pay taxes – Eshcinsel http://eshcinsel.net/ Sun, 17 Apr 2022 16:02:36 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://eshcinsel.net/wp-content/uploads/2021/10/icon-41-120x120.png pay taxes – Eshcinsel http://eshcinsel.net/ 32 32 Eliminating Personal Property Tax Would Cost County Millions | Local News https://eshcinsel.net/eliminating-personal-property-tax-would-cost-county-millions-local-news/ Mon, 14 Mar 2022 00:00:00 +0000 https://eshcinsel.net/eliminating-personal-property-tax-would-cost-county-millions-local-news/ A complete repeal of the business personal property tax would cost Howard County tens of millions of dollars in tax revenue and shift more of the tax burden to owners and other tax classes. according to a recently published study commissioned by the Indiana Counties Association. A tax analysis found that Howard County as a […]]]>

A complete repeal of the business personal property tax would cost Howard County tens of millions of dollars in tax revenue and shift more of the tax burden to owners and other tax classes. according to a recently published study commissioned by the Indiana Counties Association.

A tax analysis found that Howard County as a whole would stand to lose $28.7 million — from $127.8 million to $99.1 million — from its maximum levy in 2026 if the state completely abolished the personal property tax for businesses. The analysis was conducted by Larry Deboer, a retired professor of agricultural economics at Purdue University, and Indianapolis-based economic research firm Policy Analytics. The maximum levy is the amount that a government tax unit is allowed to collect each year in property tax revenue.

Such action would result in higher taxes for household, commercial and agricultural landowners, reduced government services or both, the study suggests, especially in counties that rely heavily on the BPP and whose tax bases are already close. tax imposed by the state. caps.

The study found that Howard County would be one of 14 counties in the state with a loss of more than 16% of its total drawdown, the highest percentage loss. Other counties in the same category include Blackford, Vermillion and Vigo counties.

Business property tax accounts for about one-third of the county’s total tax revenue, according to the study. This is due to the county’s heavy manufacturing base. Although large manufacturers, such as Stellantis, pay property taxes, they also pay taxes on the machinery and equipment in their facilities, called personal property.

According to the study, residential properties would pay 58% of all property taxes in 2026 if the business property tax were removed. This is an increase from 32% in 2021. Commercial and agricultural properties would also see their share of the tax burden increase, but not as much, from 16% to 20% and 15% to 21%, respectively.

The Indiana General Assembly has not proposed to completely eliminate business property taxes, although it did propose this year to reduce business property taxes by eliminating the 30% depreciation floor for new equipment installed with no revenue replacement noted for affected local governments.

The tax value on business equipment declines over time, but under current state law, the taxes businesses pay on their machinery and equipment can never fall below 30% of the cost.

Removing this floor, while not completely eliminating the business property tax, would still result in a loss of revenue for local governments.

Local governments, as a whole, would lose about $103 million in fiscal year 2037 due to the change, while the state would lose between $332 million and $423 million a year through 2034, according to a report by the Indianapolis Star.

The elimination of the 30% depreciation floor was included, along with various other tax reductions such as a reduction in personal income tax, in this year’s HB 1002, which passed by the House with the support of local representatives Mike Karickhoff and Heath VanNatter.

But the bill was gutted in a state Senate committee.

Ultimately, the state legislature opted for a personal income tax cut from 3.23% to 2.9% over 10 years. The first tax cut comes in 2023 when it drops from 3.23% to 3.15%. Subsequent cuts have triggers and will only take effect if revenues increase by 2% and pre-1996 teachers’ pension obligations are honored. The state also repealed its 1.4% utility tax.

Making changes to the BPP was a major legislative issue for Governor Eric Holcomb during this legislative session as a way to spur investment in new equipment and attract new employers. His office said Indiana’s 30% floor is the highest in the nation, and neighboring states of Illinois and Ohio do not have such a floor.

The Indiana Manufacturer’s Association, an organization that represents more than 1,000 manufacturing companies in the state, had pushed for the elimination of the 30% depreciation floor, arguing that state and local governments seeing budget surpluses thanks to the federal stimulus can afford the proposed change. .

“Economic development and fiscal policy focused on growth and private sector investment are extremely important to Indiana manufacturers,” wrote Brian Burton, president and CEO of the Indiana Manufacturers Association, in a February 24 letter to the editor of several press agencies. “The same goes for quality government services in Indiana State and local government units. Indiana leaders are capable of doing both. They can afford it. »

Although any changes to the business property tax did not go through this time around, the attempt by the General Assembly involved local elected officials in city and county governments.

