Tag: Tax

37 States That Don’t Tax Social Security Benefits
Social Security Disability

37 States That Don’t Tax Social Security Benefits

While the federal government does tax some of your benefits once your income reaches a certain level, the good news is that a lot of Americans live in states that won’t tax Social Security.
In fact, there are a total of 37 states where you can enjoy your Social Security benefits without paying state taxes on this important source of income.
Which states don’t tax Social Security benefits?
It’s important to consider all taxes you may have to pay as a retiree — including taxes for property, 401(k) and pension income, sales tax, gas taxes, and other state and local taxes — when you make a decision on where to live during your golden years.
You could still owe federal taxes on Social Security benefits If you live in a state that doesn’t tax your Social Security benefits, this doesn’t necessarily mean you’ll enjoy totally tax free income from Social Security.
Not all income counts when determining if you’re taxed.
But a handful of little-known “Social Security secrets” could help ensure a boost in your retirement income.
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Seniors Get a New Simplified Tax Form for 2019

Seniors Get a New Simplified Tax Form for 2019

If you are 65 or older (or turn 65 anytime in 2019), you will have the option to use a new simple tax form for seniors, known as the 1040SR, when you file your 2019 taxes in April 2020.
The new form is provided for in section 41106 of the Bipartisan Budget Act of 2018 (BBA), a two-year budget agreement passed by Congress and signed by President Donald Trump on Feb. 9, 2018.
Additional differences between 1040EZ and 1040SR are described below, including age requirements and total income allowed.
Form 1040EZ is available to any taxpayer under the age of 65 who otherwise meets income and filing requirements.
To use 1040SR you must be 65 or older by Dec. 31, 2019, or by the end of the tax year for which you will be filing.
If you are still working at age 65 and otherwise qualify to file 1040SR, you may do so.
What About Tax Deductions?
Seniors who fill out Form 1040SR must take the standard deduction.
That said, the legislation isn’t perfect.
If you are a retiree under the age of 65 whose income sources include Social Security, pensions and investment income, you can’t use 1040SR and are also prohibited from using 1040EZ, leaving you with 1040A as your best option short of filing the full Form 1040.

There’s A New IRS Tax Scam That Comes With A Twist
Social Security Disability

There’s A New IRS Tax Scam That Comes With A Twist

But now the IRS is warning taxpayers about a new and growing scam involving criminals who steal data from tax professionals and file fraudulent tax returns.
The “refund money” goes into taxpayers’ real bank accounts ― but then these criminals use various tactics to con the taxpayer into turning those funds over to them.
In one version of the new scam, criminals pose as debt collection agents acting on behalf of the IRS.
The caller threatens the taxpayer with criminal fraud charges, an arrest warrant and a “blacklisting” of their Social Security number.
The recorded voice gives the taxpayer a case number and a phone number to call to return the refund.
One key point: The real IRS will never call or email a taxpayer.
If the mistaken refund was a direct deposit, contact the Automated Clearing House department of the bank or financial institution where the deposit was received and have them return the refund to the IRS.
If you cashed a paper check of an erroneous refund, submit a personal check, money order, etc., immediately to the appropriate IRS location with a note explaining that it’s a repayment of an erroneously paid refund.
One last thing: Taxpayers receiving erroneous refunds should contact their tax preparers immediately, says the IRS.
That’s because thieves are targeting professional tax preparers, using phishing and other schemes to steal client data to feed the scheme.

Restaurant sales fall in January as tax overhaul fails to boost spending

Restaurant sales fall in January as tax overhaul fails to boost spending

Getty Images The tax bill signed into law in December with much ballyhoo has failed to bolster an area of the economy that is particularly dependent on discretionary spending.
After three months of flat or positive sales growth, the restaurant sector saw same-store sales fall 0.3% in January, according to data from industry tracker TDn2K.
That’s bad news for a sector that was mired in recession until late last year, as consumers confronted higher prices for everything from rent to medical bills.
“Even if the month posted some small negative growth in sales, January’s results were better than for any other month in the February through September period last year.
Furthermore, there were some extrinsic factors that added noise to the month’s results.” These include severe winter storms, which covered swaths of the East Coast and Midwest in snow and icy conditions.
For the whole of the U.S., traffic fell 3% in the month.
Joel Naroff, president of Naroff Economic Advisors and economist at TDn2K, said tax cuts should start to boost restaurant attendance soon.
“Stronger growth in the 3% range looks likely this year and into 2019 as consumers spend the extra money in their paychecks and businesses increase their capital spending,” he said.
However, the demand boost comes at a time when the economy was already humming and labor markets were tight, raising wage- and price-inflation concerns.
“It will be better the rest of this year, and that should lead to more spending on all types of activity, including restaurants.” One bright spot in the January numbers was a positive performance for fine dining and upscale casual, the two segments that have outperformed for the last year.

