Guest Author - Kate Woods
Thinking about St. Patrick’s Day brings to mind the concept of Blarney, particularly Political Blarney and Tax Blarney. As a licensed Tax Preparer with many years of experience much of the rhetoric being spouted in the media everyday by the naysayers rings hollow and completely untrue and it sounds like Tax Blarney to me. Join me in supporting a new rule - No Blarney, No Bull, Truth is the New Cool... A working knowledge of tax laws disproves the tax blarney. That is why it is so important right now to be sure you pay attention to what is real information and what is political aspiration. In other words what is Tax Blarney?
The Tax Blarney about Small Business tax increases that the naysayers are spouting is particularly annoying. What are they basing their information on? Not the tax laws, that’s for sure. There are many small business owners who are self-employed and they make an average income, many who show little or no income and many who show losses on the operation of their small businesses. A large percentage of small business owners will in all likelihood never come close to a “TAXABLE” INCOME” of $250,000 a year. Take note of the fact that the number we are talking about is Taxable Income. If the total gross receipts of the business are $300,000, $400,000, even $500,000 a year or more, it is then reduced by their business expenses such as depreciation for equipment and buildings and furniture and fixtures, meals and entertainment, business supplies, business travel, auto expense deductions, payroll for employees, payroll taxes, etc., etc. Many small business owners are self-employed sole-proprietors which means they are entitled to deduct all of the available write offs to reduce their individual income. They even get to take a self-employed health insurance deduction. Still, a very large percentage of small business owners do not have “TAXABLE INCOME” of $250,000 or more and therefore, would not have a tax increase under the new stimulus legislation. So what is all this Blarney that we are hearing everyday from some of the political and media naysayers. It’s just Blarney, pure and simple.
Blarney is by definition deceptive or misleading talk; nonsense; hooey. With the sorry state of the economy in our country, should our politicians from either party be spouting out deceptive or misleading information to the taxpayers to further their own political aspirations? Of course, we must acknowledge that many of the politicians probably do not actually know much about taxes and tax law or the preparation of a small business tax return and they simply spout off the party line of the moment – the nonsense and hooey of the moment – the Blarney.
So, how are we to behave and what are we to think about all this conflicting Blarney and the sorry state of our economy? Well, we should start with the facts. For example, if a plane is going down in flames, we must act to put out the fire. There is no time to stand around analyzing and discussing how much it will cost to put out the fire. You have to act to put out the fire. Political blarney won’t do that but standing around spouting off and neglecting the fire will certainly make the situation worse. If the fire is allowed to burn itself out instead of being put out, how much more will burn up along with the plane? How many houses, fields, vehicles and people will be irreversibly damaged or destroyed by the lack of action?
This bickering blarney is really not about Liberals versus Conservatives. It’s about the houses, the fields, the vehicles and the PEOPLE and not allowing irreversible damage and destruction. Don’t ask me if I’m a Conservative or a Liberal, that’s just not what matters. I am first and foremost an American and that’s not blarney! Are you?
Any U.S. tax advice contained in this electronic communication was not intended or written to be used, nor can be used, by any recipient of this communication for the purpose of avoiding penalties that might be imposed pursuant to the Internal Revenue Code or U.S. Treasury Regulations, or any other state or local law or regulation.
Content of this site is not intended to replace professional consultation.