Federal Tax

Key Findings Comparisons of capital gains tax rates and tax rates on labor income should factor in all the layers of taxes that apply to capital gains. The tax treatment of capital income, such as capital gains, is often viewed as tax-advantaged. However, capital gains taxes place a double-tax on corporate income, and taxpayers have
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Key Findings The Alternative Minimum Tax (AMT) requires a subset of taxpayers to compute their income tax liability twice—once under the ordinary individual income tax, and again under the AMT that allows fewer tax preferences—and pay whichever tax is highest. The Tax Cuts and Jobs Act (TCJA) increased the AMT’s exemption and exemption phaseout. These
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Last week, the Florida State Senate Committee on Infrastructure and Security approved Senate Bill 1148 by a 5-3 vote. The bill makes peer-to-peer car sharing firms liable for the state’s $2 per day rental car excise tax and related taxes and fees. Rather than extend the car rental excise tax on to peer-to-peer car-sharing arrangements,
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A commonly overlooked reason for the difference in income levels among taxpayers is the life cycle issue. As we mature and gain work experience, our incomes tend to rise; income typically peaks when we near retirement. Viewing annual Internal Revenue Service data only provides a snapshot of a taxpayer’s situation rather than a fuller picture
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Most U.S. businesses are not subject to the corporate income tax. Instead, most U.S. businesses are pass-through businesses, such as partnerships, S corporations, LLCs, and sole proprietorships. These businesses “pass” their income “through” to their owners, which is reported on the owners’ individual income tax returns. Overall, pass-through businesses account for more net income than
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Key Findings The cost basis of property transferred at death receives a “step-up” in basis to its fair market value. This eliminates an heir’s capital gains tax liability on appreciation in the property’s value that occurred during the decedent’s lifetime. Property transferred before death receives “carryover basis,” which means the donor’s original cost basis is
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Policymakers have recently proposed various ways of raising taxes on the richest Americans and making the tax code more progressive, including wealth taxes, estate taxes, and a higher marginal income tax rate. Changing the tax system, however, requires first understanding how it currently operates, and what kinds of transfers are already in place. Data from
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In early February, Rep. Bill Pascrell Jr. (D-NJ) and Sen. Bob Menendez (D-NJ) introduced a bill to repeal the $10,000 cap on the state and local deduction (SALT) and raise the top tax rate on ordinary income from 37 percent to 39.6 percent.[1] The SALT deduction cap was introduced as part of the Tax Cuts
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Key Findings Senator Sherrod Brown (D-OH), Representative Bonnie Watson Coleman (D-NJ), and Representative Ro Khanna (D-CA) introduced legislation to expand the Earned Income Tax Credit called the Cost-of-Living Refund Act of 2019. This legislation was recently reintroduced The Cost-of-Living Refund Act of 2019 would reduce federal revenue by $1.8 trillion between 2020 and 2029 on a conventional
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