Every American taxpayer is waiting to see what specific tax plan Donald Trump will implement as President of the United States. The first part of this blog addressed the differences between Trump’s 2015 proposed tax plan and his current 2016 tax plan. While there are differences, there are, of course, the constants in Trump’s tax proposals, which demonstrate the tax policies that Trump has emphasized as important from the beginning of his presidential candidacy.
It remains to be seen the specific tax plan that Donald Trump will implement as President of the United States. The effects of Donald Trump’s tax plan will depend on taxpayers’ income and tax planning. Some think that Trump’s plan will significantly reduce income and corporate taxes, and eliminate the estate tax. It seems the plan’s largest effect on individual taxpayers will be to reduce the top tax bracket 6.6 percentage points from 39.6 percent to 33 percent.
7 Deadly Tax Sins
When it comes to the IRS, some bad acts are worse than others. We have compiled below the top ones to avoid at all costs. However, if you should find yourself in the middle of one, you should certainly call tax attorneys to get you out of the bad situation (yes, it is a bad situation).
Did you know you could be responsible for your parents’ unpaid bills? Ever heard of Filial Responsibility Laws? Well, these are laws obligating you to provide financial support for your indigent parents. Yes, obligated under law. According to the National Center for Policy Analysis, 21 states across the country (including states like Connecticut, New Jersey and Massachusetts) allow for a civil action to obtain financial support for indigent parents. At least 12 states may impose criminal penalties on children who refuse to support their parents. Though rarely enforced, these laws may be dusted off by states looking to save money on Medicaid bills.
Earlier this year, the Internal Revenue Service announced it is beginning protocols for processing tax returns using the Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC). The IRS is sharing this information to help taxpayers, tax preparers, and other tax professionals prepare for the opening weeks of the 2017 filing season. The IRS is attempting to ensure taxpayers receive a correct and accurate refund.
The Protecting Americans from Tax Hikes Act of 2015 (PATH Act) was enacted in December of 2015, which made several changes to the tax law affecting taxpayers with families. This change begins Jan. 1, 2017, and therefore may affect some returns filed early in 2017.
For taxpayers seeking a new job in their same line of work, a tax deduction for some job search expenses may be available. First and foremost, these expenses must be related to a job search in a taxpayer’s current occupation, as expenses related to a search for a job in a new occupation may not be deducted. If an employer or third party provides reimbursement for the expense, it may not be deducted.
Here are some expenses that may be deducted:
- Employment and job placement agency fees;
- Costs of preparing, copying and mailing résumés to prospective employers;
The Consolidated Appropriations Act of 2016, enacted Dec. 18, 2015, extends a long list of expired tax provisions into the future. Unlike past extension legislation, Congress extended many provisions permanently. In more traditional fashion, some of the others were extended for five years, and many for two years. The Joint Committee on Taxation estimates that the total cost of the tax provisions in the bill will be $622 billion over 10 years. Without Congress extending these various provisions, millions of Americans were in danger of losing these beneficial tax breaks by 2017.
Many taxpayers overlook the long list of deductions that they may take when completing and filing their tax returns. The IRS has estimated that millions of taxpayers overpay their taxes each year mainly because they fail to avail themselves of all of the possible deductions. The tax professionals at the Thorgood Law Firm can help ensure that all taxpayers take advantage of any and all deductions that may apply to them. Here is the fourth part of our multi-part blog on the most overlooked tax deductions:
HEALTH, CHILD CARE, AND CHARITY DEDUCTIONS