On one particularly relaxed day, I grabbed a Cohiba and thought that I would catch up on all of the tax-related emails that I get. I subscribe to pretty much everything.
I read one article about how tax reform is expected to start in September. Here’s my question: What happened to the two-year patch that expires in December?
Or, are we going to get yet another patch. Is this what we have been waiting for?
President Trump wants a 15 percent corporate tax bracket and a 15 percent pass-through tax on S corporations and partnerships. Congress is talking about a 20 percent to 25 percent corporate tax bracket but no special cut rate on tax for pass-throughs.
For individuals, both the president and Congress agree on reducing the current seven-tiered tax brackets to three. However, when it comes to deductions, the proposals diverge substantially.
The House GOP suggests eliminating virtually all individual tax deductions except the mortgage and charitable deductions (paired with an expanded standard deduction).
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At the same time President Trump wants to keep all the current itemized deduction rules but cap itemized deductions (at $100,000 for individuals, or $200,000 for married couples), while also expanding the standard deduction even more.
What will really happen in September? Will this be another healthcare debacle, or will something actually get done? Will there be another patch or will be this be the reform we were promised in January?
To be honest, I am completely ignoring speculation on tax reform, and I have no idea what compelled me to read that article or to write this one.
I blame it on the Cohibas, but there's the good feeling I get when smoking one.
If you have ever smoked a Cohiba, you’re well aware that it’s the gold standard of Cuban cigars. In the U.S., they retail for $450 a box. But with my Cuban status by marriage, I get them for $70 a box.
My wife is Cuban. She came to the U.S. during the Mariel boatlift in 1980, when she was 4 years old. Being married to a Cuban for 22 years, I now — for better or worse — consider myself half Cuban. When my wife and her parents speak Spanish slowly, I can understand most of what they say.
A box of Cohibas actually costs $50 in Cuba, but I pay the runner a $20 fee. Getting my hands on them is a whole process. First, they must be ordered a month in advance. Then I take a drive to Miami, which is about four hours from where I live, to retrieve them.
But the hassle of traveling for so long makes them so worth it. I keep them in a humidor, and when I want to relax and enjoy a smoke, I simply take one out, cut off the end, and use my special cigar lighter. I might even share one with an important person.
About Craig W. Smalley, EA
Craig W. Smalley, MST, EA, has been in practice for almost 23 years. He has been admitted to practice before the IRS as an enrolled agent and has a master's in taxation. He is well-versed in US tax law and US Tax Court cases. He specializes in taxation, entity structuring and restructuring, corporations, partnerships, and individual taxation, as well as representation before the IRS regarding negotiations, audits, and appeals. In his many years of practice, he has been exposed to a variety of businesses and has an excellent knowledge of most industries. He is the CEO and co-founder of CWSEAPA PLLC and Tax Crisis Center LLC; both business have locations in Florida, Delaware, and Nevada. Craig is the current Google small business accounting advisor for the Google Small Business Community. He is a contributor to AccountingWEB and Accounting Today, and has had 12 books published on various topics in taxation. His articles have also been featured in the Chicago Tribune, New York Times, Yahoo Finance, Nasdaq, and several other newspapers, periodicals, and magazines. He has been interviewed and been a featured guest on many radio shows and podcasts. Finally, he is the co-host of Tax Avoidance is Legal, which is a nationally broadcast weekly Internet radio show.