Essential reading: Cliff fix hits small business, and more

Tax News

Washington-REUTERS-Hyungwon-KangWelcome from to the top tax and accounting headlines from Reuters and other sources.

* Cliff fix hits small business. Emily Maltby and Angus Loten – The Wall Street Journal. The fiscal-cliff deal didn’t change the corporate tax rate, which is no more than 35 percent. But many small S-Corp businesses will see a tax increase to 39.6 percent. Link

* Small-business tax incentives survive the deal. Robb Mandelbaum – The New York Times. The bill also renews dozens of other income-tax provisions for individuals and businesses through a series of provisions that the legislating class calls “extenders.” And though advocates for small businesses were concerned that legislators might overlook their interests in the high-pressure negotiations, it turns out that their pessimism was unfounded. Link

* How deal was made, unmade, then saved. Patrick O’Connor and Peter Nicholas – The Wall Street Journal. By early Wednesday, partisans on the left and right had found plenty to grumble about in Congress’s New Year’s deal to avoid going off the fiscal cliff. But it is unlikely there would have been any deal at all to grumble about if not for a Sunday afternoon phone call from one end of Pennsylvania Avenue to the other. Link

* Tax deal shows possible path around House GOP in fiscal fights to come. Jonathan Weisman – The New York Times. With the contentious 112th Congress coming to a close, the talks between the White House, Senate Republicans and Senate Democrats that secured a path around a looming fiscal crisis on Tuesday may point the way forward for President Obama as he tries to navigate his second term around House Republicans intent on blocking his agenda in the 113th. Link 

* Deductions limits will affect many. John McKinnon – The Wall Street Journal. One of the biggest tax increases in the fiscal-cliff bill is also one of the least understood: a set of limits on tax deductions and other breaks that will hit far more households than the bill’s rate increases for top earners. Link 

* Goldman awards stock ahead of tax rise. Liz Moyer and Steven Rossolillo – The Wall Street Journal. Goldman Sachs Group Inc. handed insiders including Chief Executive Lloyd Blankfein and his top lieutenants a total of $65 million in restricted stock just hours before this year’s higher tax rates took effect. Link 

*  Which countries tax the most? Olga Khazan – The Washington Post. A new report from the World Bank and PricewaterhouseCoopers offers a revealing look at trends in tax rates around the world. Overall, taxes have become less onerous for companies over the past eight years, with both administrative burdens and overall tax rates going down over time. Link

* And now, a brief word from the IRS. John McKinnon – The Wall Street Journal. The Internal Revenue Service issued a brief statement on Wednesday on its preparations for the 2013 tax-filing season and issued its 2013 withholding tables. Both had been disrupted by the lengthy delay in congressional action on the fiscal cliff. Link

Source: Reuters – Cliff fix hits small business, and more

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