Beer, wine and liquor get savings under new tax law

Tax changes bring confusion, concern & tax pro popularity

IRS impersonators have stolen more than $61 million and the tax scammers are not through

Why Tax Pros Shouldn’t Panic Over the New Tax Bill

While most Americans have been relaxing and enjoying the holiday season, the tax industry has been vigorously studying the new tax bill. Yes, there’s a still lot up in the air regarding how this coming tax season will go down but there’s one thing we know for sure: tax pros should not be worried about their professions.

Why Taxpayers Still Need Us 

The tax law was touted to be simpler. In fact, there’s a rumor being spread that filing your taxes is as simple as filling out a postcard. Don’t worry tax preparers, that is just not the case. This new legislation is going to leave taxpayers in need of more advice than ever before. There are some very complex provisions that will require additional work when it comes to planning for the tax year.

For taxpayers and tax professionals, the new code means:

• New regulations.
• New tax planning strategies that businesses and individuals should get a jump on starting January 1st.
• Technical corrections to go over (Accounting Today points out that in their haste to get this bill passed, there’s no way they got everything right).
• The IRS has its hands full and will likely not be able to respond to everyone with a question about the new law.
• Business entities will need to take a look at how they’re structured.

Major change in an already complex industry means there will be a lot of questions and confusion. It will require professionals who know how to read the law and understand it.

CPAs Beware

The change in law has not been the best news for the Accounting industry thanks to the bill’s treatment of pass-through entities that are service based. According to AICPA president and CEO Barry Melancon, “While the tax reform legislation contains several provisions that should be welcomed by CPAs and their clients, the AICPA is very disappointed by lawmakers’ decision to exclude CPAs from the measure’s treatment of pass-through entities.” Unfortunately, the professional services sector will not qualify for the new deductions that were given to other businesses.

There are a lot of moving parts on the new legislation and its effects and unintended consequences are yet to be seen.  All of this means that taxpayers and businesses will need your expertise and advice now more than ever.

We will keep you up-to-date as we get a handle on the new legislation. Stay tuned to our blog for updates and look for new education opportunities as well.

source https://www.theincometaxschool.com/blog/tax-professionals-new-tax-bill/

Your current W-4 will work with new tax law (for now)

An overview of the new Republican tax cuts law

7 tax moves to make now in light of 2018's new tax laws

O Christmas tree, how lovely are your taxable branches

Cost of 12 days of Christmas cheer comes to $34,558.65

Bonuses comes with tax baggage

We have tax reform!

It's official! Trump signs GOP tax rewrite into law

Tax code rewrite done, so Congress turns to expired tax laws

The Importance of Office Holiday Parties

There was a discussion on LinkedIn recently about attending or not attending the yearly holiday office party. These days it seems to be a badge of honor to skip it. Or, you go, but you dread it. Here’s the thing though. Holiday parties are important – especially if you’re an employer.

Whether you work for a large company or a small one, getting together to celebrate the season helps boost morale and teamwork. We have a holiday party every year that happens during work hours. The team gets a break during the day and we hang out, eat food, and pass out gifts. In addition to the “Secret Santa” gift exchange we did this year, my wife Marilyn and I bought two individual gifts for each employee.

Marilyn spent many hours shopping over the past 6 months and employees made food or dessert to contribute to the food provided by the company. I personally love getting together with my team – who are like family to me. But if you’re not convinced, here are some benefits to hosting/attending the holiday office party:

•  It’s an ideal opportunity to get to know people from other parts of your organization, or build stronger relationships with coworkers.
• It’s the last chance for a relaxing time before tax season (because 2018 just might be nuts!)
• It’s a team event so you’re kind of expected to attend. You know, as a team player.
• It can be an opportunity to network and be noticed by senior executives.
• It’s a thank you to employees for their hard work during the year.
• Non-attendance, without a valid excuse, may hold you in a bad light or be misinterpreted.

It’s only a couple of hours and you may actually end up having fun! I know our employees look forward to the holiday party each year. In fact, several employees commented how much they appreciated the gifts and being part of our team.

