Tax Credits, Deductions and Exemptions

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    Republicans Want Lower Taxes. The Hard Part Is Choosing What to Cut.

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    House Republicans are preparing to adopt a plan that puts a $4.5 trillion limit on the size of the tax cut, but even that will not be enough for some of President Trump’s promises.Since their party swept to power, Republicans have entertained visions of an all-inclusive tax cut — one that could permanently lower rates for individuals, shower corporations with new incentives and deliver President Trump’s sprawling suite of campaign promises.If only it were so easy.House Republicans are preparing to adopt a budget plan that puts a $4.5 trillion upper limit on the size of the tax cut. Even such a huge sum is not nearly enough for all of their ideas, and so lawmakers must now decide which policy commitments are essential and which ones they can live without.For a sense of the Republican predicament, take a look at the 2017 tax cuts. Many of the measures in that law, including a larger standard deduction and more generous child tax credit, expire at the end of the year. The overriding goal of this year’s bill is to extend the expiring provisions, which provide their largest benefits to the rich, before they end.But accomplishing just that would cost roughly $4 trillion over the next 10 years. Then there’s a coveted business tax break for research and development — which, in an example of the zigzag of tax policy in Washington, Republicans wound down in 2017 and now want to revive. That would be another $150 billion. Allowing companies to once again deduct more of the interest on their debt is another $50 billion.Those changes are the table stakes. They essentially amount to preserving the status quo. And together they would eat up all but $300 billion of the $4.5 trillion Republicans are giving themselves to cut taxes. That’s not very much money, considering the ambitions Mr. Trump and other Republicans have for the bill.The squeeze is on.“You do start running out of space to do other things,” said Andrew Lautz, a tax policy expert at the Bipartisan Policy Center, a think tank.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Woman Pleads Guilty in Covid Tax Credit Scheme That Netted $33 Million

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      A Nevada business owner prepared and filed false tax returns to fraudulently obtain Covid relief money for her businesses and others, prosecutors said.Some people binge-watched shows during the Covid pandemic. Others picked up pickleball. But according to federal prosecutors, one Las Vegas woman prepared and filed false tax returns for her business and others at a busy average rate of nearly 80 per month.Over a 16-month period beginning in June 2022, the Justice Department said Friday, the woman, Candies Goode-McCoy, filed more than 1,200 returns in order to fraudulently claim Covid-19 tax credits of nearly $100 million.Ms. Goode-McCoy, 34, who pleaded guilty under a plea agreement on Thursday in U.S. District Court in Las Vegas to charges of conspiracy to defraud the government, managed to get the I.R.S. to pay out about $33 million, prosecutors said. She took $1.3 million of that herself, they said, and received an additional $800,000 from those for whom she prepared the false returns.Ms. Goode-McCoy, who could face as much as 10 years in prison when she is sentenced in February 2026, used the money to gamble at casinos, take vacations and buy luxury cars, prosecutors said. She also purchased designer clothing from Dolce & Gabbana, Gucci and Louis Vuitton, court documents show.Her lawyer could not be reached for comment on Friday.According to prosecutors, the businesses for which Ms. Goode-McCoy prepared taxes were not eligible to receive the refundable credits in the amounts claimed.Under the plea agreement, Ms. Goode-McCoy agreed to return the most of the $33 million that was fraudulently obtained.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Supreme Court to Hear Catholic Charity’s Bid for Tax Exemption

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      The justices agreed to hear an appeal from a Wisconsin Supreme Court ruling that the charity’s activities were insufficiently religious to qualify.The Supreme Court agreed on Friday to decide whether Wisconsin was free to deny a tax exemption to a Catholic charity on the grounds that its activities were not primarily religious.The court has been notably receptive to arguments from religious groups, and the new case will give the justices another opportunity to explore the limits of the First Amendment’s protection of religious liberty.The case concerns a Wisconsin law that exempts religious groups from state unemployment taxes so long as they are “operated primarily for religious purposes.”Catholic Charities Bureau, the social ministry of the Catholic Diocese in Superior, Wis., has said its mission is to provide “services to the poor and disadvantaged as an expression of the social ministry of the Catholic Church.” State officials determined that the charity did not qualify for the exemption because it “provides essentially secular services and engages in activities that are not religious per se.”The Wisconsin Supreme Court said it accepted the charity’s contention that its services were “based on Gospel values and the principles of the Catholic social teachings.” But the court ruled that the group’s activities were “primarily charitable and secular” and did not “attempt to imbue program participants with the Catholic faith nor supply any religious materials to program participants or employees.”The court added that “both employment with the organizations and services offered by the organizations are open to all participants regardless of religion.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Those Voters Who Are Still Undecided

