Many small businesses operate as S corporations to avoid the complexities of C corporations and to avoid double taxation. C corporations are taxed before money is distributed to their shareholders who are taxed yet again. On the other hand, the income of S corporations flows directly to shareholders who pay for taxes on their personal returns.  There sometimes a day, however, when an organization outgrows its S corp status, and the company would like to revoke it in favor of operating as a C … [Read more...]

Homebuying and homebuilding are good for the economy. That fact, and not lawmakers’ desire to give working families a break, is what makes the mortgage interest deduction a sacred cow. The government sees the deduction as something of a reverse stimulus. By encouraging people to buy houses, and therefore encourage builders to construct houses, the economy prospers. Not all nations see it that way. Some industrialized countries, most recently Japan, have either tinkered with the MID or done … [Read more...]

For about a generation, spousal support payments have been tax-deductible for obligors and alimony receipts have been tax-reportable for obliges. Effective January 2019, the times they are a-changin’. Payments will no longer be tax deductible and receipts will no longer be tax-reportable. According to some, the change is just a ripple in the ocean. According to others, it’s the biggest change to family law since California began the no-fault divorce revolution in 1969. From an income tax … [Read more...]

In 1900, at the dawn of the Industrial Revolution, life for everyday Americans was not much different than it was in 1700. Then, gasoline-powered automobiles replaced horse-drawn carriages, and everything changed. Fast forward a little over a century. In 2030, when driverless cars arrive, the revolution may be even bigger. The same technology that replaces automobile drivers may also replace truck drivers, waitresses, fast food cooks, and a host of other workers, at least according to … [Read more...]