July 4th Miscellany
I am writing this in the midst of July 4th week, which means not as many people are going to read this one. But it also means that many of you are looking for something to do that will make it appear as if you’re doing work while sitting at your desk. So for those people, here are three quick hits so that you don’t have to pay too much attention.
In a story that seems to be constant rather than breaking news, the IRS is looking to hire more employees. The steady decrease in the agency’s workforce has been a story for years, leading to fewer audits and longer waiting times when contacting them.
It’s a problem I can’t quite wrap my mind around if I think about it too deeply. This is clearly an institution that the government needs to ensure it is funded and able to function. It seems to be an afterthought when it comes to budgeting, though, with a constant need for increased staff.
So what my mind always comes back to is don’t expect any changes to come about in how the agency runs until the story is that the government is making a significant effort to actually move it up the priority list.
Also this week came news that there has been some outreach from the financial community to the IRS stating that the new W-4 form is overly complicated and does not represent an upgrade for workers. Also add this to the things that I cannot quite wrap my mind around.
Is it more complicated, yes, but why does this have to be a bad thing? I mean this is the agency actually reacting to an issue and doing something that directly addresses the issue.
The draft version of the form we have seen certainly will take longer to fill out than the current one. Those who have complicated tax situations may even have to confer with a tax professional to get full answers. But does anyone ever say that tax planning is a bad idea? There is just going to be more information and more ability for more people to allow their withholding to satisfy their tax obligation.
Work is not something one should shy away from when it leads to better outcomes.
Finally, the IRS put out some information this week for those who make money through a hobby. The line between a hobby and a small business can be tricky. No matter on what side of that line you fall, though, if you are making money, the IRS wants to know about it.
That information can be found here.
This is one of those areas where things can be really gray. Like do you really need to report if you made something for a friend who paid you $20 for it? I’ll simply offer a shrug here as a noncommittal answer, but if you’re doing something that could become a significant sideline business, these are issues you at least want to think about.
But not until after burgers and fireworks. So enjoy your holiday!
Connect to Us ~ Facebook ~ Twitter
To ensure we don't make the folks at the IRS ornery, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.
Leave a Reply.