Accounting Firm Gettry Marcus Shares Two Recently Announced US Tax Reform Proposals - Siouxland News - KMEG 14 and FOX 44

Accounting Firm Gettry Marcus Shares Two Recently Announced US Tax Reform Proposals

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Gettry Marcus CPA, P.C., a leading forensic accounting firm, shares information about two recently proposed tax reform plans

Woodbury, NY / myprgenie.com / ACCESSWIRE / May 05, 2014 / Leading consulting, tax and forensic accounting firm Gettry Marcus CPA, P.C. shares two competing proposals for tax reform discussions.

Tax reform, frequently discussed in Washington, got a boost from two recent proposals, one from the chair of the House tax writing committee and another from the White House. Rep. Dave Camp, R-Mich., chair of the House Ways and Means Committee, released a tax reform bill in late February. In early March, President Obama released his fiscal year (FY) 2015 budget proposals, detailing over 160 tax proposals. Both proposals share some similarities but also key differences.

Camp’s plan

Camp unveiled a sweeping tax reform plan (the Tax Reform Act of 2014) that would leave almost no part of the Tax Code unchanged. Everyone – individuals, businesses, exempt-organizations, government entities – would be impacted in one way or another. Some of Camp’s far-reaching proposals are:

   -  Consolidation of individual tax brackets
   -  Higher standard deduction
   -  Increased child tax credit
   -  Revised treatment of capital gains and dividends with a 40 percent exemption
   -  Repeal of alternative minimum tax (AMT)
   -  Consolidated education tax incentives
   -  Simplified tax return for seniors
   -  Reform of charitable contribution deduction
   -  Modified home mortgage interest deduction
   -  Top corporate tax rate of 25 percent
   -  Reform of rules for depreciation
   -  Permanent research tax credit
   -  Reform of the casualty loss rules

To pay for lower tax rates, Camp’s proposal would repeal many popular current tax incentives for individuals. They include the state and local sales tax deduction, higher education tuition deduction, student loan interest deduction, residential energy efficiency credits, adoption credit, and the itemized medical expense deduction. Many tax-advantage benefits of retirement plans would be curtailed or eliminated. Businesses also would lose many tax incentives, such as the Code Sec. 199 domestic production activities deduction, credits for production of fossil and alternative fuels, and the Work Opportunity Tax Credit. Camp’s plan would also repeal the like-kind exchange rules, the last-in, first-out (LIFO) method of accounting, and reform the rules for the treatment of travel and entertainment expenses. The foreign tax system would also be overhauled.

Camp did not propose to repeal the Patient Protection and Affordable Care Act. Camp did, however, propose to repeal the Affordable Care Act’s medical excise tax and prohibition of using health FSA dollars for over-the-counter medications. Camp has supported separate bills to delay the Affordable Care Act’s individual mandate but did not address this in his tax reform plan.

Obama’s proposals

President Obama’s FY 2015 budget renews a number of past proposals and makes some new proposals. New proposals include significant enhancements to the child tax credit and the earned income credit. President Obama did not go so far as Camp to propose reducing the number of individual tax brackets, but he did call for reducing the value of certain exclusions and deductions for higher income individuals and imposing a minimum tax rate of 30 percent on individuals with adjusted gross incomes above $1 million. For homeowners, the President proposed to extend the now-expired exclusion for cancellation of certain home mortgage debt. In the education area, the President called on Congress to make permanent the AOTC.

As in his past budget proposals, President Obama also signaled his willingness to reduce the corporate tax rate– but businesses would need to give up some tax incentives in exchange. These could include many of the so-called business tax extenders, such as special expensing rules for television productions, and environmental remediation. The President did propose to permanently increase Code Sec. 179 small business expensing to $500,000 with a $2 million investment limit. However, bonus depreciation would not be extended.

Outlook

Several of the President’s proposals are similar to ones from Camp. The President called for repealing the last-in, first-out (LIFO) method of accounting and many fossil fuel preferences. A new proposal would limit the amount of capital gain deferred under Code Sec. 1031 from a like-kind exchange of real property to $1 million per taxpayer per year, effective for exchanges completed after December 31, 2014. Both the President and Camp proposed to make permanent the research tax credit. They differed significantly on which other temporary incentives to continue or eliminate.

The GOP-controlled House is not expected to take up many of President Obama’s proposals, with the possible exception of some tax administration changes. The President’s budget received a more enthusiastic response from Senate Democrats, but passage in the Senate requires a supermajority of 60 votes, which Democrats lack. The outlook for Camp’s proposals is equally murky. As chair of the Ways and Means Committee, Camp may schedule hearings on his plan but the House GOP leadership ultimately must bring the bill to the full House for a vote, and it is unlikely to do so this year.

View the full article on the Gettry Marcus website.

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

Gettry Marcus CPA, P.C. is a top New York City and Long Island CPA firm with offices in Woodbury, Long Island and New York City. We provide accounting, tax, and consulting services to commercial businesses, high net worth individuals and various industries which include real estate and health care. We have one of the premier and most credentialed business valuation, litigation and forensic accounting groups in the New York Area. Our experience in diverse industries and a highly talented and experienced professional staff gives us the ability to share valuable insights into our clients’ businesses, to better understand their goals and problems and to help them attain the vision they have for their company.

Gettry Marcus is “Always Looking Deeper” to build value for our clients.

Media inquiries: Contact Fayellen Dietchweiler at 516-364-3390 ext. 225 or at fdietchweiler(at)gettrymarcus(dot)com

Contact: Scott Darrohn, Takara@fishbat.com, 516-364-3390

ReleaseID: 414844

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