deduct health insurance costs in paying their 2010 self-employment tax.
  • Allows small businesses to carry back general business tax credits to offset their taxes from the previous five years, and count those credits against their Alternative Minimum Tax (AMT) liability.