While it still remains to be seen if the new tax proposal from House republicans ever gets through the Senate and reaches the president, many taxpayers are still concerned about the consequences. One of the largest groups in this category is homeowners in California, not to mention builders and realtors, as well.
So what’s the reason for the concern? There are actually several. For starters, the House bill would hurt any taxpayer that itemizes his or her deductions and uses the mortgage interest deduction. That’s because that deduction is now in question under the new proposal. The threshold would be reduced from $1.1 million to $500,000.
The bill would also completely eliminate this deduction for vacation homes, while the Senate bill would actually keep it. And lastly, while the House would cap the property tax deduction at $10,000, the Senate proposal would completely cut it.
Because California has such high-priced housing already, these limits and changes would hurt many residents even more. “In a high-priced state where we’ve already got a shortage of homes for sale, this simply traps people in their homes longer,” said Steve White, a Studio City broker who is president of the state Realtors association. Fewer people will move and that will just exacerbate the home shortage.
This is sure to be a hot-button topic for lawmakers as they continue trying to move this bill through. However, many California residents are already pushing their congressman to vote against it.
Now that the House has released its tax reform bill and passed it, the ongoing war of words is really ramping up. Of course, opposing sides both have a lot to say regarding how the bill will affect taxpayers, including which taxpayers it will benefit and which ones it will hurt. That’s a debate that won’t be settled until the bill actually passes, if it ever does.
Recently, Treasury Secretary Steve Mnuchin, claimed that the purpose of the bill is to make simplify things for taxpayers. He also said that the only taxpayers that will see an increase in their tax bill would be those that make a million dollars or more. The plan is already being met with opposition from high-tax states like California and New York, which would really get pinched by the loss of the state and local tax deduction.
Others are calling the tax bill a tax hike for the middle class. And several studies have already come out against Mnuchin’s claims. For one, the Tax Policy Center stated that most of the benefits would accrue to the top 1 percent by 2025. The Center said that would mean upper-middle-class taxpayers would see an increase and the middle and lower class would see minimal benefits.
This is yet another arguing point between both sides of the issue, the result of which remains to be seen. Mnuchin said he believes the bill will reach the president before Christmas.
There are only seven states in the U.S. that don’t charge income tax, and Washington State is one of them. However, that all changed earlier this year, for some taxpayers in the state, when lawmakers in Seattle created what amounts to being an income tax on the wealthy.
Those who favor the tax say it’s necessary in order to help fund many of the city’s livability issues, such as public transportation, and affordable housing.The new law only applies to individual who make more than $250,000 a year and to couples that make more than $500,000 a year. The 2.25 percent tax also only applies to the portion of their income over those amounts. So far, the city is not collecting the tax even though it has been approved.
Those who oppose the law have taken matters into their own hands by taking the city to court. By approving the tax, Seattle went against a state Supreme Court precedent from the 1930’s, when the government amended the state Constitution to include an extremely wide definition of property.
Rob McKenna, who is representing the plaintiffs in the lawsuit, says there is “another clause in the state Constitution, which mandates all property be taxed the same.” Therefore, all income should be taxed uniformly. Thus, because state law doesnot allow an income tax, cities are not allowed to impose one.
And so far, the court agrees. A King County Superior Court ruled last week that the tax is illegal. However, the battle is not over. The city has already said it plans to appeal the decision to the state Supreme Court, where the matter was expected to end up all along.
By Steven Singer CPA, Partner at GROCO, email@example.com 510-797-8661
With the advent of artificial intelligence (A.I.) and machine learning, it’s time to re-evaluate how we hire, train and lead our employees.
The ability to do a job faster or cheaper will no longer be what sets an organization apart from its competitors, but rather the ability of organizations and its human component to critically and strategically think for the organization and its customers.
With improved critical thinking, machine learning and A.I., an organization will be able to move faster and more effectively than its competitors making it both more interesting and challenging for its human workforce and valuable to its customers.
In an A.I. environment, co-workers will be expected by its customers and the organization to work in teams, improve communication with customers, come up with original thoughts and strategies, explain how A.I. came to its conclusions and implement their strategies. Objectives of the organization and its customers probably will not change (e.g. enhanced customer and trusted relationships, bottom and top line growth). However, the way the organization uses its human components will change dramatically.
What does it mean to critically think? According to the Foundation for Critically Thinking.org you and your co-workers should be able to:
How to go about implementing and dealing with co-workers who are unfamiliar or unable to cope with the new paradigm?
Stay tuned for part two!
Group decision making is a topic that has spawned many academic studies, books, and white papers. It is never easy to get a group of human beings to make a decision together. It’s hard enough for a single individual to make a decision! Add to the mix more people with their cultural differences, values, needs, desires, positioning, and familial relationships and you’ve got a natural recipe for deadlock. We are often asked what the best way is for families to make important decisions together. To answer this, let’s consider some of the overarching goals and pitfalls to avoid when making any major decisions together:
Academia has given us a multitude of models for decision making in organizations and families. Here are six decision making styles frequently used in family businesses.
Most people, when asked, will say that majority rule is the most fair and proper way to make decisions. Americans naturally believe that our democracy is superior to any other political system ever devised so why not use it in our family? Yet consider how you’d feel after a presidential election if your candidate didn’t win. You’re likely to experience a range of emotions ranging from mildly annoyed to furious.
