Rumbold Financial & Tax Advisory

02/10/2025

Rumbold Tax Advisory is one such expert for your needs with tax return preparation, collections and examinations.

Enrolled Agents (EAs) are America’s tax experts. They are federally licensed by the IRS and specialize in tax preparation, tax planning, and representation f...

11/26/2024

New IRS data for tax year 2022 shows the US federal income tax system continues to be progressive as high-income taxpayers pay the highest average income tax rates.

https://hubs.ly/Q02YN7h_0

02/09/2023

There seems to be a lot of controversy over the IRS’s plan to go after unreported tip income of service providers.

Tip income has always been considered wages by the Internal Revenue Code (IRC). As such they are subject to income tax and payroll tax (Social Security and Medicare). Employees who receive tips are required to keep a daily record of tips received. Employees are required to report tip income to their employer If the monthly tips are over $20. The employer then includes the amount in the taxable wages of the employee – withholding and W-2 reporting at the end of the year. None of this is new or unusual. Most service employees know all about this and already pay tax on their tip income. Generally, it is the employers who fail to report tips of their employees. The IRS has the authority given by Congress to reconstruct tip income on the basis of average tips in a given locality for a given type of service.

Under the theory that everyone should pay their fair share, the controversy should be about the IRS not going after unreported tips.

02/03/2023

Today is the 110th anniversary of the passing of the 16th Amendment to the U.S. Constitution. You know, the one that made the income tax legal. The tax began in 1913 and it was 1% on incomes over $3,000. It was 70% during WWI and 94% during WWII - top bracket that is. Please post pictures of your celebration of this event.

01/24/2023

I suppose that some of you think it is a wonderful thing to tax a person’s wealth in addition to their income if they have over $1 billion is wealth – however that is defined. This figure would drop to $50 million in 2026 presumably because by then we would all be getting used to this new intrusion into personal finances. Wealth would include things such as farm holdings, artworks and other collectibles meaning that annual appraisals of these illiquid assets would be necessary. The more controversial part of this proposal is to tax people who move out of the state.

The Sixteenth Amendment of the Constitution says: “The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.” Notice the word “incomes” in this sentence. It does not say “wealth.” So, would this measure pass constitutional muster. Not likely but California is known to pass many laws which later get knocked down by the federal courts.

The federal government does have an exit tax for people who leave the country and give up their citizenship. The tax is on any unrealized gain in their assets. This seems to make some sense as these gains were somewhat derived from the privilege of being a citizen.

California Democrats introduced legislation that would impose a new tax on wealthy residents — even if they've already moved out of the state.

11/01/2022

https://taxfoundation.org/how-many-words-are-tax-code

The tax code is huge and complex. But how huge and complex is it?

10/31/2022

Need help with a tax problem? Give us a call.

Americans are facing a long list of tax changes for the 2022 tax year. Smart taxpayers will start planning for them now.

10/12/2022

Small businesses are adopting crypto. Does that mean crypto be written off as a business expense? Find out here.

04/21/2022

The Tax Cuts and Jobs Act signed into law by President Donald Trump on December 22, 2017 reduced the corporate tax rate to a single bracket of 21% from eight brackets with a high of 38%. It had been as high as 51% for two years in the 1980s.

Now we see that corporate tax revenue is soaring. How can that be? With the rate cut so drastically, how can the amount of tax dollars collected go up? You should look up the Laffer Curve to discover the answer.

Total federal tax collections are currently running 25 percent higher than last year, and if that pattern holds, total federal tax collections will reach over $5 trillion in FY 2022—a new all-time high.

11/17/2021

Keep in mind that these rates could change based on new legislation by the Federal government in the coming weeks.

The standard deduction amount for the 2022 tax year jumps to $12,950 for single taxpayers, up $400, and $25,900 for a married couple filing jointly, up $800.

11/08/2021

As Democrat demands to "tax the rich" grow, Campus Reform's Addison Smith went to the University of Houston to see if students felt that the wealthy in Ameri...

11/04/2021

Contact your elected officials if you don't want this.

Under the Build Back Better framework, six states and D.C. would face combined top marginal capital gains tax rates of more than 40 percent, nearing the top rate among OECD countries.