New IRS guidance on tax withholding. The agency has extended until February 28 the effective period of the 2017 Form W-4. The agency had hoped to have a new withholding form ready by February 1 to reflect some changes in the Tax Cuts and Jobs Act. It is also suspending the requirement that employees file new W-4s within ten days of a status change that would reduce withholding allowances.
Will taxpayers file on a post card? TPC’s Howard Gleckman explains why the answer is no. “The 2017 IRS Form 1040 includes 98 lines and boxes for calculating tax payments. For 2018, the TCJA is likely to eliminate a grand total of five (or maybe six) of those lines. And the new law will likely require at least one new one.” Some filers will be able to use the IRS’s existing postcard—the 1040 EZ—but most will not, even if they take the standard deduction.
“I didn’t get a raise, did you?” A new Reuters/Ipsos poll released yesterday finds that 2 percent of Americans report a raise, bonus or other additional benefits thanks to the Tax Cuts and Jobs Act. Moreover, Moody’s Investors Services says the TCJA will have little effect on the US economy and that companies are more likely to reward shareholders than expand their companies. Odds are good that the President will not cite this news during tonight’s State of the Union Address.
CPAs have a wish list. Politico reports that The American Institute of Certified Public Accountants has sent the IRS and Treasury a list of 39 elements of the TCJA where practitioners need "immediate guidance." They include everything from the tax treatment of corporate and non-corporate businesses to accounting rules, to penalties for underpayment of individual taxes.
Deutsche Bank: Big loss, bigger bonus pool. The German bank has posted its third consecutive year of losses but has increased its bonus pool to $1.2 billion, or €1 billion. The TCJA required the bank to pay €1.5 billion in taxes late last year, but a bank spokesman said “We decided that we shouldn't punish our staff for a tax reform that has taken place in the United States.”
India’s tax overhaul results in more taxpaying companies. The government reports an estimated 3.4 million new businesses registered to pay India’s retooled goods and service tax. The tax went into effect last July. There were already 6.4 million business taxpayers on India’s GST rolls.
If you’d like to tell us about a new research paper or have any comments about the Daily Deduction, TPC’s summary of the day’s tax news, write Renu Zaretsky at [email protected]. You can sign up here to receive the Daily Deduction as an email newsletter every weekday morning (Mondays only when Congress is in recess) at 8:00 am.
