The 2017 Republican smash-and-grab tax reform bill made two related changes to individual tax deductions: The standard deduction was raised to 12,000 for individuals and 24,000 for joint filers; and the state-and-local-tax (SALT) itemized deduction was limited to $10,000. Meanwhile, the charitable contribution deduction was unchanged, and the mortgage interest … [Read more...] about “Charitable clumping” is a clever marketing campaign, not a tax planning strategy
taxes
Congress wants you to sell stocks to pay your taxes
The tax bill Republicans are planning to pass in the next day or two is not a good bill, and hopefully it will not pass. The fact that people have correctly identified it as a bad bill, however, has given rise to quite a bit of sloppy thinking about why, exactly the bill is so bad. The effect of replacing the personal exemption with a larger child tax credit is genuinely … [Read more...] about Congress wants you to sell stocks to pay your taxes
The effect of estate tax repeal on the 529 scam
One of the first posts I wrote here was about the 529 scam. I explained that 529 plans are a way for wealthy individuals to permanently shield an almost unlimited amount of assets from taxation, and that the scam was made sustainable by the very large number of middle class people saving a very small amount of money who are absolutely convinced that 529 plans are a way to save … [Read more...] about The effect of estate tax repeal on the 529 scam
How Ron Johnson’s weird idea for corporate tax reform might work
Senator Ron Johnson of Wisconsin announced last week that he couldn’t support the Senate tax reform bill because it failed to align the treatment of corporate income (which is taxed once when it’s recorded as profit and again when distributed to shareholders) with “passthrough” income, which is taxed only when it is reported on an individual taxpayer’s return. Rather than … [Read more...] about How Ron Johnson’s weird idea for corporate tax reform might work
Five questions about tax “reform”
Back during the Affordable Care Act repeal debate I wrote pretty extensively about the threat repeal posed to entrepreneurs and entrepreneurship by preventing self-employed people from being able to sign up for affordable, comprehensive health insurance. Instead of the doing the same thing for the House and Senate tax "reform" bills, I thought I'd take a different approach … [Read more...] about Five questions about tax “reform”