Last month, Howard County Council sent a letter signed by council chairman Jamie Bolser to local state officials expressing concern over any changes to the corporate personal property tax without a mechanism. replacement income. The county council did not speak out explicitly against eliminating the 30% depreciation floor, but rather against the state’s failure to provide income replacement for the losses such a change would cause.

“Any change to this would place a significant undue burden on our owners at a time when inflation is tethering Hoosiers to gas pumps and grocery stores,” the letter said.

“Howard County residents and government units cannot afford to make any further changes to the business property tax structure, including proposed changes to the depreciation floor.”

In 2021, business property tax revenue was $34.7 million, or about one-third of all total revenue collected in Howard County, according to the county auditor’s office.

The loss of business property tax would be heavily felt by the town of Kokomo, where the vast majority of business equipment is located.

According to City Comptroller Wes Reed, the city collected $41 million in property taxes in 2021. About 44% of that amount, or just over $18 million, came from business property taxes.

“Given that this legislation could have such a significant impact on our budget, we are obviously concerned about the ripple effects as we all continue to grapple with the continuing effects of inflation; any drop in revenue could cause very real problems,” Reed said in an email to the Tribune.

For now, local officials can breathe a sigh of relief, but some expect the issue to come up again next year, especially since it was a priority item on the agenda. Governor’s Day and State Legislature.

“If they (the state legislature) are taking the money, they need to have a plan to replace it,” said Martha Lake, county councilor and former county auditor.

]]>
GUEST VIEW: Property tax reform faces another climb | https://eshcinsel.net/guest-view-property-tax-reform-faces-another-climb/ Sun, 13 Mar 2022 01:54:00 +0000 https://eshcinsel.net/guest-view-property-tax-reform-faces-another-climb/ ONCE AGAIN, State Rep. Frank Ryan deserves credit for tackling the ever problematic issue of school property taxes with a refreshingly honest approach. The Lebanon County Republican is once again introducing legislation to eliminate school property taxes and change the way education is funded in Pennsylvania. For many years, there has been a movement to […]]]>

ONCE AGAIN, State Rep. Frank Ryan deserves credit for tackling the ever problematic issue of school property taxes with a refreshingly honest approach.

The Lebanon County Republican is once again introducing legislation to eliminate school property taxes and change the way education is funded in Pennsylvania.

For many years, there has been a movement to stop relying on property taxes to fund schools. People are hit with bills of thousands of dollars every year. This is especially difficult for seniors on fixed incomes. In many cases, these people no longer have to make mortgage payments, so the tax bill is paid in one large lump sum each summer.

Although the idea of ​​eliminating the property tax is widely popular, especially in these areas, the idea continues to run into a few hiccups. This is first and foremost about providing a fair replacement for the income at stake and ensuring that it is as reliable a source of money as the property tax has been. The other issue is how to distribute revenues to school districts.

For starters, Ryan acknowledges that the complexity of the current school funding model has made it difficult to change. And he urges people to accept the reality that people will always have to pay taxes to fund education, no matter what system is in place.

“Everyone wants to get rid of property taxes as long as the other person is the one who is going to pay the replacement tax,” the Lebanon County Republican said as he introduced Bill 13. “Clearly any solution will require sacrifices from all Pennsylvanians.

It may not be what people want to hear, but it is the truth. To eliminate local property taxes, the state government would need to find $16 billion beyond its current contribution of more than $8 billion. There’s no painless way

Ryan’s bill is similar to legislation he has introduced before, without success. The legislation seeks to replace property tax revenues with sales and income taxes. This would raise state income tax to 4.92%, with those funds going to the local school district. The state sales tax would increase by 2%, with those funds going to each county to be allocated to school districts. Sales tax would be expanded to include clothing and food, with a food tax exemption for recipients of public assistance.

The bill would tax retirement income, excluding income from Social Security, military pensions and member contributions to retirement plans. Workers’ contributions to a pension plan would be tax deductible.

This is where things get tricky. A tax on retirement income is bound to be unpopular with seniors, even the riding most enthusiastic about eliminating the property tax. Taxing clothing and food is a regressive levy that would hurt vulnerable Pennsylvanians and negatively affect retailers in the state.

Having the state and counties dictate how much money each district gets takes away a key aspect of local control over education. A fixed income tax is unlikely to generate the revenue needed to meet rising costs over time. And given the state’s track record of funding education, we’re not convinced there will be an equitable distribution of resources any more than there is now. It could make things worse.

That’s not to say these ideas aren’t worth discussing. They are. Any solution is going to be painful for someone. But persuading people to accept this requires a steep climb.

We commend Ryan for pointing out that if the school property tax is eliminated, replacing lost income will require many Pennsylvanians to make sacrifices.