Happy Holidays everyone!

 

source https://www.theincometaxschool.com/blog/staff-holiday-parties/

Tax reform and alimony

KPIX 5 December 20,2017 story by Mark Sayre

H.R. 1, Tax Cuts and Jobs Act, or per its new catchy title at 12/20/17 - ‘‘An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year
2018," changes the tax treatment of alimony effective for divorce and separation agreements entered into after 2018. So, going forward for new instruments entered into after 2018, the payor of alimony gets no deduction and the conference report states that the recipient does not pick up income. Also, H.R. 1 removes "alimony and separate maintenance payments" from IRC 61(a) where it is currently listed as an example of gross income.

This has been proposed before, such as in H.R. 1 (113rd Congress), the Tax Reform Act of 2014 by former House Ways and Means Chairman Dave Camp.

This won't affect many taxpayers. Per IRS stats, less than 1% of individual returns report alimony received.

I was interviewed 12/20/17 for a news clip for KPIX-TV (CBS) by Mark Sayre, about this. You might enjoy it, don't miss my first statement.

What do you think about this change?

source http://21stcenturytaxation.blogspot.com/2017/12/tax-reform-and-alimony.html

You may, or may not, see the new tax law's changes in your February paycheck

Calculators provide an idea of tax bills under GOP plan

Tax reform and timing of income

There are a lot of changes in H.R. 1, the Tax Cuts and Jobs Act, that is up for a vote this week by the House and Senate. I often find it useful in understanding the changes to see them as "track changes" in the relevant Internal Revenue Code section.  I hope to get a few of these put together and will post them as I have them.  Here is one on IRC Section 451 on timing of income, mostly for accrual method taxpayers.  One of the changes is to codify Rev. Proc. 2004-34 on deferral of certain advance payments received by accrual method taxpayers (new Section 451(b)). The other is to ensure that in most fact patterns, an accrual method taxpayer can't get longer deferral of income that is allowed on its books. I think this is mostly already the case today, but this provision should catch most of what is not covered by other provisions today.

See Section 451 as modified by Sec. 13221 of H.R. 1 (also see information at the end of the document on links to the conference explanation and effective date information). The changes are to new subsections (b) and (c) and re-lettering of the subsequent subsections.

What do  you think?

source http://21stcenturytaxation.blogspot.com/2017/12/tax-reform-and-timing-of-income.html

How taxes on pass-through businesses would work under the GOP tax plan

How Some Practices Achieve ROIs of 2,387% and Others Fail

 

The following article is a guest blog post by Joy Gendusa of Postcardmania.com

There’s ONE main factor which differentiates successful direct mail tax preparation campaigns from those that flounder and end up being a waste of money.

But before I tell you what that is, I want to show you 3 tax practice marketing campaigns from real clients of mine.

We keep track of successful campaigns when business owners share their results with us, so that we can use that data to help other business owners succeed at marketing.

We base all of our clients’ postcard designs (and campaign targeting) on our database of 2,000 tax clients’ marketing results collected from over 20 years in business. That way, we aren’t GUESSING what works — we’re only doing what we KNOW has worked based upon solid numbers.

These campaigns are all very different from each other, yet each one experienced incredible results with a return on investment of 1,422% and even 2,387%!

After you see these postcard designs and campaign numbers, I’ll give you my final take on them at the end.

CAMPAIGN #1

 

 

 

 

 

 

 

 

 

 

 

Mailing list: Local single-family residences with average annual incomes of $40,000 or more

Mailing schedule: 3,000 mailed twice with 1 week separating the mailings

Campaign results: 15 new clients, generating $2,000 in revenue

ROI: Lifetime revenue estimated at 597%

I love how the headline jumps out at you from the upper left hand corner. Who doesn’t want to get the MOST money back from their taxes?! Plus, blue communicates fiscal responsibility — another smart reason to call this practice!

