“Can’t say I’m happy, but…” President Trump said yesterday he is not “thrilled” with the budget deal aimed at keeping federal agencies, including Treasury and the IRS, open through the fiscal year. The agreement provides little money for his border wall. But he’s also hinted he’d sign the agreement to avoid another partial government shutdown when funding expires on Friday. Senate Majority Leader Mitch McConnell says he hopes ”the Senate can act on this legislation in short order.” The real questions: Would Trump veto the bill and would Congress override?
Also not happy: Extenderistas. Whatever the fate of the budget deal, it apparently will not include any of the two dozen tax extenders, many of which expired in December, 2017. Some lawmakers of both parties hoped the tax extenders could ride on the budget bill, but Politico reports the idea got no traction from negotiators.
Did the TCJA help you? Check your total tax liability not your tax refund. When it comes to the impact of the Tax Cuts and Jobs Act, TPC’s Howard Gleckman wants filers to stop obsessing about the size of their tax refunds and pay attention to their total income tax bills. A refund only means you had more tax withheld over 2018 than you owed, not that you owed less overall. He also warns against trying to predict what will happen to refunds this tax season based on one week of IRS data.
National Taxpayer Advocate releases Annual Report to Congress. In the 2018 report, National Taxpayer Advocate Nina Olson warns that “IRS performance already is significantly limited by its aging systems, and if those systems aren’t replaced, the gap between what the IRS should be able to do and what the IRS is actually able to do will continue to increase in ways that don’t garner headlines but increasingly harm taxpayers and impair revenue collection.” The 35-day government shutdown made matters significantly worse, the report notes.
Virginia lawmakers agree to tax relief, focusing on racial equity. The legislature passed emergency legislation to return some of the state’s TCJA tax windfall to 2.5 million people. The bill will rebate up to $110 for individuals and $220 for married filers, and increase the state standard deduction. The Virginia Legislative Black Caucus and Democratic allies balked at an earlier $1 billion tax relief package that they said did too little for low-income working families and racial minority-related budget priorities.
Will Connecticut repeal its inheritance tax? State Republicans have long opposed the state’s tax on estates valued at $3.6 million or more, and now some state Democrats might be open to repealing it too. By 2023 the state’s current estate tax exemption will rise to match the federal limit of $11.4 million. The Connecticut estate tax will generate just under $200 million this year, or 1 percent of the state’s general fund.
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