Welcome to Part 4 of the ol' blog's 2020 series on tax inflation adjustments. We started on Nov. 6 with a look at next year's income tax brackets and rates. Today we look at changes to tax credit, deduction and income exclusion amounts. Note: The 2020 figures in this post apply to 2020 returns to be filed in 2021. For comparison purposes, you'll also find 2019 amounts to be used in filing 2019 returns due April 15, 2020. The hubby has a chant he breaks into every year when I start working on our annual tax return: "Deduct! Deduct! Deduct!"... Read more →
Politics
Today, Nov. 5, 2019, voters in seven states — Colorado, Kansas, Maine, New Jersey, Pennsylvania, Texas and Washington — will decide, among other things, 32 statewide ballot measures. It's a variety of state constitutional amendments, initiatives, referendums, propositions and non-binding advisory recommendations. Tallying Texans' takes on taxes: Here in Texas, we're voting on four tax-related items. All are legislatively referred constitutional amendments. As the name indicates, the Texas legislature voted to put the questions to voters instead of taking up the matters themselves during the legislative session. It is a form of direct democracy. But it's also, as I see... Read more →
The National Debt Clock is a billboard-sized running total display installed on the western side of One Bryant Park, west of Sixth Avenue between 42nd and 43rd Streets in Manhattan, New York City. On Oct. 31, 2019, its numbers topped $23 trillion for the first time. The national debt is the total of all the money the U.S. government has borrowed and owes to its creditors, as well as the interest on that debt. Going from the macro to micro level, it's analogous to the total you might owe on a mortgage, a car loan and credit cards. And the... Read more →
Even more intriguing, will Donald J. Trump now become social media's definitive Florida Man? Donald Trump, especially early in his presidency, spent a lot of time at Mar-a-Lago, his South Florida club and residence. Here, Trump and Melania in April 2017 welcomed the People's Republic of China president Xi Jinping and his wife Peng Liyuan to the Palm Beach abode. Now Trump says it, not Trump Tower in New York City, will be his official residence. (Photo via Trump's Twitter account and Wikipedia Commons). The hubby and I used to live in Donald J. Trump's future full-time home. Alas, for... Read more →
Governments are always looking for ways to raise more revenue. That's true at every level. Those lawmakers also are always looking for ways to get the cash without antagonizing too many taxpayers, aka voters. So they come up with some creative taxes. Chicago leads the way with its unique tax of businesses on their use of remote computing services. Innovative tech tax: Known as the Personal Property Lease Transaction Tax, it applies to company data held on out-of-state provider stored on the internet — that still mysterious cloud that so many of us still don't understand — instead of on... Read more →
Casper, with almost 58,000 residents, is the second-largest city in Wyoming. Despite having few metropolitan areas, the Cowboy State again reigns as the place with the best business tax climate. (Photo by Adbay via Wikipedia Commons) The focus on the economy tends to be national. But businesses and consumers deal with the economic — and tax — conditions of 50 different states and the District of Columbia. Each year, the Tax Foundation takes a look at those various and varying economies and issues its State Business Tax Climate Index. The annual analysis, says the Washington, D.C.-based tax think tank, provides... Read more →
Reduced salt isn't just an issue for road safety or healthier diets. It's a contentious part of the Republican tax reform law. UPDATED, Wednesday, Oct. 23, 2019, at 4:45 p.m. Many U.S. homeowners who each year face increased property taxes tend to hate the Tax Cuts and Jobs Act (TCJA). The Republican tax reform law, whose provisions largely took effect with 2018 tax year, has limited their ability to fully deduct their big local real estate tax bills on their federal tax returns. Senate Democrats today tried to repeal the Internal Revenue Service regulation that undercut state efforts to salvage... Read more →
Nome, Alaska, is one of the cities in The Last Frontier that collects a local sales tax. The state's Gold Rush city is among the municipalities that will be able to unite under a new plan to collect sales taxes on online purchases. (Image: Wikipedia Commons) Alaska is known in the tax world as the only state that has no income or sales tax. The key word here, though, is state. The Last Frontier's local jurisdictions are allowed to levy local sales taxes. These tax-collecting communities now have a plan to work together to collect tax on online sales. Creation... Read more →
More than a dozen states now provide marketplace options to health care shoppers. And although the federal enrollment mandate and penalty is gone, some states still require their residents to get coverage or pay a price. Plus, federal tax help remains for some seeking medical insurance on their own. The annual employee benefits enrollment period, usually referred to as open season, is underway or about to begin across the country. During these weeks, workers choose from an array of employer-provided and usually tax-favored benefits. I'll be writing more on this shortly. You can read more on the annual benefits selection... Read more →
I've dealt with bill collectors over the years. Fortunately for me, it's been on behalf of a couple of relatives who found themselves in over their heads financially. Fortunately for my family members, after much — way too much — and often contentious back and forth, we were able to come to a satisfactory resolution. That's why I tend to share former Taxpayer Advocate Nina Olson's skepticism about the way that private collection agencies, or PCAs in tax-acronymese, interact with folks who owe taxes. But despite my, Olson's and many others' lingering distrust of these operations, private debt collect is... Read more →