We agree that property tax has serious disadvantages, but we also believe that the state must ensure that there is enough money available for a solid education in all communities across our Commonwealth. We hope that Ryan’s insights will spark further discussion on how to solve both problems in a way that most of us can accept.

Reading Eagle | PA

]]>
SC Senate unanimously passes income tax cut and refund – WSOC TV https://eshcinsel.net/sc-senate-unanimously-passes-income-tax-cut-and-refund-wsoc-tv/ Sat, 12 Mar 2022 11:54:50 +0000 https://eshcinsel.net/sc-senate-unanimously-passes-income-tax-cut-and-refund-wsoc-tv/ COLUMBIA, SC — The South Carolina Senate unanimously passed a $2 billion income tax reduction and refund bill, setting in motion what will likely be intense negotiations with the House on the $1 billion tax cut passed last month. Thursday’s vote came just three weeks after Senate Finance Committee Chairman Harvey Peeler first proposed the […]]]>

COLUMBIA, SC — The South Carolina Senate unanimously passed a $2 billion income tax reduction and refund bill, setting in motion what will likely be intense negotiations with the House on the $1 billion tax cut passed last month.

Thursday’s vote came just three weeks after Senate Finance Committee Chairman Harvey Peeler first proposed the cut.

Proposal would send a rebate of at least $100 to everyone who files a South Carolina tax return, whether or not they pay taxes. Taxpayers who owe state income tax would recover that amount in 2022 up to $700. It would cost about $1 billion.

The other $1 billion would be used to cut the state’s top tax rate from 7% to 5.7%, reduce property taxes paid by most manufacturers from 9% to 6%, and completely eliminate taxes on military retirement income.

Peeler has long had a goal of lowering taxes. He was blessed when he took over the committee in December to have a combination of a booming economy, federal stimulus money and savings in case the COVID-19 economic downturn was catastrophic. All of this left a windfall of $4.5 billion in state bank accounts.

Peeler was soaking up the moment as every senator cast a ‘yes’ vote on Thursday’s roll call that he nearly missed the chance to vote for himself.

“I’m like a dog playing poker. When I get a good hand, my tail starts wagging,” said Peeler, a Republican from Gaffney.

Senators applauded Peeler after the vote.

After another routine approval, the bill heads to the House, which has already passed its own set of tax cuts which includes exemption from military income tax and reduces the top tax rate from 7% to 6.5% next year and continues to reduce it to 6% over five years. It also cuts all other tax brackets to the lowest group at 3%, costing about $600 million in the first year and $1 billion when fully implemented.

Chances are neither chamber will agree to the other’s plan, so a small group of lawmakers will negotiate the differences, likely as they also craft the state’s $14 billion budget later. in spring.

Senate Majority Leader Shane Massey has left no doubt as to which version he believes should prevail.

“I like that he does everything at the same time. You mean it,” the Edgefield Republican said of Peeler’s plan. “We have the resources. Let’s do it.

(WATCH BELOW: Bill to smash South Carolina’s DHEC moves forward)

]]>
Gig workers need to prepare for a tax surprise https://eshcinsel.net/gig-workers-need-to-prepare-for-a-tax-surprise/ Thu, 03 Mar 2022 16:58:36 +0000 https://eshcinsel.net/gig-workers-need-to-prepare-for-a-tax-surprise/ Many people new to the gig economy get a rude surprise the next time they file their income taxes. Indeed, income from conducting Uber, Lyft, or GrubHub, or contracted services such as professional writing or graphic arts, online sales through Amazon or other marketplaces, or even services dog walking and house sitting are taxable. (Other […]]]>

Many people new to the gig economy get a rude surprise the next time they file their income taxes. Indeed, income from conducting Uber, Lyft, or GrubHub, or contracted services such as professional writing or graphic arts, online sales through Amazon or other marketplaces, or even services dog walking and house sitting are taxable. (Other examples: jobs based on apps like Instacart and DoorDash, as well as handyman, lawn care, independent contractors.)

While nearly all income from a “side job” is taxable, just like regular employment, one big difference is that a traditional employer is required to proactively withhold the amount of tax they are deemed that a taxpayer will likely owe at the end of the year. With a job in the gig economy, these taxes are rarely withheld, which means that taxpayers, often regular workers with limited incomes, are responsible for withholding some of this income to pay their taxes at the end of the year. year.

  • Be careful: Hire a CPA or Enrolled Agent (EA) to do your taxes.

How much tax will you owe on your secondary income?

This depends on your other income and source deductions, as well as any tax credits and deductions you may be entitled to. While there’s no easy answer, workers with incomes below $50,000 should expect to owe 20-30% of their secondary income in taxes, which will be due by April 15. next year (sometimes as late as April 18 due to weekends or holidays). You can file an extension, but that only extends the time you have to file all of your returns; the money you owe is due on the original IRS deadline each year. It’s important to keep receipts for expenses you have to pay when providing your service/business (car maintenance, miles, supplies, etc.) because these business expenses reduce your net income, which reduces the taxes you pay. will have to.

