Retirees' pensions insulated from state income tax

Article Abstract:

Tax practitioners should familiarize themselves with the Pension Source Act because it can result in substantial revenues losses to taxing states and significant gains in pension value for the retirees. It forbids the taxation of particular retirement income of a nonresident of the taxing state where this taxpayer earned the pension as a previous resident. Congress decided to pass this legislation because state taxation of pension income would lead to the taxation of nonresidents without representation. Moreover, it removes the administrative burdens linked to the assessment and collection of these taxes, and the unjust imposition of multiple state taxes on retirees. Retirees can take advantage of the Act by moving to non-income state tax states.

Regulation, Licensing, and Inspection of Miscellaneous Commercial Sectors, Pension & Welfare Benefit Prgrm, Taxation, Laws, regulations and rules, Pensions, Income tax, State taxation, Retirees

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Choices in LIFO pooling can affect tax and book results

Article Abstract:

The use of the last in, first out (LIFO) pooling method by companies for inventory valuation lessens the chance for the cost of goods sold to be valued at outdated prices. This method can also influence the net earnings of firms through the size and content of their inventory pools. Generally accepted accounting principles (GAAP) advise firms to choose small number of pools composed of similar inventory items, but business executives can exercise their own judgment. Companies using the LIFO method for tax reporting are required by Reg. 1.472-2(e)(1) to also use it for credit and financial reporting.

Standards, Methods, Accounting, Valuation, Inventory control, Business reports, Inventories

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