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No Tax On Tips – Be Careful What You Wish For

No Tax On Tips – Be Careful What You Wish For

I frequently do an “Other Coverage” section on my posts, but I wouldn’t know where to start on this topic.  I will note though that I have not found another article where somebody ran numbers on the effect of the various legislative proposals.  Reilly’s Sixth Law of Tax Planning – Don’t Do The Math In Your Head.

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IRS Conservation Easement Settlement Offer – Sweet Deal ?

IRS Conservation Easement Settlement Offer – Sweet Deal ?

Under the deal you are allowed your out of pocket meaning that the disallowance is $300,000.  And that is taxed at 21% making the deficiency $63,000 for a total tab of $66,000 including the 5% penalty,  Of course there will be interest on top of that.  Nonetheless if back when you did the deal you made a wise investment with your $58,4000 in savings over and above the investment, you will actually have come out ahead for having invested in a really ridiculous deal.

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Over and over again courts have said that there is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.