Shutdown Saga: No end in sight but a slight glimmer of hope. On Saturday, President Trump offered temporary protections for some immigrants and an end to the partial government shutdown in exchange for $5.7 billion in border wall funding. Democrats rejected the plan and continue to insist that the government be reopened first, with a debate border security to follow. Senate Majority Leader Mitch McConnell plans to bring Trump’s plan to the Senate floor this week but it won’t win the 60 votes it needs for passage. There is no chance the House would approve the measure in any event. But for the first time in weeks, each side is floating ideas.
How will the partial government shutdown affect tax filing season? It will depend on your situation. TPC’s Howard Gleckman and Robert Weinberger answer whether the IRS will be able to process tax returns as usual this filing season. For many taxpayers, the season will feel “pretty normal.” But, “if you do try to get help directly from the agency, count on refundable tax credits to pay the bills, or if your return contains an error, filing season may get very frustrating, very fast.”
The IRS clarified pass-through deduction rules. Less than two weeks before the start of tax filing season, Treasury and the IRS issued final guidance for taxpayers who want to claim the new 199A deduction for pass-through business income. The guidelines provide more examples of what meets the definition of a qualified service, trade, or business eligible for the deduction.
Another presidential candidate joins a growing field of Democrats. California’s Sen. Kamala Harris announced her candidacy yesterday. The state’s former attorney general’s platform will include a massive tax credit of up to $3,000 for individuals and $6,000 for married couples making up to $100,000. TPC estimates the credit would cut taxes by an average of $3,200 but add nearly $3 trillion to the deficit over the next decade. She also is proposing a separate tax credit for renters.
Ronaldo will plead guilty to tax fraud. Soccer superstar Cristiano Ronaldo will plead guilty today in a Spanish court to tax fraud. According to published reports he will receive a two-year suspended sentence and pay a fine of $21.6 million. The charges are based on his efforts to dodge Spanish taxes while he was playing for Real Madrid. He is one of many soccer stars charged with tax fraud in Spain.
New Jersey’s rental tax is making some homeowners nervous. The state’s new tax on short-term lodging available through online home sharing platforms may hurt its tourism industry. The 11.625 percent tax went into effect last year and some out-of-state property owners who rent their homes for the summer have expressed concern. But lawmakers seem unmoved, at least for now.
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