Stay informed on the latest tax news and developments, including legislation and rule changes, for effective tax planning and compliance.
Both supporters and opponents are mobilizing in response to IRS steps toward a new free-file tax return system
The IRS's plan to pilot a free electronic tax return system in 2024 is causing debate, with supporters advocating for a permanent government-run program and critics led by tax preparation firms such as Intuit and H&R Block opposing it. Advocacy groups are out-funded, with these firms investing millions against the initiative. Despite lower lobbying expenditure, proponents of the program argue that public opinion is in their favor. The IRS move comes amidst congressional Republicans' budget cut threats and widespread use of paid tax preparation services due to the tax code's complexity.
Inherited IRA Beneficiaries More RMD Relief for the Time Being
The IRS has repeatedly changed rules regarding non-spousal inherited IRA distributions, causing confusion among beneficiaries. Previously, withdrawals could be spread across a beneficiary's lifetime. Since 2020, a 10-year rule applies, mandating the total sum be taken within this period. IRS proposed further changes in 2022, suggesting some beneficiaries would need to take RMDs and empty the account within a decade. However, final ruling has been deferred till 2024, giving beneficiaries more time for planning their inherited IRA distributions.
No Labels Discuss Taxpayers
No Labels, a political organization, recently issued a policy manifesto with a significant focus on "taxpayers." Historically, this term has been used politically to undermine government spending by highlighting tax burdens rather than spending benefits. In the modern discourse, "taxpayer" often replaces "citizen," potentially skewing the perception of governmental roles and public spending value. Although No Labels emphasizes civic virtues, the use of "taxpayerist" rhetoric might inadvertently negate the concept of a common good.
Because of Federal Research Capitalization Rules, New York Business is Stopped
New York businesses are facing increased federal tax bills for 2022 due to changes in the treatment of research and experimental (R&E) activities. The costs associated with R&E must now be spread over 5 or 15 years, instead of being immediately deductible, hitting innovation-led companies hard. This move contrasts global norms and could result in businesses leaving New York to balance their tax bills. The broad definition of R&E impacts numerous industries. Examples show how companies could incur significant additional tax, stunting growth and forcing a redirection of cash to tax bills.