CAMPAIGN #2

 

 

 

 

 

 

 

 

 

 

 

Mailing list: Residences with average annual incomes of $100,000 or more

Mailing schedule: 10,000 mailed one time

Campaign results: 265 responses, generating $60,000 in revenue

ROI: 1,422%

I love this design because it’s SO eye-catching. Plus, the bold headline really communicates to most people who want to be smart with their money (Don’t gamble with your taxes!) Not to mention a sweet 30%-off special offer… I’d call for that!

But, I saved the best for last…

CAMPAIGN #3

 

 

 

 

 

 

 

 

 

 

 

 

Mailing list: A house list of previous clients and current prospects

Mailing schedule: 2,500 mailed to just one time

Campaign results: 358 responses, 180 new clients, generating $62,000 in revenue

ROI: 2,387%

Here is a design that a client of ours provided and insisted on sending. While this is not a design that my creative department would ever compose for you, who can argue with $62,000 generated??

And although this postcard design may not win any design awards, it got the best results of all 3 because:

• They targeted people who knew and trusted them already
• They used a larger postcard (6”x 8.5” vs. 4”x6”)
• And they wrote their copy in Spanish for their clientele.

Did you notice anything about all 3 of these campaigns? It’s a bit of a trick question because each one is vastly different from the others, but here’s what I really want you to know:

KEY TAKEAWAY: There’s NO one-size-fits-all approach with your marketing. All of these campaigns were different, because they were tailored to that practice.

But here’s that ONE BIG TRUTH I promised at the beginning of the article that all of these campaigns have in common…

They did this:

Segment your market and target, target, target!

The truth is:

Your services can help everyone. We all have to file taxes. But a blanket approach may not be the best use of your marketing dollar.

PostcardMania has helped over 2,000 professional tax preparers and CPAs with their marketing, and what we’ve found from those who have had success is that targeting is the #1 differentiating factor between campaigns.

Here’s what else our proprietary data tells us:

There are 3 existing markets that work best for tax preparation targeting…

1. High Income Consumers
2. Low Income Consumers
3. Your Client Data Base

And here’s what works best for each of those markets.

1. High Income Consumers: This is the most difficult group to get a response from, but successful campaigns focus on a moderate discount and the quality of the tax preparation. Here are a couple good examples of what I mean:

• Messaging such as “get the guaranteed highest legal amount of deductions possible!”
• 15%-25% OFF Professional Tax Preparation

2. Low Income Consumers: These consumers are the most price sensitive and respond better to higher discounts and offers, as well as refund-heavy messaging. Here’s a few ideas:

• Headlines like this one: “New tax laws have been passed —don’t miss out on new savings/deductions!”
• 25%-50% or $30 OFF Tax Preparation
• Scratch-offs also work well

3. Client Data Base: Any of the above will work, depending on who your database consists of. Sending a reminder postcard to file taxes with you and a single offer will work well to reactive these consumers.

What’s important is that each campaign is appropriately targeted and timed.

If you’re targeting your own list but mailing through a USPS-certified bulk mail house like PostcardMania (because you can save on postage that way), make sure any mailing list vendor you work with scrubs your list of bad addresses and relocated consumers. You don’t want to waste marketing money on mailing to bad addresses.

If targeting new prospects and potential clients, it’s important to verify that your list provider ensures 90% deliverability on your postcards. If they aren’t willing to guarantee 90% of their addresses, it likely means that they don’t trust their list vendors — so why should you? At PostcardMania, we guarantee 90% deliverability AND refund you whatever amount over 10% is not deliverable.

I also advise that you work with a direct mail specialist directly. There are so many moving parts in a postcard campaign that it’s easy to get one wrong and blow your entire budget!

That is always one of my worst fears… a business owner finally tries postcards, gets it wrong and declares, “Postcards: been there, done that — they don’t work!”

That’s why PostcardMania works off of direct business owner consultations. We work with each of our clients personally to make sure every campaign is tailored to their business, their location and their ideal market.

If you really want to market above your competition, consider running coordinated ads online and on Facebook. This gives your prospects the perception that your tax practice is on-the-ball and EVERYWHERE — which is exactly what you want!

