In his first 100 days as president, Joe Biden has proposed more than a dozen significant changes to the U.S. tax code that would raise upwards of $3 trillion in revenue and reduce incentives to invest, save, and work in the United States.
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Since 1987, unemployment compensation benefits have been subject to federal income tax and, in most states, to state income tax. According to the Congressional Research Service, such treatment—including unemployment compensation benefits in taxable income—is common across industrial nations.
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The IRS recently announced the extension of tax filing and payment deadlines from April 15th to May 17th to help taxpayers navigating the many tax changes amid the pandemic and give the IRS opportunity to clear its backlog of tax returns and correspondence.
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Newly published data from the Internal Revenue Service (IRS) shows that the first round of economic impact payments primarily benefited households earning less than $100,000.
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President Biden may make greater use of regulatory changes to modify how tax law is interpreted and administered. There are several areas where a Biden Treasury Department, likely led by former Federal Reserve Chair Janet Yellen, may focus.
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The latest IRS data continues to illustrate that the net effect of the Tax Cuts and Jobs Act was to reduce effective tax rates across income groups. In 2019, the TCJA again expanded the use of several deductions and credits, made the standard deduction more favorable than itemizing, and lowered taxes for most taxpayers.
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The size and scope of the tax changes within the CARES Act created significant administrative challenges for the IRS. Lawmakers should prioritize simplicity in the next round of relief.
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The U.S. Treasury Department has pushed the April 15 tax payment deadline to July 15. However, taxpayers still have to file their tax returns by the usual April 15 deadline.
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While a few are hoping for a different outcome, most observers expect the IRS to disallow these new, intentional SALT workarounds that have been adopted by New York and a handful of other states.
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While rumors flew around Washington in the fall that the Tax Cuts and Jobs Act would dramatically impact retirement savings accounts, the plan has made only a few minor modifications.
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