New York Giants fan chow down at a pre-NFL game tailgate party. (Photo by Ben Vardi via Wikipedia Commons) College football begins in full force this Labor Day weekend. The professional pigskin players kick off the 2018 season on Thursday, Sept. 6. That means crazy body paint, tons of tailgating and betting. Yes, although professional sports leagues and especially the National Collegiate Athletic Association (NCAA) hate to admit it, gamblers put down billions on games every year. Most of those wagers have been, and will continue to be, placed illegally despite the May 14 decision by the Supreme Court of... Read more →
August 2018
Tourists still love Disney's original castle at its flagship theme park in Anaheim, California. (Photo by Tuxyso via Wikipedia Commons) Most major corporations want cities and states to provide them massive tax breaks to move to or keep their operations in a specific place. Just look at Amazon, which is expected to soon announce the home of its new tax incentive laden second headquarters. The House of Mouse, however, is taking a different approach. This week the Anaheim City Council voted to end agreements with Disney that provide tax breaks for the original Disneyland theme park, Disney California Adventure and... Read more →
The Tax Cuts and Jobs Act (TCJA) did away with exemptions, a particularly concerning change for large families. Exemptions were a specific dollar amount, adjusted annually for inflation, that taxpayers could claim for themselves, their spouses if filing jointly and dependents. The exemptions total helped reduce the amount of filers' income subject to tax. TCJA supporters, however, say not to worry. They say the new law's lower income tax rates, wider income brackets, larger and more refundable child tax credit and $500 tax credit for other dependents will make up for the eliminated exemptions. Dependents guidance: The Internal Revenue Service... Read more →
The tax collection efforts of four private debt collectors are paying off, bringing in $56.6 million in previously uncollected tax revenue in the first 14 months they've been on the job. However, it cost the tax bill collectors $55.3 million to do that job, netting Uncle Sam only $1.3 million. That's the word from an Internal Revenue Service report on the most-recent iteration of the private tax debt collection program. "Contrary to critics' claims and despite its slow-roll out, the IRS private debt collection program is already demonstrating that it can more than pay for itself with revenues returned to... Read more →
Donors to charities are used to scrambling on Dec. 31 to get their tax-deductible gifts to nonprofits in under the tax-year wire. But thanks to Tax Cuts and Jobs Act changes, many are facing a deadline today, Aug. 27. The TCJA set a new $10,000 limit on state and local tax (SALT) payments that can be deducted on federal returns. To get around that, several states established charitable funds to which their residents, who claim itemize deductions on their federal tax returns, could make SALT payments. Those gifts to the state then would be deductible as charitable donations, which was... Read more →
One, in addition to being the loneliest number, also soon could cost some Chinese taxpayers when it comes to their family size. Three years ago, China abandoned its policy, which had been in place since 1979, of fining people for having more than one child. Now Chinese leaders want to encourage people to have more kids. The reason for wanting more babies is that China's previously restrictive family planning policy has produced a growing aging society and a shrinking young population. That's not healthy for any economy. To remedy that situation, China is exploring a variety of proposals, including a... Read more →
Americans have always been mobile, as evidenced by this vintage photo from Flatbush Moving in Linden, New Jersey. Now some folks say they're relocating because of new tax law limits on deductions. Now that the Treasury Department and Internal Revenue Service have made it clear that they will restrict state efforts to work around the new $10,000 cap on the deduction for state and local taxes (SALT), some folks are looking at other options. Among them, according to a New York Times story, is to move. (Unfortunately for them, the new law also, for the most part, ended the tax... Read more →
The Geostationary Operational Environmental Satellite (GOES) view of Hurricane Lane near Hawaii via the National Oceanic and Atmospheric Administration (NOAA). Click image to watch the radar loop. Hawaii, it's Big Island already soaked by Hurricane Lane's rains, is bracing for a very near miss from the biggest weather threat to the Aloha State in decades. The storm, which hit category 5 strength earlier this week before settling in at a still very dangerous category 4, could come close to the islands of Oahu, Molokai and Maui on today and Saturday. Even without making landfall, Lane's size and rainfall reach could,... Read more →
One of the first questions I got when states started working on chartable programs that would let their taxpayers get around the new $10,000 cap on the deduction for state and local taxes (SALT) was how any Internal Revenue Service action might affect existing programs. We finally have an answer and it's not good. "Congress limited the deduction for state and local taxes that predominantly benefited high-income earners to help pay for major tax cuts for American families," said Secretary Steven T. Mnuchin in a statement accompanying the regulations. "The proposed rule will uphold that limitation by preventing attempts to... Read more →
The courthouse where a federal jury on Aug. 21 found Paul Manafort guilty of eight charges, including five tax evasion counts. Could he also face state charges? (Photo via Google Earth) It's the day after bombshell revelations in two federal courtrooms and the political and tax world is still abuzz. Almost simultaneously on Tuesday, Aug. 21, afternoon, two of Donald J. Trump's former presidential campaign officials faced serious legal judgments in two separate courtrooms. In New York City, Trump's former personal lawyer pleaded guilty to eight federal felony counts of tax and bank fraud, as well as campaign finance law... Read more →