Estimated penalties and taxes

In many cases, even that might not be enough. If a taxpayer ends up owing more than $1,000 when filing the tax return, the IRS considers this to be intentionally under withholding and may add a penalty. To avoid this, taxpayers who earn income that does not have taxes withheld must pay the IRS an estimate of what their taxes will be, in quarterly installments, based on the previous year’s income (a few exceptions).

Self-employment taxes

And don’t forget Social Security and Medicare. Traditional jobs also withhold taxes for these two items from paychecks. Part of this amount comes from the worker’s salary and part is a matching amount paid by the employer. Gig workers (self-employed and contractors) must pay not only the employee’s share of social security and health insurance contributions, but also the employer’s share. This self-employment tax is 15.3% of your net gig income (12.4% for Social Security and 2.9% for Medicare).

Will the IRS know if you don’t report your income?

That’s the question everyone wants to ask, but tax professionals don’t want to answer it for ethical or liability reasons. I can answer that, to some extent, since I am not a tax professional, but have worked with and with tax professionals for over 20 years.

The short answer is if you work or contract with a company that pays taxes, then YES, the IRS will probably find out pretty quickly if you don’t report your ancillary income. This is because the business paying you (whether it’s an app-based business like food delivery or a traditional business where you provide contract work) is going to deduct the amount they paid you as an expense for their business. To do this, they will likely issue you a Form 1099-NEC or another Form 1099 – and a copy will be sent to the IRS. Even if you do not receive such a form at the end of the year, it is safe to assume that they have reported or will report that they paid you to the IRS. These companies are also legally required to report payments of at least $600 per year to anyone for contract work.

For workers who have earned income in less organized activities, such as those who have worked directly with clients where there is no paper trail (no business app or third-party business partner), or those who have been paid cash for their work, it is more difficult for the IRS to know about the income transaction. This does not mean that there is no obligation to declare the income. Intentionally failing to report taxable income is illegal. If the IRS has a reason to look at your taxes in future years, or the taxes of those who paid you, the agency could uncover your omissions. In this case, taxpayers may possibly face a criminal conviction for failure to report income, and the taxpayer would most likely have to repay taxes, penalties, and interest on any failure. Penalties for negligence may also be imposed. It is also possible that government benefits may be garnished until payment is made.

What the IRS says:

“Generally, income from the gig economy is taxable and must be reported to the IRS. The gig economy is an activity where people earn income by providing labor, services, or goods on demand Often this is through a digital platform like an app or website Taxpayers must report income from the on-demand economy on a tax return, even if the income is:

    • Part-time, temporary or extra work,
    • Not reported on an information reporting form – such as a Form 1099-K, 1099-MISC, W-2, or other income statement or
    • Paid in any form, including cash, goods, goods or virtual currency.”

Visit the IRS Gig Economy Tax Center: https://www.irs.gov/businesses/gig-economy-tax-center

-====-

Do you have a question about taxes? Request it below (free registration required to comment.)

]]>
NMMC expects to achieve property tax collection target of Rs 600-cr for 2021-2022 https://eshcinsel.net/nmmc-expects-to-achieve-property-tax-collection-target-of-rs-600-cr-for-2021-2022/ Tue, 01 Mar 2022 17:17:26 +0000 https://eshcinsel.net/nmmc-expects-to-achieve-property-tax-collection-target-of-rs-600-cr-for-2021-2022/ The Navi Mumbai Municipal Corporation (NMMC) expects to meet its 2021-22 property tax collection target of Rs 600 crore. By the end of November 2021, the civic body had already raised Rs 295.14 crore. Officials said this was a conservative estimate as many citizens were unable to pay taxes due to loss of income in […]]]>

The Navi Mumbai Municipal Corporation (NMMC) expects to meet its 2021-22 property tax collection target of Rs 600 crore. By the end of November 2021, the civic body had already raised Rs 295.14 crore. Officials said this was a conservative estimate as many citizens were unable to pay taxes due to loss of income in the previous fiscal year due to the pandemic situation. .

A senior municipal official said that NMMC is running the Abhay Yojana to waive interest on late payments which will increase their tax collection. He added that the civic body raised Rs 159 crore under the program in the previous financial year.

Under the NMMC, there are 3,25,179 property tax holders, of which 2,60,932 are residential, 58,611 non-residential and 5,636 units are industrial. “The majority of taxes come from industrial units and they are paid at the end of the fiscal year,” the official said.

