Geez, they’re no fun…..
The Treasury Department and the IRS announced in Notice 2018-54 that they intend to propose regulations aimed at countering the efforts of California and other states in their attempts to help taxpayers get around the new $10,000 cap on state and local tax deductions.
Beginning with the January 2018 tax year, “The Tax Cuts and Jobs Act” (TCJA) limits the deduction of state and local taxes from an individual’s federal taxes to $10,000. For California and other high property value states that is likely to expose many taxpayers to an increase in their federal taxes.
In response, some state legislatures are considering proposals that in effect allow a tax payer to pay their state and local property taxes into funds that could be characterized as “charitable contributions” and thus be fully deductible on their federal tax returns. The “charitable” funds would then transfer the “contributions” to the state and local authorities to satisfy the taxpayers’ liabilities.
While this seemed like a way for saving many taxpayers from increased tax bills, the Treasury and IRS are saying not so fast. They remind all that federal law supersedes state law for federal tax law purposes, and that new regulations will be drafted to make this very clear to taxpayers.
Hey, look everyone! The IRS is telling a militant sanctuary state that it has to recognize federal law over state-sanctioned whims! They so funny! Tee Hee!
I got this update from CAR, who then issued a correction later in the day. The new tax law starts this tax year, not in 2019. They apologized for the mistake.
It would do good to remember when and why the Federal income tax was instituted.
Liquor, of course.
Before the Federal income tax (which required an amendment to the Constitution), most Federal revenue came from liquor taxes. The only way the Women’s Christian Temperance League and the rest of their ilk could possibly get Prohibition to pass was to replace the lost revenues from the liquor tax with a nation-wide income tax.
While Prohibition is long gone, its predecessor will haunt us forever.
“While Prohibition is long gone, its predecessor will haunt us forever.”
Which is why I always say, leave prop 13 alone, and stop voting for new taxes. Quit voting to hand your money (and especially mine) to declared professional grifters, you ignorant Jethro Bodine podunks.
Mr. Drysdale ain’t gonna build you no cheap bullet train, and I hope Ellie Maye beats the tar out of you, since there ain’t no sense to beat out of you.
And thank you for listening.