AICPA Proposals Included in New Tax Law.The AICPA AICPA See American Institute of Certified Public Accountants (AICPA). succeeded in having two of its proposals included in the major tax cut bill signed into law by President Bush in early June. First, our package of generation-skipping transfer tax Example: Property is placed in a trust for the donor's child and grandchildren. The income may be "sprinkled" among the child and grandchildren in accordance with their needs and the principal of the trust will be distributed outright to the grandchildren following the child's death. (GST GST abbr. Greenwich sidereal time GST (in Australia, New Zealand, and Canada) Goods and Services Tax ) provisions will provide statutory authority for the Internal Revenue Service to grant regulatory relief for late allocations of the GST tax exemption tax exemption, immunity from the requirement of paying taxes. Federal, state, and usually local law provide exemption from taxation for a wide variety of organizations, usually not-for-profit, such as churches, colleges, universities, health care providers, various , so that taxpayers will not necessarily have to face unintended or punitive taxes. Our proposal also makes other technical changes to the GST tax rules that will substantially alleviate their traps for unwary taxpayers. We fought hard to have our GST proposal included because it will be 2010 before the new law fully repeals the estate and GST taxes (if, indeed, that actually occurs) and taxpayers need help now in avoiding these traps. Second, we successfully urged Congress to include our retirement education proposal in the tax bill so that employers can provide retirement advice to their employees on a tax-free basis; that is, the cost of the advice is deductible That which may be taken away or subtracted. In taxation, an item that may be subtracted from gross income or adjusted gross income in determining taxable income (e.g., interest expenses, charitable contributions, certain taxes). to the employer, but is not included in employee income. The new provision, effective next year, does not apply to tax return preparation, will drafting, or similar services, but it will allow employers to provide retirement planning Retirement financial planning refers to a collection of systems, methods, and processes which, in their aggregate, support a family unit's (client's) desire to achieve a state of financial independence, such that the need to be gainfully employed is optional. assistance to their employees without concern that the cost of that advice is taxable to the employee. Another change made by the new law that we have long supported is marriage penalty relief, which phases in starting in 2005. In 2011, all the provisions of the new law expire, unless a future Congress and President act to extend them. |
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