Now that Republicans control the federal government, President-elect Trump’s ambitious campaign proposals will move up on the fiscal policy agenda. Figure 1 summarizes Trump’s campaign promises and their corresponding revenue estimates (collected by the Committee for a Responsible Federal Budget). Figure 2 provides a historical perspective on how these proposals could affect the federal debt. Read the full article here

Federal payroll obligations imposed on employers can be expensive and time-consuming. Therefore, it is not uncommon for companies to outsource these responsibilities to third parties referred to as “third-party payers” (TPPs). Under a TPP arrangement, the TPP deducts, withholds, and remits employment taxes and prepares and files the corresponding employment tax returns on behalf of the employer. Generally, these third-party arrangements work well for both sides. In exchange for offloading the payroll headaches to a third party for a fee, the employer has more time to focus its efforts and personnel on other better-suited activities outside of the payroll function.…

With the re-election of Donald J. Trump as President, some Americans have expressed interest in moving abroad. Google Search data shows a spike in key phrases like “move to Canada,” “how to immigrate,” and “expat” since Election Day. In a repeat of 2016, this includes some celebrities such as America Ferrera, who says she will decamp to the UK with her family after being sick Trump won. She joins other celebrities who have recently moved to the UK. Newsweek has published a full list of celebrities moving abroad after Trump’s win. Back in 2016, one poll said that more than…

Detroit has announced it will become the largest municipality in the US to allow residents to pay taxes using cryptocurrencies when it rolls out a new PayPal-managed payment platform in 2025. The initiative hopes to spur technological innovation and foster economic growth—but may come with risks. The city’s leaders hope this strategy will modernize Detroit’s municipal services and improve the city’s financial inclusivity, particularly for unbanked residents. While Detroit’s plans are forward-thinking, they may come with more risks than rewards. The initiative brings with it numerous potential downsides, ranging from environmental concerns to dependence on third-party platforms, and high transaction…

The European Union’s “VAT in the Digital Age” (ViDA) reform package, approved by the ECOFIN Council on November 5, 2024, is set to bring major updates to the EU VAT system. For businesses outside the EU, ViDA’s impact will depend largely on their level of engagement within the EU market. Companies without supply chains or physical operations in the EU will see minimal impact. However, those involved in cross-border sales of goods or services or operating certain online platforms within the EU will face more extensive changes, requiring swift updates to their billing and accounting systems. ViDA reform package, introduced…

This is a published version of our weekly Forbes Tax Breaks newsletter. You can sign-up to get Tax Breaks in your inbox here. On a call last week, I suggested that we might not know the election results by the weekend–it turns out that I was wrong (mostly). The Associated Press projected just after 5:30 a.m. Wednesday that Donald Trump would return to the White House after winning Tuesday’s presidential race. And while there are still votes left to count, it’s clear that the Republicans have won the Senate (52 to 44 as of this writing) and likely the House…

The question of whether Bitcoin and other cryptocurrencies should be subject to capital gains taxation has been bandied about for years, but has found renewed interest since former President Trump won a second term. The typical argument for capital gains treatment being inappropriate for cryptocurrencies is an assumption, in contravention of current tax policy, that they are currencies—and that currencies are not subject to capital gains tax. This is partly true, but not for the reasons proponents think, as profits from currency exchanges are by default taxed as ordinary income under Internal Revenue Code (IRC) Section 988. This would mean…

What is an IRS audit?An IRS audit is an examination or review of your information and accounts to ensure you’re reporting things correctly, following the tax laws, and that your reported tax amount is correct. In other words, the IRS is simply double-checking your numbers to make sure you don’t have any discrepancies in your return.Sometimes state tax authorities do audits, too. If you’re telling the truth, and the whole truth, you needn’t worry. Nothing is inherently sinister about an IRS audit or state audit. However, people who are consciously cheating the system do have reason to be concerned.Why the…

State income tax rates receive relatively little attention compared with federal income taxes, but they can still put a large dent in your wallet. How large depends on the amount you earn, as well as where you live and work. Here’s how it works, and a list of state tax rates across the U.S.What is a state income tax?A state income tax is a tax on income earned in that state. It is similar to a federal income tax, but state income tax generally funds state budgets rather than the federal government. Some states have a progressive tax, while others…

In 2024 and 2025, there are seven federal income tax rates and brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Taxable income and filing status determine which federal tax rates apply to you and how much in taxes you’ll owe that year.The federal tax rates will remain the same through the end of 2025 as a result of the Tax Cuts and Jobs Act of 2017. However, the IRS can adjust income thresholds that inform those tax brackets each year to reflect the rate of inflation. 2024 tax brackets and income tax ratesThe 2024 tax brackets apply to income…