Get a Replacement Social Security Tax Form Online With Ease
Social Security Disability

Get a Replacement Social Security Tax Form Online With Ease

It’s that time of year again.
Preparing for tax season can seem overwhelming.
Some forms and paperwork might be difficult to track down.
If you misplaced your Benefits Statement or haven’t received it by the end of January, we’ve made it easy to go online to get a replacement with my Social Security.
An SSA-1099, also called a Benefit Statement, is a tax form Social Security mails each year in January to the more than 60 million people who receive Social Security benefits.
It shows the total amount of benefits received from Social Security in the previous year so people know how much Social Security income to report to the IRS on their tax return.
For noncitizens who live outside of the United States and received or repaid Social Security benefits last year, we’ll send form SSA-1042S instead.
If you currently live in the United States and need a replacement form SSA-1099 or SSA-1042S, we have a way for you to get a replacement quickly and easily.
Go online and get a replacement form with a my Social Security account.
The secure and personalized features of my Social Security are valuable tools to help Americans plan for retirement.

Calif. retailer sentenced to prison for tax, workers comp fraud

Calif. retailer sentenced to prison for tax, workers comp fraud

The owner and operator of a Southern California retail chain was sentenced to two years in prison for sales tax evasion, false income tax returns, failure to pay taxes and workers compensation fraud, California Attorney General Xavier Becerra announced Wednesday.
Between 2010 and 2016, Jeong Kim, owner and operator of more than 50 Los Angeles-based Fashion Q and Q stores in Los Angeles, Orange, San Diego, San Bernardino and Ventura counties, failed to report more than $29 million in taxable sales, more than $39 million in taxable income, more than $8 million in wages, and evaded payment of $5.6 million in sales, income and payroll tax.
The owner also failed to report more than $7 million in wages to his insurance carriers and evaded payment of $353,792 in workers compensation insurance, according to a press release.
“Failing to pay payroll taxes, sales taxes and workers compensation insurance hurts employees, our local communities and businesses that are playing by the rules,” said Attorney General Becerra in a press statement.
“The California Department of Justice will continue to hold criminals accountable and protect the pockets of Californians who pay their fair share.”

Wal-Mart Boosts Wages After Tax Overhaul — WSJ

Wal-Mart Boosts Wages After Tax Overhaul — WSJ

Wal-Mart Stores Inc. said it would raise starting hourly pay to $11 for all its U.S. employees and distribute one-time bonuses, doling out some of the windfall it expects from the U.S. tax overhaul as it competes for store workers in a tight labor market.
The giant retailer, which employs around 1.5 million people in the U.S., currently pays $9 or $10 an hour to most new store workers.
The wage increase to well above the federal minimum could pressure restaurants, warehouses and smaller retailers that compete for low-skilled hourly workers.
On Thursday, the company also announced plans to cut roughly 10,000 jobs by closing about 10% of its 660 U.S. Sam’s Club warehouse stores.
For Wal-Mart, it is the third increase in its minimum wage since 2015.
Several other large U.S. employers announced plans to raise wages or pay bonuses in the wake of the tax overhaul.
When Wal-Mart increased wages and boosted training through 2015 and 2016, the moves cost the retailer $2.7 billion, an expense that pressured the company’s stock price.
This increase will cost less because Wal-Mart already has a “sizable” group of stores paying employees at least $11 an hour and already had plans to increase wages in some stores during its coming fiscal year, which starts Feb. 1, said spokesman Kory Lundberg.
Wal-Mart’s average hourly wage for full-time U.S. store employees is expected to rise to around $14.50 an hour after the latest change, up from $13.85 an hour currently, said Mr. Lundberg.
Wal-Mart also said it would offer full-time store workers the same paid family leave as corporate employees for the first time, a move that pleased some activist who had criticized the retailer’s policies.

