Federal Tax

Key Findings Advances in technology have enabled workers to connect with customers via online platform applications for work ranging from ridesharing to home repair services. The rise of gig economy work has reduced barriers to self-employment, bringing tax challenges like tax complexity and taxpayer noncompliance. Workers who previously relied on employers for withholding of income
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Key Findings Under current law, the tax code exempts credit unions from paying corporate income taxes. The Joint Committee on Taxation estimates the exemption will reduce federal revenue by $1.9 billion in 2019. Historically, the exemption was justified on the grounds that credit unions would fulfill three purposes: restrict their customer base to people with
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Key Findings Currently, the home mortgage interest deduction (HMID) allows itemizing homeowners to deduct mortgage interest paid on up to $750,000 worth of principal, on either their first or second residence. This limitation was introduced by the Tax Cuts and Jobs Act (TCJA) and will revert to $1 million after 2025. In 2018, less than
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Among the unfinished business awaiting lawmakers when they return from their two-week recess are technical corrections to the 2017 tax law. Last month, the Internal Revenue Service and Treasury Department issued final regulations for the new law’s expensing provision, noting that the error known as the “Retail Glitch” must be fixed by legislative change, not
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The Tax Cuts and Jobs Act (TCJA) increased the standard deduction from $6,500 to $12,000 for individuals (and from $13,000 to $24,000 for married filers) and reduced the value of certain itemized deductions. These changes reduce the percentage of taxpayers that itemize deductions and limit the ability of the tax code to encourage certain types
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The incidence of increased vaping among teens and the resulting lung disease has captured the attention of everyone from President Trump, who Wednesday called for a ban on flavored nicotine liquids used for vapor products, to Senate Finance Committee Ranking Member Ron Wyden (D-OR), who followed by proposing legislation to levy an excise tax on
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Representatives John Larson (D-CT) and Ron Estes (R-KS) have introduced H.R. 4549, known as the “American Innovation and Competitiveness Act” (AICA), which would extend expensing for R&D costs. Under current law, companies will have to amortize R&D costs over five years beginning in 2022. In previous Tax Foundation research, we estimated that canceling the swap
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The House of Representatives on Wednesday passed the SAFE Banking Act on a 321 to 103 vote. If this bill passes the Senate and becomes law, it could have great implications for several states’ cannabis excise tax revenues. Eleven states have legalized adult-use recreational marijuana, but only seven states have operational markets with taxes levied
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On Tuesday, Presidential candidate and Senator Bernie Sanders (I-VT) released a wealth tax proposal which includes a progressive tax on household assets and income over $32 million (for married couples). Sander’s goal is to target “extreme wealth” and the tax would only be levied on the top 0.1 percent of American households annually. Sanders’s wealth
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Earlier this month, the Joint Committee on Taxation (JCT) reminded us that capital gains taxes can drastically impact realizations. This is because taxpayers can choose when they sell an asset and pay capital gains taxes. This effect could be eliminated by taxing all capital gains under a mark-to-market system. Mark-to-market taxation of capital gains would
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Democratic presidential candidate and Colorado Senator Michael Bennet wants to expand the maximum Earned Income Tax Credit (EITC) for childless workers from $529 to $3,000 in order to increase disposable income. The EITC is a refundable tax credit equal to a fixed percentage of earned income up to the maximum credit amount. Tax credits provide
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