Having failed to strip health insurance from tens of millions of low-income Americans, the Republican Congress has moved on to their next project of radically reducing the taxes paid by a sliver of high-income Americans. If you follow this debate over the course of the next few months, you'll hear a lot about the distributional consequences of their plan. The top tax rate will … [Read more...] about I am rabidly in favor of tax simplification, which is why I oppose “tax reform”
taxes
Why I do my own taxes (and why you might not)
Every year around February 1, I fire up the IRS's Free File Fillable Forms and begin the arduous process of manually inputting all my income and expenses for the year. I have what you could think of as either a very complex individual tax return or a very simple business tax return. It's a very complex individual tax return since I have to fill out Schedules C and SE in … [Read more...] about Why I do my own taxes (and why you might not)
A modest proposal for individual tax reform
I talk a lot about simplifying the tax code, for two big reasons. First, the complexity of the tax code leads to absurd economic outcomes, like arbitrary cutoffs between eligibility and ineligibility for benefits like the Retirement Savings Contribution Credit. Lest you think my concern is exclusively for the poor, I’m equally infuriated by things like the personal exemption … [Read more...] about A modest proposal for individual tax reform
S corporations: logic and illogic
I've been doing a deep dive lately into one-participant 401(k) plans, which has caused me to observe that people are often extremely unclear about what they are talking about when they talk about one-participant 401(k) contribution limits. The reason is that multiple types of legal entities can sponsor one-participant 401(k) plans, including unincorporated sole proprietors … [Read more...] about S corporations: logic and illogic
The sole proprietor’s marginal federal tax rates
[edit 6/13/17: I've been convinced that employee "elective" and employer "non-elective" solo 401(k) contributions can be made with the same money, so have slightly updated the values below to reflect that employer contributions don't have to be made with what's "left" after deducting up to $18,000 in elective employee contributions. I'll have a post soon exploring this issue in … [Read more...] about The sole proprietor’s marginal federal tax rates