This is a regular spread in our kitchen, not just on Taco Tuesday or today's National Taco Day. (Kay Bell photo) Today is National Taco Day, which raises a big question here in Texas. Why is there just one specific day celebrating taco consumption? (Corollary question: why isn't it on an alliterative Tuesday?) We Lone Star State residents consume vast quantities of soft and crispy/crunchy tacos multiple times every day, starting with the most important meal of the day, the breakfast taco. Various foodstuffs, various taxes: The day commemorating a Tex-Mex favorite also raises the question among tax geeks about... Read more →
The wealth-tax proposal advocated by Sen. Elizabeth Warren includes a hefty marriage penalty, according to one leading economist's analysis. (Photo courtesy Warren's Facebook page) It's another weekend, so that means it's time for another look at wealth tax proposals. Yeah, I know it seems like I'm in a bit of a rut, having posted about proposals from Democratic presidential hopefuls in recent weekends (on Aug. 18, Sept. 14 and a Monday, Sept. 16). But the suggested ways to get more money from the rich are still getting attention. Wealth tax roadblocks: Personally, I don't think any of these sweeping measures... Read more →
Nonprofits are a bigger part of our lives than we tend to realize. The hospital your or your children were born in likely was a nonprofit. That museum you visited on your last vacation opens its doors as a nonprofit entity. And, of course, the house of worship you attend each week is one, too. In addition, millions annually give time and money to nonprofit groups. In most instances, cash donations to charities are not driven by tax breaks. Folks simply give to a favorite charitable organization because they support its goals. Still, says a new report from the National... Read more →
Lyft and Uber rides would face a new fee in Seattle to help pay for a public transportation option. (Photo by Daniel X. O'Neil via Flickr Creative Commons) The hubby inherited some gas leases from a distant relative many years ago. It's not quite the same as Texas legend Eddie Chiles' famous urging that "if you don't have an oil well, get one," but the royalties have come in handy. One of the first purchases we made using this money was to buy new bicycles. We got a kick out of fossil fuels paying for a more climate-friendly way to... Read more →
Vaping was once thought to be a safe alternative to cigarettes. That perspective is changing. Dramatically. Nationwide, 530 cases of lung illnesses believed to be from vaping have been reported in 38 states and one U.S. territory. Seven deaths have been reported from six states. When the illnesses and fatalities started surfacing, even the White House reacted. Donald J. Trump initially floated a ban on some electronic cigarettes, but that position apparently has been revised. Some Republican political data show that a no-vaping position could pose a problem with Trump's electoral base. Maybe that's why Trump more recently walked back... Read more →
The Trump Administration currently is embroiled in a whistleblower controversy. But another situation where a witness to tax wrongdoing — not any alleged Donald J. Trump activity! — has worked out much more satisfactorily. A $11.5 million award has been presented to a person whose information led to the government collecting over $44.4 million in taxes, penalties and interest, according to the whistleblower attorneys involved in the case. In announcing the award, attorneys Stephen M. Kohn of the Washington, D.C. firm of Kohn, Kohn and Colapinto and Dean Zerbe of the Houston-based firm Zerbe, Miller, Fingeret, Frank & Jadav, lauded... Read more →
Some Bureau of Land Management (BLM) employees in Washington, D.C., are being offered financial incentives to move to the agency's Grand Junction, Colorado, office, which is near the scenic McInnis Canyons National Conservation Area pictured above. (BLM photo) Despite objections from workers and some members of Congress, the Interior Department is moving forward with its plan to relocate about 250 Washington-based Bureau of Land Management (BLM) employees to western states. The Trump Administration says the move ultimately will save taxpayer dollars, but it's willing to spend some federal cash in the short-term to win over employees who have concerns about... Read more →
U.S. Sen. Ron Wyden (D-Oregon) during a recent Senate Finance Committee hearing. (Screenshot from Wyden's YouTube channel) Most of the tax the rich action has been coming from Democrats who want to move into the White House in 2021. Now a top Senate tax committee member has joined the call to collect more from wealthier Americans. And he has specific plans for the new revenue. Sen. Ron Wyden's proposal would tax ordinary income and capital gains at the same rates. Currently, capital gains generally are taxed at lower rates, ranging from zero for some lower-income investors to 15 percent for... Read more →
via GIPHY If you've been following the pack of politicians seeking the Democratic Party's presidential nomination, you know that ways to tax the wealthy is a common thread. But there are as many proposals to do that as there are White House wannabes, although Elizabeth Warren is leading in suggested changes to get more tax money from the rich. There's the general wealth tax, corporate book profits tax, new Social Security wage tax, new Social Security net investment income tax (NIIT), new estate tax and every Democrats' favorite, repealing the Tax Cuts and Jobs Act (TCJA) lower rates for higher... Read more →
Click image to watch Treasury Secretary Steven Mnuchin's touting of Tax Reform 2.0 in 2020 via The Hill. There's not much hope that a divided Congress will get much done on taxes in the remaining months of 2019, but at least one Trump Administration official is more optimistic about 2020. Treasury Secretary Steven Mnuchin said Monday that the White House would consider proposing a new package of tax cuts next year. Will Tax Reform 2.0 actually happen in 2020? Is this just a political ploy leading into what could be a difficult re-election campaign? Will tax cuts become the new... Read more →