Improper Payments in the EITC Extrapolating from the IRS’s National Research Program compliance study of individual income tax returns for tax year 2009, the Treasury...
Traditional IRAs versus Roth IRAs Workers and their spouses do not need their employers’ help to save in tax-favored retirement accounts. Individual retirement accounts mostly...
Overview A Roth IRA is a form of an individual retirement account in which contributions are made with after-tax earnings. Eligibility is limited by income...
Tax-favored retirement savings accounts are popular: half of working adults take advantage of them. It’s unclear, however, whether they make much difference to overall savings...
Broadly speaking, there are two types of tax-favored retirement accounts: “front-loaded” accounts, such as traditional IRAs and 401(k)s, and “back-loaded” accounts, such as Roth IRAs...
In January 1969, Treasury Secretary Joseph W. Barr informed Congress that 155 taxpayers with incomes exceeding $200,000 had paid no federal income tax in 1966...
Taxpayers pay the higher of either their tax calculated under regular income tax rules or their tax calculated under the alternative minimum tax (AMT) rules...
Throughout the history of the income tax, capital gains have been taxed at lower rates than ordinary income. Since 2003, qualified dividends have also been...
Carried interest is a contractual right that entitles the general partner of a private investment fund (often a private equity fund) to share in the...
HRAs are established by the employer, and only the employer can contribute to the account. Although they have no contribution amount limit, the employer does...
Many preferences in the tax code phase out for higher-income taxpayers, meaning their value declines after income reaches a certain level. Phaseouts target tax benefits...
Electricity Production Several tax provisions encourage electricity production from nonfossil sources. The two largest are the renewable electricity production tax credit (PTC) and the energy...
Employer-sponsored Plans There are two primary types of employer-sponsored plans. Defined-benefit plans generally distribute funds regularly during retirement according to formulas that reflect employees’ years...
Tax expenditures are revenue losses attributable to special exclusions, exemptions, deductions, credits, and other provisions in the tax code. The Congressional Joint Committee on Taxation...
Defined benefit plans promise to pay a pre-determined benefit at retirement, usually determined by an employee’s salary and years of service with the firm. Employers...
Tax-deferred defined contribution plans include the familiar 401(k) plans, similar 403(b) plans for nonprofit employees, 457 plans (mostly for state and local government employees), and...