Now, imagine you’re in the minority in a family or family business decision that affects you on a deeply personal level. What if a decision you strongly disagreed with was forced down your throat against your will? How well would that work in a family setting? Are you starting to see the problem with autocratic and majority decision making styles? Some people or groups of people are inevitably going to be disappointed.
Experience has shown that the best way to make decisions in families is to choose Style #5: Consensus. “What?!”you might be thinking. “How can anyone get anything done? I could never get my family to agree on what to have for dinner,let alone the direction of our business.”Without a doubt, building consensus in a family takes a lot of time, effort, and requires patience and good communication skills, but it’s very much worth the effort!
Consensus is the only one of the five decision making styles that simultaneously builds unity, maintains unity, requires unity, and creates a family of listeners and collaborators.
Nordstrom is a well-known family business that has achieved tremendous success through the use of a consensus style of decision making. For the last 69 years they have had co-presidents, a leadership method that requires unanimous decisions in order to move forward. Given Nordstrom’s history of success and strong brand, that’s quite a recommendation for the consensus style, don’t you think?
‘Who should get a voice in family decision making?
Here are some recommended qualifications to consider when deciding if a family member is ready to be included in major family business decisions:
• Are they emotionally mature?
• Do they contribute to the process?
• Are they flexible?
• Are they informed?
• Are they prepared?
• Are they trusting and trustworthy?
• Are they able to put needs of the group ahead of needs of self?
As you can see, armed with the right tools and the right attitude, family decision making does not need to be contentious. To the contrary, it can be
something that unifies your family while it facilitates decisions that increase the long-term success of the family and its enterprises.
Everyone wants to make more money. For many that means picking up a side job to earn a little more cash. There are literally hundreds of side jobs out there but most are only good for a few extra dollars. However, there is a danger to doing work on the side if you’re not careful.
If you work as an employee, then you don’t have much to worry about. But if your side gig is something you do as a self-employed worker, then you need to be aware of the tax implications. As it turns out, this is one of the biggest problem areas for people who work side jobs, especially younger people.
The problem is many Americans aren’t reporting this extra income. In fact, according to a recent study from Finder.com, roughly a fourth, 69.8 million, of all Americans who make money from a side job are not reporting it.
That adds up to a large junk of change according to the IRS. The tax agency claims that tax evasion costs the government more than $450 billion a year. Ofcourse, that figure is not all from side job money not being reported. But, the IRS says nearly $215 billion of it is.
That is a lot of money, which is why the IRS takes reporting your side job income seriously. If you get caught not reporting this extra money it could cost you. The IRS can charge you as much as 5 percent each month every month your late paying on those taxes. Furthermore, if you don’t report and pay an accurate amount you could end up paying additional penalties and interest, as well face criminal charges.
So if you walk dogs, repair cars, babysit, do a little writing on the side, or anything else to make a few extra bucks, be sure you report that income to the IRS.
Tax reform is coming. At least that’s what we’ve been led to believe for the better part of a year now. Ever since Donald Trump won the election last November, most of the nation has been expecting tax reform. Here we are a year later and we’re still waiting for the president and his administration to deliver on that promise.
However, while it would seem most people favor tax reform, according to recent numbers being floated around, the majority of Americans aren’t in favor of the president’s tax proposals. A new CNN poll reports that 52 percent of Americans oppose the president’s proposals and just 34 percent are for it.
The problem is, according to the numbers, a mere 24 percent of Americans believe they will be better off if the president’s proposals become law. It gets worse for Trump, as 31 percent actually think their tax situation would get worse under the president’s plans.
Americans also feel that the proposals would hurt the country economically, as a whole, with 35 percent saying things would get worse and only 31 percent believing things would improve.
Some of the proposals that have been thrown around include consolidating the number of tax rates to just three instead of the current seven. The president wants to increase the child tax credit and the standard deduction, and axe the alternative minimum tax.
Unless you happen to be a sloth, everyone wants to be more productive. Productivity is one of the keys to personal and careersuccess. The problem is, many people just aren’t willing to do what it takes to become more productive. Thus, being productive is easier said than done. However, if you really want to make changes, here are some bad habits you need to let go of.
Do you like to surf the Web? Of course, who doesn’t? Unfortunately this is a huge time-killer for a lot of peopleespecially if you do it every time you get animpulse. When you’re busy working on something important and you stop for a quick “surf”, you lose valuable time and you become less productive.
Is it time for another meeting? Meetings seem important on the surface, but how many meetings are really that useful? They typically take up too much of your valuable time, which you could be using to do more important things, like actual work. To be more productive, set a time limit for your meetings and stick to it.
We all love email and it’s a great way to get work done. However, email can be a huge distraction, as well. When you’re working on something important don’t let a new email distract you from your current task. In most cases, the majority of your messages can wait.
Avoid being a perfectionist. If you’re preoccupied with getting everything exactly right, then chances are you will never complete any projects. In some cases, you might not even start them. No one is perfect and you don’t have to be perfect, either.
It may not be easy, but letting go of some of your bad habits will help you become more productive.