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It looks like Senate Majority Leader Mitch McConnell (R-KY) may bring a vote on the Senate “skinny” bill – the latest coronavirus relief bill. Why is it skinny? It has a slimmer price tag – and fewer benefits – than before. Some Quick History In May, House Speaker Nancy Pelosi (D-CA) announced a $3 trillion COVID-19 economic relief proposal known as the Health and Economic Recovery Omnibus Emergency Solutions Act, or HEROES Act. The Senate countered in July with a series of proposals referred to as the Health, Economic Assistance, Liability Protection, and Schools Act, or HEALS Act, which weighed in at about $1 trillion. The idea was that they should meet in the middle. That’s how we arrived at the “Delivering Immediate Relief to America’s Families, Schools and Small Businesses Act” introduced by the Senate which is estimated to cost (checks notes) $500 billion. The bill largely reflects a…

Taxpayer asks: Are tax rates locked in at start of year ?? I’d like to do a Roth conversion in early Jan 2021. Can I count on Trumps current tax rates ? If Biden would wins, could he change the rates before year end ?? Taxgirl says: Even though we like to call tax policy names associated with the President in office at the time of the change or rate (ie “Bush tax cuts”), it’s not actually the President who is responsible for tax policy: that’s Congress’ role. The rules that changed as a result of a Tax Cuts and Jobs Act (TCJA) are slated to stay in effect largely through 2025. That won’t change if we get a new president. It will only change if Congress changes the law. And while it’s true that the President has influence over tax policy, that doesn’t mean that there’s automatic change. Consider…

(Updated to add the letter from the Chamber.) Last week, President Trump took Presidential action to act on payroll tax collections. Specifically, he ordered that the employee’s share of Social Security taxes be deferred beginning September 1, 2020, through December 31, 2020, for workers earning up to $104,000 per year. While it has been touted as a cut, the Executive Order only allows for deferral. That means – without further action – that the taxes have to be paid. The deferral is effective for the period of September 1, 2020, through December 31, 2020. You can find out more about the order here. Following the signing of the directive, tax professionals and taxpayers had questions about how the deferral might work. Today, Treasury Secretary Steven Mnuchin gave FOX Business’ Maria Bartiromo a first look into how that might work, and it appears that the deferral will be voluntary. Forbes AdvisorCalculate Your Payroll Tax Savings…

On August 6, 2020, the Senate adjourned without passing a stimulus package. Senate Majority Leader Mitch McConnell (R-KY) wasn’t involved in the talks, leaving Senate Minority Leader Chuck Schumer (D-NY) and House Speaker Nancy Pelosi (D-CA) to work directly with Treasury Secretary Steve Mnuchin and White House Chief of Staff Mark Meadows. As of Friday night, the sides reported that they had not reached an agreement. Today, apparently frustrated with Congress’ inaction, President Trump signed Executive Orders that would alter the current scheme. Among them? A payroll tax deferral. Specifically, the Order says: To that end, today I am directing the Secretary of the Treasury to use his authority to defer certain payroll tax obligations with respect to the American workers most in need. This modest, targeted action will put money directly in the pockets of American workers and generate additional incentives for work and employment, right when the money…

On August 6, 2020, the Senate adjourned without passing a stimulus package. Senate Majority Leader Mitch McConnell (R-KY) wasn’t involved in the talks, leaving Senate Minority Leader Chuck Schumer (D-NY) and House Speaker Nancy Pelosi (D-CA) to work directly with Treasury Secretary Steve Mnuchin and White House Chief of Staff Mark Meadows. As of Friday night, the sides reported that they had not reached an agreement. On Saturday, apparently frustrated with Congress’ inaction, President Trump issued a number of Executive Orders and Memoranda affecting payroll taxes, unemployment benefits, eviction procedures, and student loans. Since the orders were issued separately, that’s how I’m tackling them. You can read my take on payroll taxes here, and my summary on student loan relief here. Next up: unemployment benefits. Concerning unemployment benefits, the Order says: I am hereby directing the Federal Emergency Management Agency (FEMA) to assist in providing benefits from the DRF, and am calling upon…