School's starting, meaning parents and students need to study up on how the new tax laws do and don't affect the many tax-favored ways to pay for classes. We're all still learning about the Tax Cuts and Jobs Act (TCJA) that was passed late last year and took effect, for the most part, at the beginning of 2018. One area where we all need some tax lessons, especially with the start of the first school year under the new tax law's provisions, is how it affects educational tax breaks. It does make some key changes to some of the tax... Read more →
Classes, from Kindergarten to high school to college, are or about to be in session across much of the United States. That means parents can breathe a sigh of relief now that schools and teachers will once again add structure to their children's lives. But the beginning of the school year also prompts a new parental concern: their youngsters' privacy. No age limit for ID theft: Identity thieves don't set age limits on the people whose lives they try to steal. When a young person's identity is stolen, it sometimes takes longer to discover since most kids aren't involved in... Read more →
Sunsets like this one at Zuma Beach in Malibu, California, make many Golden State coastal properties prime rental investments. But Golden State limits on property taxes on inherited homes cost cities and other jurisdictions billions of dollars. (Photo by Alex Beattie via Flickr CC) Californians love Proposition 13, the grandfather of tax-limiting ballot initiatives. Since its passage in 1978, it has kept a tight cap on property tax increases. But an expansion of the original Prop 13, enacted eight years later, and its unforeseen consequences have cost Golden State school districts, cities and counties of billions of dollars in revenue,... Read more →
I smoked for way too many years, back when I was young and feeling rebellious and immortal. So I have no standing to tell these kids today that smokeless smoking isn't good for them. My unsolicited advice probably wouldn't be heeded anyway. It appears that many young people already are hooked on Juuling. Jumping on the Juul train: For those who are unfamiliar with Juuling, and I was one of the until today, it's the latest iteration of electronic cigarettes. The verb comes from Juul, the product introduced to the vaping market in 2015 by Pax and spun off in... Read more →
A Lyft ride sharing vehicle in Atlanta. (Photo by Daniel X. O'Neil via Flickr Creative Commons) Most U.S. workers meet their annual tax responsibilities via paycheck withholding. Here you give your boss the information needed to calculate just how much income tax should come out of each paycheck so that you're Goldilocks at tax-filing time, not owing the U.S. Treasury too much or too little. The sharing economy has thrown a wrench into this system. Lots of folks with traditional 9-to-5 jobs are hustling on the side to earn extra cash. Others have committed full-time to gig economy work. Job... Read more →
This family, with four generations shown here, likely will feel the effects of the new tax law. (Photo by Azoreg via Wikimedia Commons) Things get complicated when you have kids. Those complications are, well, even more complicated when it comes to tax filing. The Tax Cuts and Jobs Act (TCJA) made a variety of changes, in effect at least for tax years 2018 through 2025, that will affect millions of parents. Here's a quick look at key tax changes for dependents. Exemptions are eliminated: Under prior law, personal and dependent exemptions were excellent. These tax breaks helped filers reduce income,... Read more →
After years of being lambasted for efforts to regulate tax preparers, the Internal Revenue Service is on a roll in its efforts to oversee certain tax professionals. A recently introduced bipartisan Senate bill would give the IRS the authority that many argue it doesn't have to set standards for tax professionals who aren't subject to other professional guidelines. This is not the first time such legislation has been introduced. But those previous bills never went anywhere. However, the tide now seems to be shifting a bit in the tax agency's favor. Influential tax professional groups are among this latest legislative... Read more →
Taxpayer security remains a major concern across the United States. The Internal Revenue Service continues to use carrots — such as sharing security tips from tax pros who've been victimized — and sticks — specific data retention rules that practitioners must follow — to help protect tax pros and their clients. But the IRS is not alone in taking steps to protect taxpayer data. All states now taxpayer security breach notifications laws. And Virginia recently expanded its requirements, now mandating that tax professionals report any taxpayer data breach within a “reasonable amount of time." Enhancement of existing law: This new... Read more →
Donald J. Trump addresses troops at the Fort Drum, New York, army base prior to signing the 2019 fiscal year defense authorization bill. (White House photo; click image to watch Trump's address, as well as opening remarks by Vice President Mike Pence, on Twitter) Donald J. Trump today signed a defense spending bill that's received almost as much attention for the lawmaker it honors as for the billions in military funding it authorizes over the next fiscal year. Capitol Hill lawmakers dubbed H.R. 5515 the "John S. McCain National Defense Authorization Act for Fiscal Year 2019" in tribute to the... Read more →
Amazon makes money hand-over-fist year after year and that has propelled founder Jeff Bezos to the top of myriad "richest person" lists. But a portion of its success also can be attributed to the billions his company has received in state and local tax subsidies over the years. And that tally will balloon when eventual HQ2 tax subsidies are included. Even at Google in San Francisco, Amazon packages dominate the delivery cart. (Photo by moppet65535 via Flickr CC) Amazon has been promised or received almost $1.6 billion in subsidies from state and local governments over the last 18 years. And... Read more →