Because when your marketing reaches key prospects everywhere —

• in their homes with direct mail,
• on MILLIONS of websites worldwide with Google follow-up ads
• AND on their Facebook news feeds,

— your prospects won’t forget you anytime soon, and they’ll be MUCH more likely to choose you when they’re ready to file their taxes.

We can help you achieve this massive multi-platform marketing with our Everywhere Small Business program so you don’t have to lift a finger, but instead, you can focus on filing taxes and helping all your new clients.

Here’s what an Everywhere Small Business Campaign could look like for the second campaign above:

Regardless of whether or not you use PostcardMania, I want you to use this information to market your tax preparation services effectively!

That’s why I’ve shared all of PostcardMania’s own proprietary data with you — so you can use it to bring in new business and expand YOUR business. That is my ultimate goal, because small businesses growing and expanding helps all of us.

If you reach out to us, you’ll receive a personalized consultation tailoring your marketing campaign to your practice, your area, your goals, and your ideal clientele. And it’s FREE. There is no obligation to buy from us to receive this personalized consultation. I have 35 trained direct mail specialists that can assist you. Call them anytime at 855-549-1313.

You can also take a look at our gallery of tax preparation postcard designs for inspiration.

Here’s to a profitable and booming 2018!

source https://www.theincometaxschool.com/blog/direct-mail-roi/

More (oh joy!) GOP tax bill proposed changes

Highlights of the GOP tax bill that's about to become law

2018 State Taxes Not Deductible in 2017

Tax reform will likely result in individuals not able to claim an itemized deduction for all of their state taxes.  It looks like the final bill will only allow up to $10,000 of a combination of real property taxes and state income taxes. Some practitioners and taxpayers have wondered if individuals can prepay their 2018 state income taxes by 12/31/17 and claim a deduction in 2017 before the new law kicks in on 1/1/18 (assuming enacted).

The answer, I believe, is no.  At 12/31/17, you have no 2018 state tax liability because 2018 hasn't started yet. In contrast, if your property taxes were assessed in 2017 but you can pay them over installments in 2017 and 2018, you can pay the 2018 installment in 2017 and claim the deduction because it is truly a 2017 liability. Also, your fourth quarter estimated payment for your 2017 state income taxes is usually due 1/15/18, but can be paid in 2017. That is still fine and people will want to consider doing so, but must consider the 2017 AMT effect which might result in no tax benefit.  That 4th quarter estimate needs to be reasonable. That is, you can't make a very large 4th quarter payment for 2017 knowing you'll get a refund of it in 2018 (see Revenue Ruling 82-208).

We have AMT in 2017 and for many individuals, they won't get a state tax deduction because they will owe alternative minimum tax where you don't get to deduct your state taxes.

For a great explanation of the tax technical reasons why individuals can't deduct 2018 state tax estimates in 2017, please see the following article by Kip Dellinger and Chris Hesse, CPAs:

"A 2017 federal tax deduction for prepaying anticipated 2018 state income taxes? Not likely!" Journal of Accountancy, AICPA, 12/14/17.

source http://21stcenturytaxation.blogspot.com/2017/12/2018-state-taxes-not-deductible-in-2017.html

Mileage tax deduction rates for 2018 bumped up a bit

Are You a Connector?

Have you heard of the philosophy “Givers Gain”? It’s a BNI principle based on the law of reciprocity. Networking should be an important part of your business. It’s a tried and true way to build your network, spread the word about your company, and essentially gain new clients.

You’ve likely encountered a number of different approaches to networking. Some people work the room in an attempt to get business cards in everyone’s hands, some people focus on meeting and talking to certain people, and some people just go with the flow. While there are different approaches to networking, there’s one approach we’ve found to be extremely effective – being a connector.

A connector is someone who always has a recommendation and is always willing to offer up an introduction to someone who might help your business grow. They have a huge network of people and are always willing to help.

Not only is helping people awesome. Helping other people helps you, because generally, those people will reciprocate your generosity. 