Despite the Covid-19 outbreak, the civic body had managed to collect over Rs 540 crore as property tax in 2020-21. The collection fell short of the budget estimate of Rs 630 crore.

(To receive our daily E-paper on WhatsApp, please Click here. We allow the PDF of the document to be shared on WhatsApp and other social media platforms.)

Posted: Tuesday, March 1, 2022, 10:47 p.m. IST

]]>
Durham ‘tax-free’ church faces potential seizure of huge property tax bill https://eshcinsel.net/durham-tax-free-church-faces-potential-seizure-of-huge-property-tax-bill/ Thu, 24 Feb 2022 04:31:29 +0000 https://eshcinsel.net/durham-tax-free-church-faces-potential-seizure-of-huge-property-tax-bill/ DURHAM, NC (WTVD) — Reverend Johannes Gumbo insists he would much rather preach the scriptures than preach property taxes. “I’m here to preach, not to fight for buildings,” Gumbo said. “It’s just crazy.” But on Wednesday night, Gumbo and his congregation of largely African immigrants in east Durham find themselves in a high-stakes battle with […]]]>
DURHAM, NC (WTVD) — Reverend Johannes Gumbo insists he would much rather preach the scriptures than preach property taxes.

“I’m here to preach, not to fight for buildings,” Gumbo said. “It’s just crazy.”

But on Wednesday night, Gumbo and his congregation of largely African immigrants in east Durham find themselves in a high-stakes battle with the County Durham tax collector.

“Our tax bill is around $87,000,” he said. “No, we don’t have that.”

The church shouldn’t need it. The church does not generate any income. It is a religious entity, exempt from taxes.

Shepherd’s House has worshiped in the sprawling building at the corner of Main and Driver streets since the mid-2000s. It was gifted the property in 2008 by the previous congregation. About four years ago, Gumbo members officially purchased the building, which triggered a trigger at the tax office.

“After a year, 2019, we received a letter asking us to pay taxes, around $30,000,” Gumbo recalls. He said they immediately began trying to contact the Durham County Tax Office.

But when ABC11 contacted the tax division, there was a different story.

“Shepherd’s House received at least two separate notices of the need to file the tax exemption form. And either they didn’t understand or they weren’t given the proper guidance,” said Brian Wardell of the county attorney.

However, church attorney Jamie Paulen argues that after the pandemic took hold, communication with the tax office became nearly impossible.

“These church people are lay people, so they don’t understand that this act prompted the IRS to look into this nonprofit designation. They couldn’t find anyone to answer their calls,” Paulen said.

Gumbo added, “There was no one to answer us. You write a letter, you call, nothing.”

With Shepherd’s House unable to pay, the county is now referring the case to foreclosure proceedings.

In the basement of the church, some of the local organizations that rely on this church as a community space are now caught in the crossfire. Including the women of Feed My Sheep, the pantry that feeds needy families two Saturdays a month.

“People come to feed their souls. And we help feed their stomachs,” said volunteer Rose Greene.

Helen Taylor, another Feed My Sheep volunteer, added: “I don’t think they should close the church or sell the church because the church is really about serving the community.”

The county told ABC11 that state law prevents the tax office from granting the church a retroactive tax exemption so long after taxes were due.

The case will likely end in an appeal to the North Carolina Property Tax Commission.

Meanwhile, the community rallies around Shepherd’s House. Groups like Feed My Sheep, which depend on this space, are hosting a virtual meeting on Thursday evening to raise awareness and help the church fight back.

Copyright © 2022 WTVD-TV. All rights reserved.

]]>
Income tax exemption long stay visa https://eshcinsel.net/income-tax-exemption-long-stay-visa/ Tue, 22 Feb 2022 12:08:00 +0000 https://eshcinsel.net/income-tax-exemption-long-stay-visa/ A man walks past a billboard on Sukhumvit Road, Bangkok. (File Photo: Bangkok Post) The cabinet approved personal income tax exemption for three groups of foreign taxpayers: high earners, retirees and those who wish to work remotely from Thailand, Finance Minister Arkhom Termpittayapaisith said. Mr Arkhom said on Tuesday that recipients would be considered investors […]]]>

A man walks past a billboard on Sukhumvit Road, Bangkok. (File Photo: Bangkok Post)

The cabinet approved personal income tax exemption for three groups of foreign taxpayers: high earners, retirees and those who wish to work remotely from Thailand, Finance Minister Arkhom Termpittayapaisith said.

Mr Arkhom said on Tuesday that recipients would be considered investors in Thailand, as required by the government by offering them long-term residency (LTR) visas.

