…the AMT now applies to eight times as many taxpayers as it did 20 years ago, and common AMT “triggers” often are less esoteric than in the past. “They can be as simple as having three or more children, taking a large capital gain, or—especially—deducting state and local taxes,” says Dave Kautter, managing director at American University’s Kogod Tax Center, who studies the AMT.
That’s pretty much what I see in our practice. AMT is rare for taxpayers with income under $100,000, and usually occurs in large families. It can be impossible to avoid AMT in the $200,000 – $500,000 income range, especially in a state with an income tax. Above $500,000, it typically involves large capital gains. Both AMT and regular tax have the same 20% tax on capital gains, and the AMT doesn’t let you deduct the related state income taxes, so the AMT will kick in.
I think it must mean that it was a political project and they were hard at work figuring out how to make it not look like what she knew it was. That’s a smoking gun.
Phony scandal. Nothing to see here…
TaxProf, The IRS Scandal, Day 298
WSJ, No Change: Former IRS Official to Take the Fifth. “A lawyer for former Internal Revenue Service official Lois Lerner said Sunday that she will decline to testify about IRS targeting of grass-roots conservative groups, contradicting a top GOP lawmaker.” Presumably because there’s not a smidgen of wrongdoing.
TaxProf, Mulligan: ObamaCare’s Multiple Taxes Are Shackling the Job Market. The TaxProf quotes from the University of Chicago’s Casey Mulligan:
Once we consider that the new law has an employer penalty, too, the labor market will be receiving three blows from the new law: the implicit employment tax, the employer penalty and the implicit income tax. Regardless of how few economists acknowledge the new employment tax, it should be no surprise when the labor market cannot grow under such conditions.
It’s funny how the same people can argue for high tobacco taxes to curb smoking insist that employment taxes won’t curb hiring.
Jason Dinesen, Accounting for the 0.9% Medicare Surtax on Iowa Tax Returns
Kay Bell, Delayed Tax Refunds, TC 570 And An Important Distinction . Don’t jump to conclusions about your delayed refunds.
Jack Townsend, IRS CI Is Looking at Renunciations of Citizenship Just in Case . Looking to take one last shot at the fleeing jaywalkers.
Every now and then we read of someone finding something valuable. This time, it’s a California couple who found a stash of gold coins on their property. According to this story, the couple found eight cans containing 1,400 coins, valued at approximately $10 million.
The joy of the moment is tempered, of course, by the existence of income taxes, both federal and state. Must the couple pay tax? Yes. The value of the coins is included in the couple’s gross income. It is ordinary income. The law is settled.
Easy come, easy go…
Martin Sullivan, The Beginning of the End of Tax Reform (Tax Analysts Blog):
Enactment of the research credit in 1981 was the antithesis of simplification. It has a highly complex incremental structure and, even more problematic, it assigns tax directors and IRS agents the impossible task of distinguishing research from ordinary business expense. The Camp draft retains the credit and eliminates expensing. The opposite approach would be more sensible.
The research credit study industry is full of former Congressional staffers who like things the way they are.
William McBride, Scott Hodge, Top Line Assessment of Camp’s Tax Reform: Increases Progressivity and Taxes on Business and Investment (Tax Policy Blog):
In general, Camp simplifies and lowers tax rates for many taxpayers and businesses, but does so through a net tax increase on businesses and taxpayers earning over $200,000. As a result, the plan makes the individual tax code even more progressive, it increases the amount of redistribution from high-income taxpayers to other taxpayers, and it worsens the current bias against saving and investment—all of which will be a drag on long-run economic growth.
It looks more and more like the Camp plan was a false move.
William Gale, Dave Camp’s pitch to overhaul U.S. taxes: An impossible dream? (TaxVox)
It’s getting real in New Jersey, according to the London Daily Mail online: ‘Ready to plead guilty': Teresa and Joe Giudice set to reach plea deal on 41 charges of fraud and tax evasion. If they were cheating on taxes, becoming national celebrities could have been a bad move.