There's now little doubt that federal income taxes will change in one way or another under the new administration. But what about state taxes? One possible proposal to watch out for in Ohio is a move to a flat income tax.
As we move into fall, many individuals who sought an extension are continuing to work on tax issues. Similarly, business owners often look to begin to reconcile the books at this time of year and adjust strategies to push to make year-end goals. Many decisions made during the fall tax season are aimed at reducing income tax exposure during the following calendar year. The importance of remaining mindful of the tax implications of decisions made today (and everyday) cannot be understated.
Summer jobs are a great way to generate income for college and a substantial learning experience for high school and college students. The Bureau of Labor Statistics says that last July, more than 20 million people between the ages of 16 and 24 were employed. Sole proprietors, and married couples who run a family business as the only partners of the entity, frequently hire their own children during the summer (and often year-round) to keep income in the family.
Have you avoided filing a tax return for several years? Are you worried that you might be audited by the IRS? Did you buy a home, start a business or get married in the past year? Regardless of the circumstances, as tax season approaches, it's important to make sure you have the information and resources you need to properly prepare and file your taxes.
Most taxpayers know that income is taxed at different rates, depending on how much the taxpayer has earned in the year. For instance, in 2013 a single taxpayer paid 25 percent on the income he or she earned above about $36,000, and 28 percent on income above about $88,000. The top rate on income earned through work that year was 39.6 percent, which applied to any income after $400,000.
It was way back in January when we first discussed the way the city of Cleveland taxes professional athletes’ income when they come to town to play one of the local sports teams. As we explained then, currently Cleveland calculates the taxes on visiting NFL players and other athletes in an unusual way.
According to the Ohio Department of Taxation, legalization of marijuana could bring in as much as $300 million in new tax revenue to the state. That figure is based on the assumption that there would be little integration of the wholesale and retail marijuana business. If the Department of Taxation assumes more integration, the revenue estimates drop to $133 million.
The Ohio legislature has been considering changing the state's severance tax recently. In the last session, the legislature created tax policy study commission, whose job is to examine the state's severance tax and put together proposals to reform the tax to "maximizes competitiveness and enhances the general welfare of the state." Laudable goals indeed, but many in Ohio may wonder what a severance tax is and why it could be increased.