President Biden: “I’m going to raise some taxes.” Previewing the budget plan he’ll release on March 9, President Biden said in a speech this week that tax increases are necessary, touting the recently enacted 15 percent corporate alternative minimum tax and urging tax increases on those earning over $400,000 a year. For their part, Republicans have not yet provided a budget proposal of their own, though they have ruled out cuts to Medicare and Social Security and sought to clawback the $80 billion increase in IRS funding.
A bipartisan effort to extend and expand the charitable donation deduction for non-itemizers. The legislation would allow taxpayers who do not itemize their deductions on tax returns for 2023 and 2024 to claim an above-the-line deduction worth up to one-third of the standard deduction ($4,500 to for individuals and $9,000 for joint filers). This would be far larger than the temporary above-the-line deduction of $300 for charitable donations that was in place 2021.
A fix to a glitch in retirement legislation is on the way. Tax Notes reports (paywall) that House Ways & Means top Democrat Richard Neal and Treasury Secretary Janet Yellen have discussed administrative, regulatory, and legislative options to correct an inadvertent prohibition on catch-up retirement contributions starting in 2024. The retirement provisions that passed in the budget reconciliation bill in December were meant to require taxpayers earning $145,000 or more to contribute any catch-up retirement contributions to after-tax Roth accounts. The American Retirement Association alerted Congress that a drafting error mistakenly bars all catch-up contributions to Roth or pretax accounts, regardless of income.
College scholarships are not always “free money.” TPC’s Tax Hound examines the taxability of scholarships awarded to students pursuing higher education. Depending on their use, scholarships may have tax consequences. But should they, given the many subsidies for college costs built into the tax code?
Utah bill would reveal data on commercial real estate transactions. The Senate bill would make transparent the prices paid in millions of dollars of commercial real estate transactions yearly. The lack of data on these properties has thrown the property tax system out of whack at the expense of homeowners, says bill sponsor state Sen. Dan McCay.
No $180 checks for Michiganders. The state Senate nixed a plan to send $180 checks to Michigan tax filers, which would have reduced general fund revenue for the 2022 fiscal year by $800 million. The plan was removed from tax legislation that would roll back Michigan’s personal income tax rate by 0.2 percentage points. The bill would also reduce taxes on certain retirement income and increases Michigan’s Earned Income Tax Credit. The legislation now moves on to the House.
Minnesota lawmakers push for $13 billion in tax cuts and one-time payments. The state’s House and Senate Republicans have a “Give it Back” tax plan for Minnesota’s $17 billion budget surplus. Provisions include rebate checks worth up to $2,500 for state residents and eliminating the state tax on Social Security income.
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