Taxes
There is a bit of political theater that plays out in Washington every few years—lawmakers from high-tax states storm the stage to defend the state and local tax (SALT) deduction, as though it were etched in the Constitution. The arguments run the gamut: from its ability to protect middle-class families, to its support for essential services, and the prevention of the dreaded “double taxation.” What they won’t say, however, is that it overwhelmingly benefits wealthy households, distorts federal tax equity, and props up state tax regimes that should have to answer to their own voters. So here is the relevant…
In one of the most significant tax preparer fraud cases in US history, Rafael Alvarez, nicknamed “The Magician” by his clients, recently plead guilty to orchestrating a decade-long scheme to defraud the government of more than $145 million in tax revenue. Alvarez, the CEO of ATAX New York, a Bronx-based tax preparation firm, gained notoriety for his ability to make tax liabilities disappear. As federal investigators uncovered however, his “magic” was nothing of the sort—in fact, it was little more than systemic tax fraud. According to court documents, from 2010 to 2020, Alvarez operated ATAX as a high-volume tax preparation…
Eleven years ago, the U.K. Labour Party issued a controversial proposal: Large multinationals should publicly report their profits and taxes in the countries where they do business. It was a proposal meant to spark thinking and provoke discussion — at the time, Labour was the minority party and then-Prime Minister David Cameron, a Conservative, wasn’t interested in mandatory public country-by-country reporting. Despite Cameron’s disinterest, the conversation didn’t go away. In 2016, U.K. lawmakers settled on a compromise as they negotiated that year’s finance bill: The finance bill wouldn’t mandate public CbC reporting, but HM Treasury could implement it whenever it…
There’s a Stealth Tax retirees and near-retirees often don’t know about until they inadvertently trigger it, costing them a lot of taxes that often could have been avoided or reduced. Many taxpayers who pay this Stealth Tax aren’t subject to it every year. Instead, a change in their finances activates the tax. Many people don’t learn about the tax until their income tax returns are prepared. This least-known Stealth Tax, the net investment income tax (NIIT), was created in the Affordable Care Act and labeled as a Medicare surtax, though the proceeds go into general revenues. The NIIT is an…
Late payments have a significant impact on EU businesses, particularly small and medium-sized enterprises (SMEs), which represent 99% of companies in the region. Payment delays disrupt cash flow, leading to liquidity shortages that hinder daily operations, stifle growth, and limit investment opportunities. These disruptions often compel businesses to rely on costly loans to meet their operational needs. According to the European Commission, only 40% of businesses in the EU receive payments on time, with late payments contributing to one in four SME bankruptcies. Tackling late payments is crucial for fostering a more stable and resilient business environment across the EU.…
When a spouse passes away, the financial implications can be overwhelming, especially for those unfamiliar with estate planning or tax rules. Spousal inheritance planning is a critical topic to safeguard their wealth and ensure a smooth financial transition during a challenging time. Here’s what you need to know to navigate this complex process effectively. The Basics of Spousal Inheritance Spouses typically benefit from favorable inheritance rules, but these rules vary depending on asset types, estate planning documents, and state laws. Key considerations include: Ownership Structures: Property owned jointly with right of survivorship usually transfers to the surviving spouse without going…
This is a published version of our weekly Forbes Tax Breaks newsletter. You can sign-up to get Tax Breaks in your inbox here. Normally, when I start writing the newsletter, I am pretty confident about what it will look like. This week, however, has thrown us a few curves—the tax world is a bit topsy-turvy, so buckle up. First up, the government spending bill. Earlier this week, Congressional leaders released the text of a proposed funding measure (☆) to keep the lights on. As expected, it was a short-term bill intended to fund the government through March 14, 2025. Don’t…
America’s ongoing housing gap is sparking heated debate among liberals and progressives about solutions. The YIMBY (Yes in My Back Yard, advocates for more housing construction) movement has won some victories, most recently liberalizing zoning to allow denser and more adequate housing, part of New York City’s “City of Yes.” But some progressives still fight adequate housing construction, clinging instead to three myths about why house prices are so high. The short reason for high prices, of course, is that we aren’t building enough housing. Supply and demand. But that’s not what some liberal advocates argue. They employ three erroneous…
The IRS has announced its 2025 standard mileage rates. Beginning January 1, 2025, the standard mileage rates for the use of a car, van, pickup, or panel truck will be: 70 cents per mile driven for business use (up 3 cents from 2024). 21 cents per mile driven for medical purposes (the same as in 2024). 21 cents per mile driven for moving purposes for qualified active-duty Armed Forces members (the same as in 2024). 14 cents per mile driven in service of charitable organizations (fixed by Congress). You can find these official rates and more in Notice 2025-5. The…
A decades-long tax fraud scheme in the Bronx has come to an end. Rafael Alvarez, a 61-year-old New York tax preparer, has pleaded guilty to conspiracy to defraud the U.S. and steal government funds and aiding and assisting in preparing a false and fraudulent tax return. Alvarez’ crimes are alleged to have cost the government $145 million. Alvarez was charged on superseding information. Generally, being charged on information means that a defendant has agreed to plead guilty and waived the right to an indictment—that’s what appears to have happened here. Initially, however, Alvarez was charged with an indictment on April…
Shortly after House Speaker Mike Johnson (R-La.) and his Democratic counterparts announced a bipartisan deal to prevent a government shutdown at midnight on Saturday, the MAGA movement tore it apart and sent the federal government hurtling towards a holiday shutdown. Although many far-right Republicans grumbled from the get-go, Johnson’s problem really began when billionaire Elon Musk launched into a thread on the social media app formerly known as Twitter excoriating the details of the bill. Although there were many provisions of questionable merit attached to the continuing resolution that would keep the government operating until next March, Musk’s thread was…