The first group must invest at least 500,000 US dollars (16.35 million baht) in government bonds, real estate or otherwise in the form of foreign direct investment. They must have amassed at least $80,000 in income over the past two years and have $1 million in assets.

Foreign retirees must be at least 50 years old, have an annual income of $40,000 or more, and invest $250,000 in government bonds or real estate.

Professionals interested in working remotely from Thailand must demonstrate that they have an annual income of at least $40,000, a master’s degree or higher or intellectual property rights, and five years of experience in a research field.

However, a fourth visa-eligible group would be taxed.

Digital Services Experts must work for SET-listed companies or have worked for at least three years in private companies that generate revenues of $50 million per year or more.

This group is considered highly skilled professionals. They are required to work in targeted industries or as academic experts in universities or state agencies.

“However, if [the last group] earns income once in Thailand, they are liable to pay personal income tax at the normal rate,” Mr Arkhom said.

Traisulee Traisoranakul, deputy government spokesperson, said the finance ministry had signaled to the cabinet that the government would not lose any revenue from the plan as the three groups pay no taxes here at present.

However, the government stands to gain by levying a 17% personal income tax on certain highly skilled professionals, she said.

Arkhom said the economic stimulus and investment measures will help attract high-potential foreigners to Thailand. Wealthy foreigners and experts will be encouraged to work in the country.

“(High-potential foreigners) will help broaden the personal income tax base, stimulate domestic consumption and investment, and improve the country’s competitiveness, which will contribute to economic growth. It It is expected that one million foreigners will stay in Thailand,” the finance minister said. .

The Home Office proposals provide for LTR visas for up to four family members, including children up to 20 years old.

Visas will be valid for five years and renewable for up to five years, with a final cap of 10 years. Visa holders will have to pay an annual fee of 10,000 baht and declare their residential address once a year.

After receiving the visa, foreigners can apply for a work permit.

The National Economic and Social Development Council (NESDC) predicts the policy will attract one million arrivals in five years, generating 1 trillion baht in revenue.

]]>
Booming economy leads SC Governor House to propose bigger income tax cut https://eshcinsel.net/booming-economy-leads-sc-governor-house-to-propose-bigger-income-tax-cut/ Wed, 16 Feb 2022 11:00:00 +0000 https://eshcinsel.net/booming-economy-leads-sc-governor-house-to-propose-bigger-income-tax-cut/ By JEFFREY COLLINS The Associated Press COLOMBIA – Another round of better-than-expected economic news from South Carolina led the Republican governor and House leaders to agree on Tuesday to work toward a bigger income tax cut than they initially had offers. The proposal would cost $600 million next budget year and cut income taxes for […]]]>

By JEFFREY COLLINS
The Associated Press

COLOMBIA – Another round of better-than-expected economic news from South Carolina led the Republican governor and House leaders to agree on Tuesday to work toward a bigger income tax cut than they initially had offers.

The proposal would cost $600 million next budget year and cut income taxes for all but about 120,000 of the 1.5 million people and couples who pay taxes.

“We’re in a unique situation this year. We have the opportunity to provide tax relief to every South Carolina while maintaining the economic success we’ve had in the past,” House Speaker Jay Lucas said. , a Republican from Hartsville.

Two dozen House Republicans crowded into the governor’s office on Tuesday about an hour after state economists reported South Carolina was continuing to grow at an unprecedented rate, raising their estimates of how much the The state is expected to collect more than $600 million in taxes and other recurring funds for the budget year that begins in July.

That kind of growth won’t last forever — it’s sales and corporate taxes spurred by federal stimulus and COVID-19 relief funds, the office’s executive director said. Revenue and State Fiscal Affairs, Frank Rainwater.



But there’s no doubt the state is also growing outside of federal money with higher wages raising income taxes, Rainwater said at an agency meeting Tuesday.

“Federal money helped,” the governor said an hour later. “But the conservative policies we had in this state are what allowed that to happen.”

No senator was at the governor’s press conference, but Senate Finance Chairman Harvey Peeler later said in a statement that he looked forward to working with McMaster and the House on a tax cut.

“There is no doubt that the time has come for a meaningful tax reduction for our citizens. Projected revenues ensure that we can both fund government operations and ease the burden on our people,” the senator said. Gaffney Republican.

The proposal would cut the state’s highest tax bracket – which 1.1 million of the 2.6 million eligible people pay – from 7% to 6.5% immediately, with plans to continue to reduce it to 6% soon, said House Ways and Means chairman Murrell Smith. , a Sumter Republican.

The 6%, 5% and 4% tax brackets – or 292,000 taxpayers combined – would all be reduced to 3%. About 1 million taxpayers pay no income tax in South Carolina.

