Mike Crabtree's Articles

Minnesota Omnibus Tax Bill Makes Several Changes

The omnibus tax bill signed into law by Governor Dayton provides new tax credits and subtractions, and makes numerous changes to Minnesota income, estate, sales, property, and other taxes.  Some of these changes are effective retroactively and some prospectively, but most of the income tax provisions are effective beginning in 2017.  

New Minnesota Tax Law Revises Residency Factors

The location of a taxpayer’s attorney, CPA, financial adviser, or bank will no longer be a factor in determining whether that taxpayer is domiciled in Minnesota for tax purposes. The tax bill that was just signed into law on May 30th contained a provision that specifically eliminates this factor from consideration by Minnesota Revenue and the courts.

Minnesota Makes Important Correction to Partnership Return Instructions

On February 21, the Minnesota Department of Revenue announced a correction in the form instructions for the Minnesota Partnership Tax return: guaranteed payments for services are subject to apportionment like other partnership income, instead of being allocated to the state in which the services were performed. This change affects partnerships that make guaranteed payments and have both Minnesota nonresident partners and activities in multiple states.

There is a Chance of Frequent Flyer Miles Being Taxable, in Certain Cases

If a person earns frequent flyer miles through travel for their job and then treats their loved ones to a family vacation or a weekend away using these miles, not much thought would likely be put into any tax ramifications that may arise. In most cases, no thought needs to be given to taxes in such situations. However, there are certain circumstances in which those used miles could end up being taxable. Contact one of our expert tax advisors if there is any question when planning your next family get-away using your frequent flyer miles.

Know the Rules for NQDC Plans

The idea of paying an employee or independent contractor "at some point" in the future may seem unusual to those who have not heard of deferred compensation or Nonqualified Deferred Compensation (NQDC) Plans. However, this method of deferring income has several benefits to those who choose it. The catch, though, is to know the tax rules for deferring payments and when you can receive your pay.

Incentive Stock Options Have Special Tax Rules

Incentive stock options (ISOs) allow you to buy stock at today’s prices on a future date. This means that if the stock appreciates, you can buy shares at the lower earlier cost. ISOs can be a great way to buy shares, but you should know that there are complex tax rules associated with them.

 

 

Filing Taxes Early Could Help Prevent Tax Identity Theft

Are you last-minute about filing your taxes, like many Americans? There is a strong focus on this year’s tax deadline of April 18, or even filing an extension to push it to October 16. But what many people don’t consider is that filing taxes earlier could help prevent tax identity theft. The earliest date that the IRS will accept tax returns is January 23, and filing closer to this date could be beneficial.

Minnesota Enacts Federal Tax Conformity Law

Governor Mark Dayton recently signed into law legislation that conforms Minnesota tax law to many of the changes made to the U.S. Internal Revenue Code over the last two years, including the PATH Act of 2015. This change to Minnesota tax law was made retroactive to the 2015 tax year. The Department of Revenue estimates that this law change will save Minnesota taxpayers over $21 million in Minnesota income taxes. The new law has a specific provision that states that no individual’s 2015 taxes will increase as a result of this change.

How Will the Trump Election Affect Your Taxes?

It is likely that there will be changes to the U.S. Tax Code due to the election of Donald Trump and the fact that Republicans will control both chambers of Congress. The Republicans did not reach the 60 Senate members needed to insure against a filibuster, so there may need to be some compromise to get legislation through the Senate. Deficit hawks within the Republican Party may force moderation in the reductions as well. It is not clear exactly which proposals will make it all the way through and be signed in to law. What you can count on are some major changes.

Be on the Lookout for Scam Phone Calls and Email Schemes

Beware of tax schemes, in which fraudsters send official-looking emails asking for personal tax information, or telephone scam artists call and pretend to be with the Internal Revenue Service (IRS). Taxpayers are urged to ignore these scams and instead report them to the FTC Complaint Assistant.

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