Displaying items by tag: irs

(Washington)

Few would argue that the tax cut passed in late 2017 was one of the main drivers of the strong economy we saw this year. Corporate earnings have been stellar, the economy is expanding at a good clip, and the labor market is tight. However, the IRS looks about to undermine the benefit of the tax cuts. The agency just announced a new policy for 2019 regarding how it accounts for inflation. The move will undermine much of the value of the tax cuts by raising tax bills for almost all Americans. The new policy will increase tax revenue for the government by $133.5 bn over the next decade.

FINSUM: This is the kind of policy that is going to hurt more over time. That said, the current deficit is huge, so from a fiscal responsibility view it is hard to argue this is unnecessary.

(New York)

While some New Yorkers prepaid their property taxes last year in an effort to offset the decline of SALT deductions this year, others weren’t so proactive. Now that Washington has blocked states’ ability to work a loophole around classifying taxes as charitable giving, residents of high tax states may have a small window of opportunity—just 4 days—to avoid full taxes. The new regulations will take effect on August 27th, which means residents have until then to donate to the tax-charity funds which have been established.

FINSUM: Such last minute payments could be challenged after the fact, but considering the effective date of the new regulations, they seem like they would go through.

(Washington)

There have been relatively few updates on the Trump probe in recent weeks. Ever since the debate over whether Trump should let Mueller interview him calmed down, there has been little news. Now, reports are coming out that a group of investors in the Kushner family business—the family of Trump’s son-in-law—have been subpoenaed by the IRS and the Department of Justice. However, at this point, reports say the subpoenas are unrelated to the more broad probe into the White House’s connection to Russia.

FINSUM: Hard to see what is really going on here, but suffice it to say that the overall probe is deepening.