AB 71 introduced in California for the 2016-2017 session, proposes to repeal the deduction for mortgage interest on a second home (usually a vacation home) and use the savings (and apparently other funds) for low-income housing.
Tag Archive for tax break
Why are our tax systems so complex? One key reason is that lawmakers keep adding to them and rarely delete anything. Also, items added for temporary purposes are often renewed (rather than dropped or made permanent). Also, we often have numerous rules serving similar purposes (such as for higher education spending or savings).
Well, on October 10, 2015, California Governor Brown, said “NO” to nine tax bills presented to him.
His reason was that they might bust the budget given other budget issues. Each of the nine would have either added or expanded an existing or expired provision or added something new. Read more
With summer just around the corner, there is a tax break that working parents should know about. Many working parents must arrange for care of their children under 13 years of age (or any age if handicapped) during the school vacation period. A popular solution – with a tax benefit – is a day camp program. The cost of day camp can count as an expense towards the child and dependent care credit. But be careful; expenses for overnight camps do not qualify.
For an expense to qualify for the credit, it must be an “employment-related” expense; i.e., it must enable you and your spouse, if married, to work, and it must be for the care of your child, stepchild, or foster child, or your brother or sister or stepsibling (or a descendant of any of these) who is under 13, lives in your home for more than half the year and does not Read more
The general rule for married taxpayers filing their tax returns is that they can only file Married Filing Jointly (MFJ) or Married Filing Separately (MFS). There is, however, a very important exception to this rule. If you are married and separated from your spouse, under tax law you may be considered unmarried if certain conditions are met. This means that you could qualify to use the Head Of Household filing status instead of MFS, and will not be subject to the disadvantages associated with the MFS filing status.
Under tax law, you can be considered unmarried if you meet all the following tests:
• Obviously, you must intend to file a separate return from your spouse.
• You must have paid more than half the costs of keeping up a home for the tax year. Read more
The 7th U S Circuit Court of Appeals has dismissed a lawsuit by the Freedom From Religion Foundation (FFRF) that challenged the constitutionality of the clergy housing allowance. The suit was originally brought in the District Court for the Western District of Wisconsin where Judge Barbara Crabb ruled that the tax break for ministers was unconstitutional. Her basis for the ruling was that the law benefited religious people and no one else. The decision, which would potentially eliminate the most important tax break for ministers, was stayed pending appeal.
The law allows ministers of the gospel to exclude income tax on amounts designated by the church as housing allowance. Self-employment taxes are payable on these amounts. In addition, ministers may “double dip,” as they are allowed to deduct mortgage interest Read more
Australia has had a compulsory superannuation system since the late 80’s. Employers are required to contribute an amount equivalent to 9% of gross pay for each employee earning over $450 a month. Most people can choose (nominate) which fund the contributions are paid into.
The contributions are tax deductible to the employer and investment income of the funds is taxed at the lo rate of 15%. At the moment, pensions and retirement benefits paid out to retirees 60 years old or more are tax free.
Self employed Australians have had their own private funds for around 50 years. However, since compulsory pension arrangements were introduced, many more self employed, Read more