Tax reform Feed

If the changes to Form 1040 this filing season frustrated you, there's some good news and some bad news. The good news is that the Internal Revenue Service is revising the Form 1040 to be used for 2019 tax filings. No, it's still not quite a postcard. But there will be fewer schedules to file — three instead of six — if your taxes are a bit more complicated. The bad news is that many of us still have to fill out those schedules (and the accompanying forms for additional tax break claims that remained) instead of having things on... Read more →


House Ways and Means Chairman Rep. Richard Neal (D-Massachusetts) opens today's (June 20, 2019) hearing on tax extenders and disaster tax relief. (Screen shot of official W&M YouTube hearing). UPDATE, June 21, 2019: After almost more than 11 hours of discussion, the House Ways and Means Committee on Thursday, June 20, passed along a 25-to-17 party-line vote a measure to extend through 2020 a variety of tax breaks that expired in 2017 and 2018 or will expire at the end of this year. The bill also provides tax relief for those who affected by certain major natural disasters. The House... Read more →


When it comes to expired tax laws, Congress is in much the same situation as the builders of this unfinished bridge. The basics are there, but there's still work to be done. (Photo by Paul Mannix via Flickr CC) UPDATE, June 21, 2019: After almost more than 11 hours of discussion, the House Ways and Means Committee on Thursday, June 20, passed along a 25-to-17 party-line vote a measure to extend through 2020 a variety of tax breaks that expired in 2017 and 2018 or will expire at the end of this year, some of which are highlighted in this... Read more →


Rep. Richard Neal (D-Massachusetts), chairman of the Ways and Means Committee (top row, center), is looking to renew at least some expired tax provisions, known as extenders. The ranking Republican on the House tax-writing panel, Rep. Kevin Brady of Texas (top row, right) is not impressed with Neal's proposal. (Photo courtesy House Ways and Means Democrats Facebook page) Is it finally the end for extenders? Yes, no or maybe, depending on who you ask. Many members of Congress on both sides of the aisle say enough is enough with the perpetually renewed technically temporary tax breaks known as extenders. They... Read more →


The Internal Revenue Service did do away with two versions of Form 1040 and shortened, a bit, the lone document we now use to file our annual tax returns. But the tax agency went the other way with Form W-4. This form, officially titled Employee's Withholding Allowance Certificate. is what we give to our bosses to ensure that the correct amount of income taxes come out of our paychecks each pay period. Now instead of a brief, 10-item form, the IRS' W-4 proposed revision takes up a full letter-sized page. And while there are just seven boxes to fill out,... Read more →


Rep. Kevin Brady (R-Texas), chairman of the House Ways and Means Committee when his party pushed through tax reform in December 2017, celebrates in June 2018 the six-month anniversary of the Tax Cuts and Jobs Act. A new Congressional report, however, doesn't have much positive to say about the new tax law's first-year economic effects. During the rushed, ahem, debate of the Tax Cuts and Jobs Act (TCJA) in late 2017, its Republican sponsors touted the bill's economic benefits. The cuts to U.S. businesses would prompt more domestic investments. Workers would get bonuses and/or raises. This would speed up the... Read more →


Hurricane Harvey made landfall along the Texas Gulf Coast on Aug. 25, 2017. (National Hurricane Center satellite radar image) After a record-setting run of tornadoes over the last two weeks across not just Tornado Alley and the Midwest, but also into the MidAtlantic, the Big Apple even the nation's capital city, it's time for a weather break. Or not. The 2019 hurricane season officially starts June 1. Yes, I'm starting to look at the tropics a bit early, especially since we got a bit of a preview on May 20 when this year's first name storm popped up near Bermuda.... Read more →


Gold Star families aren't the only ones facing unexpectedly higher taxes under kiddie tax changes in the Tax Cuts and Jobs Act (TCJA). Some students who receive college scholarships or grants now face bigger tax bills, too, under the tax reform law that took full effect in 2018. Previously, scholarships or grants for nontuition expenses like room and board were taxed at the same marginal rate that the students' parents paid. That meant lower- and middle-income students generally paid lower tax rates on the educational financial assistance. But the TCJA now applies the higher trust and estates tax rate, which... Read more →


Memorial Day, our annual remembrance of the men and women who died while serving in the U.S. Armed Forces, is just a week away. Many members of Congress will be back home on May 27 taking part in Memorial Day ceremonies honoring military personnel for their ultimate sacrifice. But before then, Senators and Representatives are focusing how to correct a provision in the Tax Cuts and Jobs Act (TCJA) that has caused some military heroes' families to face higher tax bills. TCJA advocates, who hurried the Republican-written tax reform through Congress in late 2017, say the revisions to the so-called... Read more →


If you filed your taxes before May 16 and your earnings included investment income, you might want to take another look at your return. The Internal Revenue Service announced on its website yesterday, May 16, that the 2018 Schedule D tax worksheet in that form's instructions contained an error. "The tax calculation did not work correctly with the new TCJA [Tax Cuts and Jobs Act] regular tax rates and brackets for certain Schedule D filers who had 28% rate gain (taxed at a maximum rate of 28%) reported on line 18 of Schedule D or unrecaptured section 1250 gain (taxed... Read more →


