An agreement that was reached in Congress this week and is expected to become law would give small companies a $500 000 annual deduction for equipment purchases like cars and computers, manufacturing machinery and office furniture. The so called Section 179 deduction has been in limbo the past few years with Congress often not agreeing until December to raise it from the $25 000 called for in the federal tax code.
The permanent $500 000 deduction is part of a tax package that also includes a higher deduction through 2019 for all companies that depreciate equipment purchases and a permanent break on research and development costs.
Equipment has to be purchased and put into service by Dec 31.
On December 4th, President Obama signed into law controversial tax provisions and it became a public law. According to the law, you can lose your passport if your tax debt amount is exceeds $50,000. The other possibility is that the renewal of your passport cannot be done. This law will be effective on January 1st, 2016.
According to the new law, if the Secretary receives certification by the Commissioner of the IRS (Internal Revenue Service) that an individual has seriously delinquent tax debt, the Secretary shall transmit such certification to the Secretary of State for action. The Secretary of State, however, is authorized to deny such application, which do not include the individual’s social security number or include an incorrect social security number.
This idea of taking the passport away if you do not pay your taxes on time is not new. It has dropped up again and again in the past years. First, the IRS was conscious of what this idea will mean in action. However, they then thought that it may lower the numbers of taxpayers with unpaid US taxes.
Why to be concerned about this new law? Because taxpayers need passports when they are traveling internationally. This could make the IRS hold even more serious. On November 2014, The American Citizens Abroad released a Position Paper on Passport Revocation. They thought that taking the passport away for American citizens living outside of the US, is against of the human liberty and freedom embodied in the Magna Carta. It might also cause harm for people’s everyday life, because you need to have a passport outside of the US for many things, such as open bank accounts and medical care.
We highly recommend that you pay all your taxes on time! If you have any questions regarding your taxes, do not hesitate to contact us. We are happy to help you.