5 Benefits of Being a Connector

1. You have a big network

Connectors are always developing relationships. They have a huge network of people which means LOTS of people know who they are and what they do.

2. You are THE person

When someone needs a referral, they come to you. That makes you a trusted advisor and someone who is always at the forefront of people’s minds.

3. “Givers Gain”

When you adopt a giving philosophy and focus on giving business to your fellow networkers, people naturally become eager to repay your kindness by sending business your way in return.

4. It makes networking easier

If striking up conversation makes you feel uneasy, take the connector approach. It’s easier to introduce two people who may not know each other but would be good connections for each other.

5. It’s good for you

Studies show that giving is good for the giver. It boosts your mental and physical health, it makes you more mindful and appreciative, and it’s fulfilling.

Try being a connect and you’ll reap the benefits!

source https://www.theincometaxschool.com/blog/be-a-connector/

Tax bill's $10,000 deduction cap to include state and local income and sales taxes, too

Tax reform will lead to tax law abuse. Duh!

States warily watching federal tax reform

IRS re-opens Experian-secured online services

Feds bust $2.5 million football survivor betting pool

3 tax tips for office holiday party hosts

Casualty loss tax deduction elimination fires up some California lawmakers

Tax reform conferees named. Let the tax mixing begin!

Sexual harassment settlement tax deduction eliminated in tax reform bills

Loss of exemptions could cost some taxpayers

Tax reform's $10K property tax deduction is worthless

The tax writing's on the bill, some of it possibly from more than 6,200 lobbyists

8 differences to be reconciled in House & Senate tax bills

After 14½ hours of debate, the U.S. Senate early on Saturday, Dec. 2, approved 51-49 its version of tax reform. Now the hard work starts. (C-SPAN2 screenshot; click image to watch video of the full debate and votes)

It's alive! Tax reform, or at least tax cuts (for a while, for some people) survived a marathon session in the Senate, with that chamber approving its Internal Revenue Code revisions early Saturday, Dec. 2, morning.

Now the real fun begins.

Since the House version (H.R. 1, the Tax Cuts and Jobs Act) passed on Nov. 16 is different from the Senate's bill, the two legislative bodies must send members to a conference committee to mash up the two measures.

It won't be easy. While both the House and Senate bills cut corporate taxes and taxes on individuals, the bills diverge in some major areas.

Here are some of the biggest differences that have to be ironed out.

1. Tax rates and income brackets
Currently, we have seven progressive individual income tax rates and associated income brackets. They are 10 percent, 15 percent, 25 percent, 28 percent, 33 percent, 35 percent and 39.6 percent.

The House wants to reduce those to just four individual rates — 12 percent, 25 percent, 35 percent and 39.6 percent — and income tax brackets, with the top tax kicking in on single filers who make more than $500,000 and more than $1 million for jointly filing married couples. That's much higher than the $418,401 for single filers and $470,701 for married joint filers at which the current 39.6 percent rate is imposed.

The Senate proposes keeping seven individual tax rates, but the highest tax it imposes on individuals is 38.5 percent, which applies to individuals earning more than $500,000 and married couples with combined income of $1 million.

The other six tax rates the Senate says would apply to us much less-wealthy filers are 10 percent, 12 percent, 22 percent, 24 percent, 32 percent and 35 percent.

On the corporate side, the House cuts the business tax rate from a nominal 35 percent to 20 percent starting in 2018. H.R. 1 also makes its individual and corporate tax rates permanent.

Under the Senate bill, the corporate tax rate also is cut to 20 percent and is permanent. It won't, however, drop until the 2019 tax year.

Meanwhile, individual tax cuts per the Senate would become law in 2018, but they would expire in 2025. The limited life span is so that the Senate can comply with its rule that tax changes don't create deficits beyond what is allowed under the approved budget amount.

2. Pass-through entities
Under this tax structure, income from certain businesses — such as sole proprietorships, partnerships, limited liability companies (LLC) and S-corporations — is passed through to the business owners, who then report it on their personal tax returns to be taxed at their individual ordinary tax rates.

