Just in time for wedding season: The marriage bonus, or penalty, after the TCJA. TPC has updated its marriage penalty and bonus calculator for 2018, including provisions of the Tax Cuts and Jobs Act. TPC’s Daniel Berger explains: “Most couples will pay lower income taxes after they are married than they would as two separate taxpayers (a marriage bonus), but some will pay a marriage penalty. Typically, couples with similar incomes will be hit with a penalty while those where one spouse earns significantly more than the other will almost always get a bonus for walking down the aisle.”
Home is where the deduction is. Or maybe, was. Forbes explains how the TCJA has changed the rules surrounding the deductibility of home office expenses. As long as one is self-employed, the rules haven’t changed. But employees can no longer deduct home office expenses even if they do their work out of their house. The TCJA’s increased standard deduction aims to make up the difference.
Making the rounds on Capitol Hill. Politico reports that President Trump’s nominee for IRS commissioner, tax lawyer Charles Rettig, has begun visiting senators ahead of a future confirmation vote. This on the day that the Senate confirmed Trump’s choice for Secretary of State but his pick to head the VA withdrew in the face of alleged past misbehavior. No word on when the Senate will vote on Rettig.
Michigan voters will decide whether to legalize recreational marijuana in November. The state agreed that there are enough petition signatures to put an initiative on the November ballot. It would permit adults age 21 and over to own and grow small amounts of marijuana for recreational use. Businesses would be permitted to develop a retail market. The state would levy a 10 percent excise tax on retail marijuana sales, in addition to the state’s 6 percent sales tax.
Down Under: Ditching a tax hike. Australia’s Treasurer Scott Morrison said yesterday that he will not levy a 0.5 percentage point increase in the national health tax. That tax was designed to raise $6.2 billion over three years. Prime Minister Malcom Turnbull said, “Wherever we can, the Turnbull government will relieve the tax burden on Australians for one simple reason: it’s their money.” There’s at least one more reason: There’s an election scheduled for next year.
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.