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      More from our inbox:Michelle Obama’s Plea to American MenAn Ex-N.F.L. Player, on Marijuana ReformBipartisan Action Needed to Support Our Children Rob VargasTo the Editor:Re “These Voters Aren’t Exactly Undecided. They’re Cringing,” by Megan K. Stack (Opinion guest essay, Oct. 20):I am struck by undecided voters who are still, at this point, paralyzed by the feeling that neither of the candidates are “good” options, or that they don’t “like” either choice.To those struggling to vote outside their party affiliation, or to vote at all: The cognitive dissonance you feel is uncomfortable, yes, but consider who benefits most from the resulting inaction. It’s not the voter, it’s individuals and groups who use political power and tribalism for their own gain.This election is not a sporting event, it is real life, and we owe it to ourselves and to each other to use our hard-won right to vote thoughtfully, no matter how uncomfortable it is.Natasha Thapar-OlmosLos AngelesThe writer is a licensed psychologist and a professor at Pepperdine University.To the Editor:Re “Battle Is Fierce for Sliver of Pie: Undecided Votes” (front page, Oct. 22):Women can save our country, and I believe they will. They know what is at stake — not only free choice regarding their bodies but also a democracy that celebrates the diversity of its citizens.As the online summary said of the undecided voters: “Both campaigns are digging through troves of data to find these crucial Americans. They both think many are younger, Black or Latino. The Harris team is also eyeing white, college-educated women.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Trump and Harris Both Like a Child Tax Credit but With Different Aims

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      Kamala Harris’s campaign is pushing a version of the credit intended to fight child poverty, while Donald J. Trump sees the program primarily as a tax cut for people higher up the income scale.Vice President Kamala Harris has made an expanded child tax credit central to her campaign, and former President Donald J. Trump boasts, “I doubled the child tax credit.” With a quick look, voters might think the child-rearing subsidy the rare matter on which the rival candidates agree.It is anything but. The common vocabulary masks profound differences over which parents the government should help and what constitutes fairness for children in a country of great wealth and inequality.Mr. Trump sees the $110 billion program mostly as a tax cut, which as president he increased to $2,000 per child and extended to high-income families. But his policy denies the full benefit to the poorest quarter of children because their parents earn too little and owe no income tax.Ms. Harris would expand the tax cuts and add a large anti-poverty plan, sending checks to millions of parents with low pay or no jobs. That would turn a tax cut into an income guarantee, in a landmark expansion of the safety net.Supporters of the Harris plan say the payments would shrink child poverty. Critics see an expensive welfare scheme that could weaken the willingness to work.“They’re both talking about something called the ‘child tax credit,’ but they’re not at all talking about the same policy,” said Scott Winship of the conservative American Enterprise Institute.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Is It Better to Buy or Lease a Car? It Depends.

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      The lowest overall cost is to buy a car and keep it for a long time. But leasing usually has lower monthly costs. And leasing an E.V. may come with a tax break.Most people have two options when they want a new car: buy it with a traditional loan or lease it.Either can make sense, depending on your personal situation.If you’re looking for the lowest overall cost over the longer term, buying a car with a loan, and then driving it for a while debt free after you finish making payments, is usually the best option.But if low monthly payments and a smaller down payment are a priority, a lease may be worth considering. And if you’re willing to try an electric vehicle or a plug-in hybrid, tax breaks available for leased models may make deals more affordable. Almost half of new E.V.s were acquired with leases in the second quarter of this year, up from around a fourth a year earlier, according to data from Experian.The Federal Reserve’s decision on Wednesday to cut its benchmark rate by half a point indirectly affects rates on car loans, which are also influenced by factors like the borrower’s credit score and the level of loan delinquencies. The average interest rate for a new-car loan in August was 7.1 percent, and 11.3 percent for a used-car loan, according to the automotive site Edmunds. “It will take a number of additional rate cuts before the cumulative effect becomes material for car buyers,” said Greg McBride, chief financial analyst at Bankrate.Paying cash for your car is, of course, interest free. But while car prices have eased somewhat, they remain high. The average transaction price in July was around $48,000 for a new car, and about $25,000 for a used car, according to Kelly Blue Book, part of Cox Automotive. Most people who buy a new automobile and many who buy one used get some kind of financing.With a traditional loan, you make a down payment and then pay off the debt with fixed monthly payments over time. (The average new-car loan term is about six years.) When the loan is repaid, you can keep the car and drive it payment free or trade it in and get credit for its value toward your next car purchase.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Trump’s Proposal to End Taxes on Overtime Pay Could Cost Billions

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      Former President Donald J. Trump is calling for exempting overtime pay from taxes, the latest in a string of vague tax proposals that have befuddled tax experts, worried fiscal hawks and seemingly charmed voters.Mr. Trump floated the idea this past week during a campaign rally in Tucson, Ariz., telling the crowd that it would supercharge incentives to work more and put money back in the pockets of many Americans.“It’s time for the working man and woman to finally catch a break, and that’s what we’re doing because this is a good one,” he said.The pitch is part of what has become Mr. Trump’s playbook during the presidential race: tossing out potentially huge tax cuts, defined in just a few words, to try and win over middle- and working-class voters. He has also vowed to exempt tips from taxes and end taxes on Social Security benefits, two ideas that have proven popular. At the same time, he has said he would further cut the corporate tax rate.As with his promise to end taxes on tips, though, Mr. Trump left many key details about the overtime plan unaddressed, making it hard to estimate its costs. Among the open questions is whether overtime pay would be exempt from just the income tax or if the exception would also apply to the payroll taxes that fund Social Security and Medicare.There is also the issue of how many Americans could benefit from Mr. Trump’s idea. More than 34 million Americans worked over 40 hours a week in 2023, according to the Bureau of Labor Statistics, but only a subset of that group are owed time-and-a-half pay for overtime under federal law. The rules are complex, but in general Americans earning a salary of more than $43,888 a year may not be owed overtime, depending on their job. Americans paid by the hour, currently about 55 percent of the work force, are broadly eligible for overtime pay.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      The Cass Report: Biased or Balanced?

