Two-thirds of corporations pay no income tax... Let's increase that number!

This week journalists and bloggers were lamenting the fact that a full two-thirds of United States corporations pay no income tax to our federal government. Boo-hoo.... They're apparently getting away with something horrible in the eyes of these writers.

I see it completely differently. First of all, corporations don't really pay any income taxes at all. People do. Every time a company decides to sell something to you, the price depends on a lot of things, including how much it costs to make the item, how much profit the company wants to make, and how high the company's tax bill is. You, the consumer, end up paying the corporate income tax with higher prices. And you want more of that?

My second big problem with people demanding more corporate income taxes is the result that would have on U.S. businesses. Our country really doesn't need anything else to make us less competitive in manufacturing. The same people moaning about big businesses making too much money and not paying enough taxes are the same ones belly-aching about jobs going overseas.

Newsflash for you: More taxes here will mean more jobs going overseas. It's simple economics, and companies must turn a profit in order to stay in business. Take away their profits, and you take away their reason for existing.

The focus on corporate income taxes is misguided. Look at all the other tax money the government collects via the business these corporations do. They create jobs, which creates payroll taxes, and creates income to individuals which is taxed. It sounds like there's plenty of taxing going on, and adding another layer by demanding that more corporations pay more income taxes doesn't seem necessary.

Don't forget that taxes paid to the government don't really add to our economy. The government's job is not to see how much they can collect from citizens and spend as much as possible on unnecessary programs and mandates. Let taxpayers keep their money and decide what's important to them. There will be a far bigger benefit to our economy by letting taxpayers choose where to spend their money and by letting that money work through private businesses, which are historically far more productive and efficient than our government.

Don't forget too, that our tax laws are what they are. Corporations hire tax specialists who help them figure out how to legally pay as little in taxes as they can, which means working within the tax code to increase the amount of profit kept by the companies. Cheating on taxes is wrong, but staying within the legal limits while reducing the exposure to taxes makes good business sense.... Not just for the companies, but also for the consumers who rely on the jobs they create and products and services we need and want to buy.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Business Use of Vehicles

If you use vehicles in your small business, how and when you deduct for the business use of those vehicles can have significant tax implications. It pays to learn the nuances of mileage deductions, buying versus leasing and depreciation of vehicles. Special rules for business vehicles put in use in 2017 can deliver healthy tax savings.

Read More

Brought to you by TurboTax.com

Video: Common Income Tax Deductions

Some common income tax deductions that can lower your annual taxes include mortgage interest, state and local property taxes, charitable contributions, and non-reimbursed work expenses. Find deductions that you are eligible for with help from TurboTax in this video on annual tax filing.

Read More

Brought to you by TurboTax.com

Reversing a Roth IRA Conversion

Under new rules that took effect in 2010, you can convert a traditional IRA into a Roth IRA no matter what your income is. If the conversion turns out to have adverse tax consequences, you'll have plenty of time to reverse the whole transaction, but only for tax years prior to 2018.

Read More

Brought to you by TurboTax.com

Deduction for Higher Education

The Tuition and Fees Deduction expired at the end of 2017. It allowed you to deduct up to $4,000 from your income for qualifying tuition expenses paid for you, your spouse, or your dependents.

Read More

Brought to you by TurboTax.com
Read Full Story