Both the House and Senate bills lower taxes on the business portion of a filer's pass-through income. But they do so differently.

The House bill cuts the top income tax rate for pass-through money to 25 percent from 39.6 percent. It also prohibits individuals who provide professional services, such as lawyers and accountants, from taking advantage of the lower rate. And it phases in a lower rate of 9 percent for businesses that earn less than $75,000.

Rather than setting a specific tax rate for pass-through income, the Senate bill lets such business owners deduct 23 percent of their income. Similar to the House bill, some service businesses would be prevented from taking the tax break; those making $250,000 if a single filer or twice that for married filing jointly couples could not claim the deduction.

3. Estate tax
The House bill would eliminate the so-called death tax beginning in 2024. Before the estate tax ends, the amount that could be left tax-free to heirs would double. Under current law for tax year 2017, that's $5.49 million per person or $10.98 per married couple.

And heirs who sold shares of stocks they were left would not have to pay any capital gains tax on the proceeds.

Rather than repeal the estate tax, the Senate increases the amount that can passed tax-free to loved ones and friends from the current nearly $5.5 million to $11 million.

4. Alternative Minimum Tax
The House bill repeals the Alternative Minimum Tax, or AMT. This parallel tax system was created to guarantee that the richest tax filers pay at least some tax. Despite changes to ease its effect on more middle-income taxpayers, many still are hit by this bipartisanly hated tax.

The Senate also wanted to kill the AMT, but budget considerations forced the Upper Chamber to retain the tax. The Senate bill does, however, increase the amount of income exempt from the AMT.

5. Mortgage interest and other home-related deductions
The House bill keeps, but reduces for new buyers, the amount of mortgage interest that can be claimed as an itemized deduction. H.R. 1 would let borrowers deduct interest on up to $500,000, half the loan amount allowed under current law.

The Senate basically leaves the maximum mortgage interest deduction alone. Keeps the mortgage interest deduction for a filer's main home as is, letting homeowners claim a deduction for the interest paid on home loans up the $1 million for their primary residences.

As for property taxes, another now fully deductible home-related expense, both the House and Senate tax bills would limit the amount of real estate taxes that could claimed by itemizers to $10,000.

The bills also change how homeowners can profit tax-free from the sale of their residences.

Current law allows sellers to generally exclude $250,000, or $500,000 for those filing jointly, from capital gains when selling their primary residence as long as they've lived in it for two out of the past five years. Both the House and Senate want to increase the live-in time period to five out of the last eight years.

The Senate bill also ends the deduction for home equity loans.

6. Child tax credit
Parents and guardians currently can claim a tax credit of $1,000 for each dependent child younger than 17.

The House bill would increase the credit to $1,600 per child.

The Senate's child tax credit would increase to $2,000 per child. It also would be available for any children younger than 18, but would revert to the 17-year-old limit in 2025.

Both versions would be subject to income phaseouts.

Opponents of both bills say that since the child tax credit is only available to parents who pay income taxes, more than 10 million children in low-income families would be excluded from the increased tax break.

7. Other deductions and credits
The House and Senate bills agree on eliminating the itemized deductions for state and local income and state and local sales taxes.

While these components of the of the various deductible state and local taxes, known in the tax world by the acronym SALT, were approved by their respective chambers, expect opponents of the change — including some Republican House members — to fight the SALT elimination provisions again in any conference version.

The House bill originally got rid of the adoption tax credit, but added it back in after objections from some GOP lawmakers. The Senate bill would leave the adoption credit in the tax code.

Both bills also eliminate the above-the-line deductions for student loan interest and moving expenses, as well as the itemized one allowed under miscellaneous expenses for tax preparation fees.

And then there's the medical tax deduction.

Current tax law allows Americans to deduct as itemized expenses qualified medical costs that come to more than 10 percent of a taxpayer's adjusted gross income (AGI). This can include a variety of medical expenses above and beyond just the standard doctor, dental and vision expenses. It is a tax breaks especially used by people with chronic illnesses.

