Tax Feed

Form 1040 income tax return

The AICPA provides tax practice tools to help members elevate their practices and maintain the highest ethical standards. The AICPA also advocates sound tax policy and effective tax administration.

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

Nanny Tax 101: Managing Employer Obligations at Home

Nanny TaxesOne of the most important decisions working parents will make is deciding who will get the honor of taking care of their little one during the day. My husband and I decided to hire a nanny to watch our sweet little boy, Henry. We liked the idea of Henry getting excellent one-on-one care from an experienced caregiver, and daycare can present challenges for us in terms of picking up and dropping off our son each day – we may be parents, but our career demands still exist. Hiring a nanny worked well for our situation, but there are certainly administrative and tax responsibilities to consider when making this decision:

Nannies are household employees

Though most families want to consider their nanny an “independent contractor” to avoid costly payroll taxes and the associated administrative duties, nannies are household employees. The instructions for Form 1040, Schedule H are pretty clear on this matter.

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Who’s on Your (Fictional) Client Wish List?

Good WifeReady for some peace and sunshine in your life? In a recent blog, we speculated about TV characters who would make truly awful clients (Walter White, members of the Walking Dead, you get the picture). Now we are focusing on fictional clients who could really take the stress out of life. Which one of these would be your dream client? 

Here are our top picks:

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In the News: CPAs Provide Gift Tax Guidance and Cyber-Security Tips

Shutterstock_124401508CPAs serve as trusted advisers and provide their clients with expert guidance on a variety of topics. It’s no surprise that they are frequently cited by the media for their expertise in areas such as tax, financial planning and even cyber security best practices. I’ve summarized a few recent examples of CPAs helping people make informed decisions about their financial lives.

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Help Us Improve the “Service” in the Internal Revenue Service

Man on hold with IRSIt is no secret that IRS service during this past tax season plunged to a level that I can only describe as unacceptable.  The anecdotes from members keep coming in, and from what we hear, the predicted 53-minute average wait time to reach someone on the IRS Practitioner Priority Hotline is not so much an average as it is wishful thinking. That prediction came from IRS Commissioner John Koskinen, who said in November that the IRS will try “to do as well as we can. As well as we can is still going to be miserable.” 

Taxpayers trying to get through to a representative are not faring much better as discussed in recent news reports and shown in the chart below. In its annual report to Congress, the National Taxpayer Advocate deemed this to be the most serious problem facing taxpayers. 

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Potential State Tax Law Changes on the Horizon

In and out of focusAs we get ready to put away our snow shovels, gloves and winter coats, and take out the sandals and sunscreen (yes – we probably should be using it all year), Congress and many state legislatures are considering some important tax changes. The AICPA and state societies are closely monitoring these issues and ensuring that the profession’s voice is heard:

  • State Sales Tax on Professional (Accounting) Services

With states searching to either expand their revenue base or reduce reliance on income taxes, several states are considering proposals to expand their sales tax to cover professional services, such as those provided by CPA firms. So far this year, 11 states (California, Connecticut, Hawaii, Indiana, Maine, Maryland, Mississippi, Missouri, Ohio, South Carolina, and Virginia) are considering the issue. Recently, Pennsylvania Gov. Tom Wolf (D) proposed a sales tax expansion that would include accounting services, but professional services provided to a business would be exempt.  The AICPA continues to work with state CPA societies and our profession partners to try to stop these proposals from becoming law.

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