Income Taxes | The Homa Files

Archive for the ‘Income Taxes’ Category

Here’s the key takeaway from the NY Times tax “bombshell”…

September 29, 2020

Trump’s low taxes were courtesy of an “unwitting gift” from Obama-Biden !
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It didn’t surprise me that Trump paid virtually no income taxes for the past decade.

But, I was surprised to read an under-hyped part of the story:

Starting in 2010 (Trump) claimed, and received, an income tax refund totaling $72.9 million — all the federal income tax he had paid for 2005 through 2008, plus interest.

(The $72.9 million refund) was “an unwitting gift from an unlikely source — Barack Obama.” Source

Say, what?

Here’s the relevant part of the story…

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Posted in 2020 Presidential Campaign, Income Taxes, Taxes, Trump, President Donald J. | Leave a Comment »

The perils of long-term financial planning…

October 4, 2019

Frugal savers bulls-eyed as Congress move to end “stretch” IRAs.

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According to a WSJ recap…

Conventional financial planning wisdom has been to put as much money as possible into IRAs and 401Ks … starting early, maxing plan contributions, benefiting from company matches, growing accounts tax-free … and, if you don’t end up spending all of the dough in retirement, pass anything left in the pot to heirs.

While that basic logic still holds, Congress is moving to throw a monkey wrench into the works by substantially increasing the tax burden on heirs.

Here’s what’s going on…

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Posted in Estate Taxes, Income Taxes, IRA - 401K, Tax burden, Tax Loopholes | Leave a Comment »

It’s official: my tax refund is bigger this year…

February 27, 2019

But, to my dismay, my taxes increased
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These days, all the publicity is about people who are getting smaller tax refunds this year … clear evidence, they say, that Trump lied about cutting middle class taxes.

Not really.

People seem to easily confuse “refunds” with “taxes paid”.

Of course, the relevant measure is “taxes paid” … and, most middle-classers are paying less in taxes.

But, behavioral economics and psychology kick in … and, people wrongly focus on their refunds.

If I did that, I’d be feeling great today

Last year, I had to write a check to the government. Ouch. This year, I’m getting a statistically insignificant refund.

Good news, right?

Nope … because my taxes went up.

My income stayed about the same … so the increase was due to the tax law changes.

When I drilled down on the causes & effects, I got a few surprises….

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Posted in Income Taxes, State & local taxes, Taxes | Leave a Comment »

Trump’s next headache: ‘Unrecognized’ tax-cut benefits.

February 12, 2019

We warned about this a year ago in the post

Will 143 million households notice that their taxes have been cut?

Regrettably, our prediction seems to be coming to fruition.

There have been a flurry articles citing tax preparers who are warning that, tax refunds will be smaller this year … lower in average, with fewer people getting refunds.

Most recent IRS data support that claim: average refunds are down 8.4% from this time last year.

That’s a big deal … and, will be a big headache for President Trump.

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Posted in Income Taxes, State & local taxes, Taxes, Trump, President Donald J. | 2 Comments »

Should my trash pick-up be tax deductible?

November 6, 2017

… and what about HOA fees?

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For openers, let me declare: I think that I end up worse off under the proposed GOP tax plan.

That said, I’m all for eliminating the deduction for state & local taxes.

See It’s time to do away with SALT.

Here’s why I’m not swayed by the whiners in the high tax & spend states ..

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Posted in Income Taxes, Taxes | Leave a Comment »

It’s time to do away with SALT.

October 26, 2017

That is, the State and Local Tax deduction.

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Among the provisions of the GOP’s tax-cutting plan that has drawn intense opposition (mostly from Democrats) is the elimination of state and local tax (SALT) deductions for folks who itemize their deductions (versus taking the standard deduction).

All else equal, eliminating the SALT deduction would income taxes paid to the federal government by about $180 billion each year … providing some wiggle room for cutting income taxes in other ways.