Recently, businesses should have received their Commercial Personal Property Assessment Forms. Every year Potts & Company receives calls from our clients to answer questions about how to complete these forms. One of the most frequently asked questions is how to calculate average inventory. This is because some businesses just don’t count their inventory but once a year, if then. But sometimes clients just call the Assessor. The Assessor’s instructions usually result in an overstatement or understatement of inventory.
The 6th century BCE Chinese General Sun Tzu in his book The Art of War, reminds his followers: “It is said that if you know your enemies and know yourself, you will not be imperiled in a hundred battles; if you do not know your enemies but do know yourself, you will win one and lose one; if you do not know your enemies nor yourself, you will be imperiled in every single battle.”
National Taxpayer Advocate Nina E. Olson delivered her report for 2012 on January 9, 2013. She identified the need for tax reform is the overriding priority in tax administration. She also expressed concern that the IRS is not adequately funded to serve taxpayers and collect tax, and identified ways in which this chronic underfunding harms taxpayers and the public purse.
If you’re like most people, you probably weren’t aware of the existence of the “Taxpayer Advocate Service” within the Internal Revenue Service. One of the principal duties of the National Taxpayer Advocate is to submit an annual report to Congress. This report includes:
- A summary of the 20 most serious problems encountered by taxpayers;
- Legislative and administrative recommendations for solving those problems; and
- An examination of the year’s most frequently litigated issues.
Circumstances can occur that pressure people to withdraw money from their retirement account before their retirement date. This pressure can be created when a person is laid off from a job. It can be created when you need to pay an attorney to keep a fair haired son out of prison. Maybe a Mom and Dad feel the need to pay for their daughter’s wedding. The range of circumstances creating financial pressure that tempts a person to withdraw money from an IRA or retirement plan is wide and various. Giving in to this temptation can be costly.
If you have a traditional IRA or funds in an employer sponsored retirement account, you generally have to include any amount withdrawn from this account in your taxable income. If you haven’t reached age 59 ½ when you withdraw money from a retirement account, a 10% penalty is imposed on the taxable portion of the distribution. In Arkansas, the penalty for early withdrawal of funds from a retirement account is 1% of the taxable distribution. So let’s do some simple arithmetic.