New parents Harry and Meghan don't have to worry about the expense of their new bundle of joy. But for us non-royals, raising children is costly. We former colonists here across the pond can get some help covering those costs thanks to several U.S. tax breaks. An obviously elated Prince Harry announces the birth of his and wife Meghan's son. (Screen shot from the Sussex Royal Instagram) It's a boy! Watchers of the Royal Family in the United Kingdom, here across the pond and yes, worldwide, are celebrating today's announcement that the Duke and Duchess of Sussex are now parents... Read more →


Today is the start of the annual Small Business Week. And yes, you can combine it with Cinco de Mayo and raise a margarita to your favorite entrepreneur. These 30 million or so smaller companies are hailed as America's backbone. Approximately 10 million are women-owned, 29 percent are minority-owned and nearly 10 percent are veteran-owned. Running a small business has never been easy. In fact, their size tends to put more pressure on such operations. Profit margins are thin. The ability to offer benefits to workers is stretched. And small companies tend to be more at the mercy of the... Read more →


It was a gorgeous sunset at this Astros game at Minute Maid Park, but the Houston MLB franchise and other professional sports teams are looking at a recent IRS ruling that provides them a bright new dawn for favorable tax treatment of player trades. (Photo by Kay Bell) It's a busy time for professional sports fans. National Basketball Association (NBA) and National Hockey League (NHL) playoffs are in full swing. Major League Baseball's (MLB) early season is already full of surprises. Just what is wrong with the World Series champion Red Sox and Chris Sale? The National Football League (NFL)... Read more →


High tax filing season is over and the numbers have been tallied. Unfortunately for Republicans who still are fighting the public relations war over their major tax reform law, the figures aren't good. Yes, fractionally more money has been delivered to taxpayers through April 21, almost a week after the filing deadline for most U.S taxpayers. But the average refund check remains smaller than it was last year. In 2018, the average refund was $2,780. This year, it came to $2,725. In case you're not good at math in your head (I'm not) and don't have a calculator handy, that's... Read more →


Umbrellas at the Venetian in Las Vegas (Photo by Kay Bell) April is the proverbial month of showers. That typically refers to the rain that falls to nourish the flowers that are predicted to arrive in May. But this month also is known for personal precipitation. Yep, I'm talking tax-time tears. Some folks will cry when they discover how much they owe. Others will shed tears of frustration as they struggle to decipher the Tax Cuts and Jobs Act (TCJA) changes that affect returns for the first time this 2019 filing season. And for others, it will be tears of... Read more →


We've got just more than three weeks before our 2018 tax returns are due, but most of us aren't in any hurry to complete this task. Through March 15, the Internal Revenue Service reports that it has received almost 76 million 2018 tax year returns. That's 2.5 percent fewer than this point in last year's filing season. In fact, the IRS latest filing season data shows that 9 of 12 tracked areas are still slightly behind last year's pace. Only visits to IRS.gov, tax returns directly e-filed by taxpayers and directly deposited refunds are up over 2018 numbers by 11.2... Read more →


Photo by Kumar's Edit via Flickr I've been married a long time. To the same guy. Marriage is not always easy and we don't even have a boss stirring up trouble between us. But we've made it through the tough times. And now as we patch things up when we do have our differences, we joke that we're staying together because it would be a bigger hassle to divorce. Sometimes, though, couples can't work through their troubles and decide to officially end their marriages. When that happens, among all the other issues, there are tax matters to consider. Here are... Read more →


College and its ever-increasing costs certainly have gotten a lot of attention. There's the group of Democrats seeking their party's 2020 presidential nomination. Obviously spurred by the enthusiastic supporters of Independent-turned-temporary-Democrat Sen. Bernie Sanders and his promise of free college, many other White House wannabes also are talking up educational assistance. Then there's this week's Operation Varsity Blues. You might not have caught the name, but let me drop two others to spur recognition: Felicity Huffman and Lori Loughlin. Yeah, that's the name federal investigators gave to their take down of a far-reaching college admissions scheme. Wealthy parents, elite school... Read more →


Lee County, Alabama, March 3 tornado damage. (Photo: Nicholas Baretto via Twitter) As expected, once the White House declared parts of Alabama a major disaster area, the Internal Revenue Service followed up by offering affected residents a variety of tax relief. Victims of the deadly tornadoes and severe storms that raked areas of the Yellowhammer State now have until July 31 to file some individual and business tax returns and make certain tax payments. "With the regular deadline just a few weeks away, we want storm victims to focus on their families and recovering, rather than worrying about the tax... Read more →


Part of today's International Women's Day celebrations are for the continuing employment advances by women. Our 21st century progress is due in large part to the pivotal roles of female employees in traditionally male jobs, like this woman machining parts for transport planes at the Consolidated Aircraft Corporation plant in Fort Worth, Texas, in 1942. (Photo via Wikimedia Commons) Back in 2017 when Congress was formulating the comprehensive tax law changes that would become the Tax Cuts and Jobs Act (TCJA), the #MeToo movement was in full force, shining a light on the prevalence of sexual assault. As the TCJA... Read more →