It’s my annual Taxes from A to Z series! If you’re wondering how to figure basis for cryptocurrency or whether you can claim home office expenses during COVID, you won’t want to miss a single letter. S is for Sunset. Tax rules change a lot. But some of what is sometimes billed as change isn’t so much new as it is a reversion to the old. Take the Tax Cuts & Jobs Act (TCJA), for example. Passed in 2017, most of the provisions that apply to individual taxpayers, including individual tax cuts, the increased standard deduction, and the expanded child tax credit, are set to expire at the end of 2025. When that happens, the law goes back to the way that it was before the provisions were implemented. When that happens, it’s called a “sunset,” which, I know, sounds way prettier than it actually is. But how do we…

In March of 2020, the Senate passed the Coronavirus Aid, Relief, and Economic Security Act or the CARES Act. It was bigger than the original Senate proposal but smaller than the subsequent House proposal. Eventually, the two reconciled and the CARES Act became law. In May of 2020, the House introduced and passed a new COVID-19 economic relief proposal. The bill, known as the Health and Economic Recovery Omnibus Emergency Solutions Act, or HEROES Act, was not taken up by the Senate. At the time, Senate Majority Leader Mitch McConnell (R-KY) suggested that the timing was not right for another bill. But with just a few days to go before federal unemployment benefits run out, that appears to have changed. You might be looking for the “HEALS Act” (Health, Economic Assistance, Liability Protection, and Schools Act) being put together under Sen. McConnell’s watch. So far, there is no single bill, but rather a…

One of the drumbeats of the current Congress is the need to be more fiscally responsible. That makes sense. Our current national debt is $26,536,793,171,015 – and growing. The federal deficit – so far for 2020 – is $2.744 trillion. That’s following a Congressional Budget Office (CBO) report showing a deficit of $864 billion in June, more than 100 times larger than last June’s deficit of $8 billion. And we know the reasons: revenues are down, and spending is up. As a quick explainer, the federal deficit is the overage of expenditures versus revenue/receipts in a fiscal year (June was the 9th month of the fiscal year). The federal debt is more or less the aggregate of all of the deficits that we amass and represents borrowed money. You can read more here.) And we don’t expect things to turn better quickly because we are in the middle of a pandemic. Enter Congress…

In March of 2020, the Senate passed the Coronavirus Aid, Relief, and Economic Security Act or the CARES Act. It was bigger than the original Senate proposal but smaller than the subsequent House proposal. Eventually, the two reconciled, and the CARES Act became law. In May of 2020, the House introduced a new COVID-19 economic relief proposal. The bill, known as the Health and Economic Recovery Omnibus Emergency Solutions Act, or HEROES Act, was not taken up by the Senate. At the time, Senate Majority Leader Mitch McConnell (R-KY) suggested that the timing was not right for another bill. But with just a few days to go before federal unemployment benefits run out, that appears to have changed. You might be looking for the “HEALS Act” (Health, Economic Assistance, Liability Protection, and Schools Act) being put together under Sen. McConnell’s watch. So far, there is no single bill, but rather a series of proposals. Various committee chairs have drafted…

Earlier today, the Senate passed S. 3841 by unanimous consent. The bill, which was first introduced by Senators Chuck Grassley (R-IA), Sherrod Brown (D-OH), Ron Wyden (D-OR) and Tim Scott (R-SC) in May, is titled “A bill to protect 2020 recovery rebates for individuals from assignment or garnishment, and for other purposes.” According to Sen. Grassley, the Chair of the Senate Finance Committee, “This is a common sense measure that will ensure the $1,200 Economic Impact Payments Congress provided to help individuals meet essential needs during these trying times don’t instead end up in the pockets of creditors and debt collectors.” Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) in March of 2020. As part of the CARES Act, Congress provided for “recovery rebates” – or what most folks call stimulus checks – for many Americans. Those checks, of up to $1,200 for each qualifying adult, and an additional $500 per qualifying…

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