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      More from our inbox:Child Tax Credits Can Save Women’s LivesWake Up, RepublicansRicardo TomásTo the Editor:Re “The Strange Report Fueling the War on Trans Kids,” by Lydia Polgreen (column, Aug. 18):Thank you to Lydia Polgreen for this thoughtful, well-researched piece. She clearly identified the faulty and dangerous unspoken premise of the Cass report and much of the reporting on this topic: that being transgender is socially deviant and harmful, and we should do everything in our collective power to reserve gender-affirming care for those we deem virtuous enough to become “good” members of society.She also pointed out critics’ double standards. Our medical system routinely provides — without controversy — the same gender-affirming medications to cisgender children and adolescents that it provides to trans children and adolescents. The issue is clearly not “concern for children” but the deep-rooted transphobia that this “concern” masks.What if we didn’t think of being trans as being deviant or broken? What if we saw it for what it is: an identity as old as human existence that is as worthy of respect and celebration as any other, especially amid this climate of fear? What if we focused less on creating unnecessary barriers to care and more on protecting the right to self-determination and access to health care that respects each person’s unique needs?Libby Hartle-TyrrellBrooklynTo the Editor:Lydia Polgreen speculates on the legitimacy of the Cass report in what I see as an effort all too common among public figures: to burnish their liberal credentials at the expense of families like mine. They state that pediatric gender transition is too politicized, but blame only the Republicans. But I wish, I beg, that they talk to parents like me.Many of us are liberal, (formerly) Democratic professionals whose kids have been caught up in the left’s politicization of this issue. Our kids — who are smart, but struggle with mental health issues and anxiety — spent too much time online during Covid and self-diagnosed themselves as gender dysphoric. Meanwhile, activists have aggressively pushed an affirm-or-else, one-size-fits-all policy on educators, mental health providers and doctors.This confluence has created a dystopian nightmare for well-educated, thoughtful and compassionate parents who urge caution and question medicalization. People who we used to align with politically are telling our kids that we are transphobic and support their cutting us off. We grieve and watch in horror as our vulnerable kids permanently scar their bodies, reproductive organs and voices.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Harris y Trump presentan un claro contraste sobre la economía

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      Ambos candidatos abogan por ampliar el poder del gobierno para dirigir los resultados económicos, pero en ámbitos muy diferentes.[Estamos en WhatsApp. Empieza a seguirnos ahora]La vicepresidenta Kamala Harris y el expresidente Donald Trump volaron a Carolina del Norte esta semana para pronunciar lo que se anunciaron como importantes discursos sobre la economía. Ninguno de los dos expuso un plan detallado de políticas: ni Harris, que se centró durante media hora en la vivienda, los comestibles y los medicamentos con receta, ni Trump, que durante 80 minutos desperdigó varias propuestas entre reflexiones en voz alta sobre inmigrantes peligrosos.Pero ambos candidatos, cada uno a su manera, enviaron a los votantes mensajes claros e importantes sobre sus visiones económicas. Cada uno de ellos defendió la visión de un gobierno federal poderoso, uno que utilice su poder para intervenir en los mercados en busca de una economía más fuerte y próspera.Solo discreparon, casi por completo, sobre cuándo y cómo debe utilizarse ese poder.El viernes en Raleigh, Harris empezó a imprimir su propio sello a la economía progresista que ha dominado la política demócrata en la última década. Este pensamiento económico abraza la idea de que el gobierno federal debe actuar con agresividad para fomentar la competencia y corregir las distorsiones en los mercados privados.El planteamiento busca grandes subidas de impuestos a las empresas y a quienes obtienen ingresos altos, para financiar la ayuda a los trabajadores de ingresos bajos y de clase media que luchan por crear riqueza para sí mismos y para sus hijos. Al mismo tiempo, ofrece grandes exenciones fiscales a las empresas que se dedican a lo que Harris y otros progresistas consideran un gran beneficio económico, como la fabricación de tecnologías necesarias para luchar contra el calentamiento global o la construcción de viviendas asequibles.Esta filosofía anima la agenda política que Harris presentó el viernes. Se comprometió a entregar hasta 25.000 dólares en ayudas al pago inicial a cada comprador de primera vivienda durante cuatro años, al tiempo que destinaría 40.000 millones de dólares a empresas constructoras de primeras viviendas. Harris afirmó que reinstauraría de forma permanente el crédito tributario por hijos ampliado que el presidente Biden estableció temporalmente con su ley de estímulo de 2021, al tiempo que ofrecería aún más ayuda a los padres de recién nacidos.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More