The House bill repeals the medical deduction option. The Senate bill, however, keeps it and goes back to the prior 7.5 percent of AGI threshold that was increased as part of the Affordable Care Act.

8. Affordable Care Act individual mandate
And about the ACA, or Obamacare as it's still popularly known, has come back into play in the tax reform debate.

Originally, the House and Senate wanted to repeal it and its many taxes to free up money to make tax cuts easier from a budgetary standpoint. That didn't happen.

But a part of the health care law has been worked into the Senate tax reform bill. Or rather, worked out of the tax code.

The Senate's bill would repeal the ACA's individual mandate. This is the health care law's requirement that individuals buy at least a minimally acceptable medical insurance policy or pay a tax penalty for going without coverage.

The House keeps the Obamacare insurance coverage requirement on the books.

However, House Speaker Paul Ryan (R-Wisconsin) last month said that if the Senate took the lead on scrapping the health care coverage requirement, he's open to adding similar language to any final tax reform measure.

If Ryan sticks with that stance, the ACA issue could be one of the easier provisions that conference committee members will tackle. However, they could get push pack similar to that they faced during their chambers' specific Obamacare repeal efforts, especially since the CBO says that striking the ACA mandate will mean 13 million more Americans would be uninsured by 2027.

Much tax reform work left to do: The bottom line is that there is still a lot of work to be done before we get any tax bill. And it won't be easy.

The Senate bill is 479 pages long, with many changes made — some of them by nearly illegible scribbling in the bill's margins — at the last minute as the final vote neared.

That process infuriated a lot of Senators, and by a lot I mean all 46 Democrats and two Independents. 

Their frustration was summed up by Democratic Sen. Jon Tester of Montana who took to Twitter last night to exasperatedly complain, "I was just handed a 479-page tax bill a few hours before the vote. One page literally has hand scribbled policy changes on it that can’t be read. This is Washington, D.C. at its worst. Montanans deserve so much better."

I was just handed a 479-page tax bill a few hours before the vote. One page literally has hand scribbled policy changes on it that can’t be read. This is Washington, D.C. at its worst.  Montanans deserve so much better. pic.twitter.com/q6lTpXoXS0

— Senator Jon Tester (@SenatorTester) December 2, 2017

Yep, the Treasure State's senior senator lived up to his surname in his testy nailing of the problem with the way Congress, and the Senate in particular last night/early this morning, has operated when it comes to controversial legislation.

Math, not massive size of bill, at issue: Maybe members of Congress will get/take time to read the massive Senate tax bill and carefully compare it to the House version before any final decisions are made in the upcoming conference committee deliberations.

But the biggest obstacle is not legislative language. It's budget math.

The CBO estimates that the House bill will increase the deficit past the initial 10-year window. That's a no-go as far as Senate rules are concerned.

The Senate cannot approve tax measures that that increase the deficit over the coming decade. Per the recently passed budget resolutions, that's $1.5 trillion over that period. Late Friday as Senators were debating their tax bill, the CBO released its analysis finding that the Senate proposal would increase the deficit by $1.4 trillion over the next decade.

Whew! Just sneaked in under the budget line.

The Senate got to the acceptable deficit amount by using the sunset gimmick that ends almost all individual tax breaks at the end of 2025 so that the corporate tax break can become permanent parts of the Internal Revenue Code.

Any changes that are made in the tax reform bill conference committee will have to take the Senate deficit requirements into account to assure that a final bill can make it through that chamber. Again.

Tax reform is ____: Hunker down, folks. This ride is far from over.

To borrow Donald J. Trump's observation during the failed Obamacare repeal and replace effort, who knew tax reform could be so hard?

Or, per my witty Twitter tax pal Joe Kristan in deciphering the #TRIH hashtag, it also is many other things:

Let me add one more: Hypocritical.

Advertisement

 

source http://www.dontmesswithtaxes.com/2017/12/tax-reform-key-differences-in-house-and-senate-bills.html

10 tax moves to make by Dec. 31 (and before Congress changes the tax laws)