Many Republicans have been pushing for tax cuts for years, but have faced opposition from lawmakers who remember the Great Recession and the painful cuts that came when the recession left the state scrambling. to balance its budget.

Others have suggested that the complex system of property tax caps, sales tax exemptions and other lengthy state rules needs a complete overhaul and that the extra money in the budget provides the opportunity ideal to take the time to tear down and rebuild the entire system.



McMaster said there will be time for that later. “Don’t let the perfect be the enemy of the good,” the governor said.

It was almost all good news from the Council of Economic Advisers.

The General Assembly-controlled state budget for the 2022-23 fiscal year is expected to be around $11.5 billion. At the end of the Great Recession less than 15 years ago, the Legislative Assembly had only $5.5 billion to spend.

Lawmakers will have $4.6 billion in additional revenue to figure out how to handle this session, the Council of Economic Advisers predicted.

But there was a word of warning. The board said economists could not determine when the expected economic slowdown will occur as federal stimulus funds dwindle.

]]>
What to choose in 2022? https://eshcinsel.net/what-to-choose-in-2022/ Sun, 13 Feb 2022 01:38:42 +0000 https://eshcinsel.net/what-to-choose-in-2022/ How to choose between the new and the old tax system? The new tax system differs from the old one in two respects. First, it has more slabs with lower tax rates. And second, all major exemptions and deductions available to taxpayers under the existing old tax system are disallowed if the new tax system […]]]>

How to choose between the new and the old tax system?

The new tax system differs from the old one in two respects. First, it has more slabs with lower tax rates. And second, all major exemptions and deductions available to taxpayers under the existing old tax system are disallowed if the new tax system is elected. “Therefore, if the benefit of lower rates in the new tax regime exceeds the benefit of exemptions and deductions available under the old tax regime, then the taxpayer can choose the new tax regime,” said Archit Gupta, Founder and CEO of Clear.

The main difference between the old and the new tax regime is the difference in slab rates. Taxpayers in India have to pay income tax based on the slab system under which they fall. The tax slab is designed by considering the average income of individuals. Thus, taxpayers with higher incomes will be likely to pay more taxes.

The possibility of reducing the tax is also an important difference between the old and the new tax system. No deductions are allowed under the new tax system, but a taxpayer has many options under the old tax system.

“While the new tax system provides the taxpayer with zero deduction or exemption options, the old tax system provides about 70 deductions and exemptions to reduce their taxable income. The deductions allow taxpayers to reduce the amount of tax by saving, investing or spending on specific items,” said Amit Gupta, MD, SAG Infotech.

Which tax regime is the best?

Archit Gupta, Founder and CEO – Clear said that in order to know which tax regime is best, the taxpayer must calculate the income tax to be paid at the applicable normal tax rates, i.e. at the old rates tax slab, after taking advantage of all eligible exemptions and deductions from their income. For example, salaried persons can claim exemption for LTA, HRA, standard deduction of 50,000. In addition, individuals are permitted to claim a deduction under Section 80C up to 1.5 lakh, home loan interest deduction, NPS contribution, etc.

In addition, the taxpayer must calculate the income tax to be paid according to the rates of the tax slab of the new tax regime. Now they can compare and choose the tax regime that suits them best, he added.

Choosing an old or new tax regime is entirely up to you and will depend on your income structure, available deductions and circumstances.

“If you want to choose the new tax system, you will have to forget all the tax deductions and exemptions that the old tax system provides,” said Amit Gupta,

Who should opt for the new and who should opt for the old?

The choice between tax regimes may depend on various factors such as current income level, income composition i.e. sources of income, investment appetite and savings habits, among other factors. Individuals will need to determine their tax liability under the old and new tax regimes before deciding which is more advantageous.

“The Income Tax Department has also developed an easy-to-use calculator that shows which scheme would benefit based on tax output. While deciding to choose between the old and the new tax regime, one should consider the pros and cons of both regimes in order to make a wise decision,” said Akash Kumar, Director and Co-founder of Fincorpit Consulting Private limited.

The decision to opt for a new tax regime or an old tax regime depends on the taxpayer.

“We have observed that most taxpayers benefit from the old regime when they maximize Section 80C and opt for the tax deductions and benefits available in their salary structure, such as applying for HRA, receiving part from the CTC in the form of reimbursement, etc. Only 10% of the total of the filers on Cleartax benefited from the old regime and opted for this one,” said Archit Gupta.

We also observe that the younger population, which has few tax investments, opts for the new tax system.

“Many taxpayers are opting for the new regime because they want to avoid locking in funds under Section 80C investments, which has a lock-in period. These taxpayers are choosing to invest in FDs rather than locking their assets into tax-saving options for 3-5 years,” said Amit Gupta.

Is it allowed to switch several times between the old and the new tax regime?

