Americans generally pay three sets of taxes: local, state and federal. In the past, they could deduct all or most of their local and state taxes when they paid their federal taxes. Last year’s $1.5 trillion tax overhaul, however, limited the amount of state and local taxes (sales tax, income tax and property tax) that taxpayers could deduct from their federal taxes. The maximum allowed for all deductions is $10,000.
In response, some states developed creative ways to help taxpayers in their jurisdictions who owe more than $10,000 still fully deduct all of their taxes.
Written by Republicans, the policy has the most impact on Democrats in high-tax states.
New York decided to allow taxpayers to reclassify their local property taxes as charitable contributions, which are fully deductible from federal taxes. New Jersey and Connecticut are developing similar plans. New York is also establishing a new system that allows taxpayers to convert their state income tax to a payroll tax, which companies would pay on their behalf and then deduct from their federal tax bill.
Angry that governments are finding creative ways to circumvent the new statutory limitation, the Internal Revenue Service (IRS) issued a warning for them to stop.
A senior official at the Treasury department said they are issuing several more similar statements, all intended to deal with potential loopholes in the tax law.
후원참여
조회 : 3,266