Community Development Tax Credits: Damaged, but not Devastated

Community Development Tax Credits: Damaged, but not Devastated

President Donald Trump’s signing of the Tax Cuts and Jobs Act Dec. 22 brought the yearlong drama concerning tax reform–and its effect on community development tax credits–to a conclusion, leaving community development advocates rejoicing in the survival of the low-income housing tax credit (LIHTC), private activity bonds (PABs), new markets tax credit (NMTC), historic rehabilitation tax credit (HTC) and renewable energy investment tax credit (ITC) and production tax credit (PTC), but also wounded as they assessed the damage done to these tools.
The other credits, HTC, NMTC, ITC and PTC, shouldn’t generally see dramatic pricing changes solely as a result of the corporate tax rate reduction.
The BEAT tax rate starts at 5-6 percent in 2018, then goes to 10-11 percent in 2019-2025, and to 12.5-13.5 percent in 2026 and beyond.
Tax credit investments are generally limited in their ability to effectively reduce a corporation’s BEAT liability.
But what is even worse is the calculation of BEAT can result in corporations permanently losing up to 20 percent of the benefit of their LIHTCs, ITCs and PTCs every year through 2026 and up to 100 percent after that.
The NMTC and HTC are in a worse position, as investors could lose up to 100 percent of their value starting in 2018.
The biggest challenge to affordable housing is the fact that the lower corporate tax rate, combined with the effects of the BEAT on investor demand, will result in less affordable housing being built in the next few years.
The House bill would have repealed both iterations of the HTC—the 20 percent credit for certified historic properties and 10 percent rehabilitation credit for non-historic properties placed in service before 1936–but the Senate version of the legislation carried the day in the final bill, albeit with two significant changes.
With a tax cut bill now enacted, tax credit advocates now have two major tasks, work through the existing changes as best they can, seek guidance and suggest technical corrections as needed; and get back to work to improve and expand the credits.
The Affordable Housing Credit Improvement Act is still before Congress, as are the Historic Tax Credit Improvement Act and New Markets Tax Credit Improvement Act.

Here Are 6 Of The Most Radical Aspects Of The GOP Tax Bill
Social Security Disability

Here Are 6 Of The Most Radical Aspects Of The GOP Tax Bill

Creating a big new tax deduction for private school tuition.
Although the tax benefit is sure to save some families money, the ballooning cost of private elementary and secondary school makes it unlikely that it will increase access to private school for middle- and low-income kids.
Kevin Lamarque / Reuters Encouraging corporations to automate ― without any help for displaced workers.
But the increase in the deduction comes at a time when corporations are investing in automation of their production facilities through the use of robots and artificial intelligence technology, noted Robert Kovacev, a corporate tax attorney for the Steptoe & Johnson law firm in Washington, D.C. “It’s going to accelerate spending, basically, on robots that could displace workers,” Kovacev told HuffPost.
Many progressive economists believe the national debt is not a major challenge at this juncture.
And not discretionary spending.
“The driver of our debt is the structure of Social Security and Medicare for future beneficiaries.” Rejecting a proposal to expand a tax credit for families with children in order to reduce the corporate tax rate even more.
To pay for the roughly $87 billion price of expanding the tax credit, Rubio and Lee proposed reducing the top corporate tax rate to just under 21 percent, rather than the 20 percent threshold that President Donald Trump and GOP leaders were seeking.
While the top statutory estate tax rate is 40 percent, the average effective rate paid by families subject to the tax is about 17 percent, according to the Tax Policy Center.
The Senate bill would double the estate tax exemption to $22 million for couples, eliminating the tax entirely for half the estates that currently pay it, according to the Center on Budget and Policy Priorities.

Bernie Sanders Clarifies Comments About Middle-Class Tax Cuts In GOP Bill
Social Security Disability

Bernie Sanders Clarifies Comments About Middle-Class Tax Cuts In GOP Bill

“Next year, 91 percent of middle-income Americans will receive a tax cut.
Isn’t that a good thing?” host Jake Tapper asked Sanders.
“Yeah, it is a very good thing,” Sanders responded.
“And that’s why we should’ve made the tax cuts for the middle class permanent.” Some Republicans delighted in the idea that they had caught Sanders owning up to the bill’s perks.
“When Bernie comes back to town, he should pledge to vote with Republicans in ten years to make the tax cuts permanent for the middle class.” But Sanders maintained on Wednesday that the legislation’s modest middle-class benefits do not outweigh its problems.
Sanders also fears that congressional Republicans will cite the $1.4 trillion the law is expected to add to the national debt as an excuse to pursue cuts to Social Security, Medicare, Medicaid and other social programs.
Rather than do away with the tax law entirely, Sanders supports repealing the tax breaks for the wealthy and corporations to make the bill’s middle-class tax breaks permanent and expand upon them.
“Let’s pass tax reform that permanently benefits all middle-income and working-class families without giving tax breaks to the top 1 percent,” he said.
“Instead of providing huge tax breaks to the rich and large corporations that explode the deficit, which this bill does, millionaires, billionaires and large, profitable corporations must begin paying their fair share of taxes.” Sanders has ambitious domestic spending priorities, including a national, single-payer health care system that he and other boosters have dubbed “Medicare for all.” Sanders declared flatly at a Democratic presidential candidate forum in January 2016 that to fund these priorities, “We will raise taxes, yes we will.” He introduced new legislation in September laying out his vision for a universal public insurance plan that goes beyond even the benefits Medicare currently provides to seniors and people with disabilities.
One of the ideas is a 4 percent income-based premium on all households ― in other words, a middle-class tax increase.