If you are an individual employee, you can make this choice each year. “People with income under ‘Salary’, ‘Home ownership’, ‘Capital gains’ and ‘Other sources’ can choose each year to switch between the old or the new tax regime. But people who have business or professional income have only one chance to return to the old regime after opting for the new tax regime. They can only choose the new tax regime once in their lifetime,” explained Archit Gupta.

To subscribe to Mint Bulletins

* Enter a valid email address

* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our app now!!

]]>
Guest Opinion: State Income Tax Cut: Win or Loss for Utah’s Middle Class? | News, Sports, Jobs https://eshcinsel.net/guest-opinion-state-income-tax-cut-win-or-loss-for-utahs-middle-class-news-sports-jobs/ Sat, 12 Feb 2022 20:03:05 +0000 https://eshcinsel.net/guest-opinion-state-income-tax-cut-win-or-loss-for-utahs-middle-class-news-sports-jobs/ Courtesy picture Matthew Weinstein The Utah Legislature just passed halfway through its 2022 session and just passed a reduction in the state income tax rate from 4.95% to 4.85%. The legislative tax analyst says that means $164 million less in the state education fund and another $164 million in the pockets of […]]]>

Courtesy picture

Matthew Weinstein

The Utah Legislature just passed halfway through its 2022 session and just passed a reduction in the state income tax rate from 4.95% to 4.85%. The legislative tax analyst says that means $164 million less in the state education fund and another $164 million in the pockets of Utahns. The sponsors of the bill have publicly said that, for a family of four with a median income in Utah of $72,000 per year, that would mean about $98 per year.

Have you ever wondered how it is possible that a tax rate cut that only gives middle-class families $98 could deprive our schools of $164 million in revenue? Maybe you’ve done the math: $98 multiplied by about 1 million households is much less than $164 million. And it seems even stranger when you consider that families below the median income would get much less from this tax cut. Not only that, but most one-fifth of Utahns with the lowest incomes — those earning less than about $30,000 a year — are completely sheltered from income tax. (However, they pay other taxes, such as gas, sales and property taxes, which is approximately 7.5% of their meager earningswhich is actually a higher effective tax rate than that paid by the highest income Utahns.) So how is it possible that an income tax cut that lower income Utahns won’t see not and which will bring only $98 a year to middle-income families may end up costing Utah’s education fund a grand total of $164 million?

The answer lies in what can sometimes seem like the magic math of income tax.

The most magical part of income tax can be described as what I call the three-fifths/one-fifths rule. Three-fifths of Utah’s income tax is paid by the wealthiest one-fifth of households, those earning more than $135,000 a year. (And four-fifths is paid by the wealthiest two-fifths, those earning more than about $85,000.)

Is it unfair to high-income Utahns to be asked to pay the majority of income tax? In fact, they don’t, as they earn the majority of all income in Utah. According to Data from the Utah State Tax Commission, the same three-fifths/one-fifth rule applies to Utah income as it does to income tax. In other words, the wealthiest fifth of Utah households earns about three-fifths of all income in Utah. So we can see that income tax is the only tax in the Utah tax system that actually matches Utah income. In fact, it’s the only non-regressive tax we have. All other taxes—property tax, sales tax, gas tax—are regressive taxes. This means that when we lower the income tax rate, not only are we giving a huge windfall to families who need it the least, but we are also making our overall tax system more regressive instead of lowering it.

That means the income tax rate cut that barely helps the median-income family with that extra $98 a year actually gives the wealthiest Utahns thousands of dollars a year break. In fact, one-fifth of the tax cut goes to about 1% of households earning more than half a million dollars a year, giving them each an average tax break of $1,500 – and more. for millionaires and more.

But it’s getting worse. This average middle-class family with two kids in school is actually losing a lot more than that $98. When you divide the $164 million price tag by Utah’s K-12 student population of about 675,000, and then multiply by two kids in school, that average family earning $98 in tax relief are giving up $485 that is no longer going to be spent on their children’s education each year. Not going to be spent on smaller class sizes or more experienced teachers or more up-to-date technology. It will not be spent on closing the gaps in our education system between majority and minority groups and between haves and have-nots, gaps that are greater than nationally.

Ouch.

Because that’s the magic of income tax. Middle-class families pay a modest amount and get back many times more. This is a very good return on investment. It’s also a great investment in Utah’s future. Unfortunately, for middle-class Utah families, this year’s income tax rate reduction will mean a lower return on investment and less investment in Utah’s future.

Matthew Weinstein is director of tax policy at Voices for Utah Children, which has worked since 1985 to make Utah a state where all children thrive.



Newsletter

Join thousands of people who already receive our daily newsletter.






]]>