Income Tax News

Gov. Green Extends Family Tax Credit, Signs $37.2B Fiscal Biennium Operating Budget. PC: Office of the Governor (6.30.23)

Governor Josh Green, M.D., on Friday signed legislation to provide “sweeping income support” to Hawaiʻi’s working families, and to fund state operations for the coming fiscal biennium.

HB954 (Act 163) gives $104 million of income support to local taxpayers, “many of whom will receive tax refunds worth thousands of dollars that will flow back into their household budgets to help make ends meet,” according to the governor’s announcement.

The bill doubles the size of the Earned Income Tax Credit for five years, providing $50 million in additional support. The bill also doubles the amount of the Food Excise Tax Credit, benefitting an additional 90,000 of the most economically vulnerable residents in the state, according to the governor. “Working families who struggle to pay for child or dependent care will receive a refundable credit of up to $3,000 to help ease the high costs of living they face every day,” according to state officials.

“The people of Hawaiʻi honored me with this position in the hope that my administration would make their lives better. It is a top priority of mine, and it is thanks to the collaboration between my Administration and legislative leaders that our families will receive this relief,” said Governor Green said in a news release.

ARTICLE CONTINUES BELOW ADARTICLE CONTINUES BELOW AD

“The budget and tax bills truly represent cooperation between the Administration, 76 legislators, and the general public,” said House Speaker Scott Saiki (District 25, Ala Moana Kakaʻako, Downtown). “They will deliver direct relief to over 200,000 families, our statewide parks and trails, our climate, and unsheltered individuals in need of mental health assistance.”

Senator Donovan Dela Cruz, chair of the Senate Ways and Means Committee, hailed the tax break bill as a positive financial benefit for struggling families.

“HB954 is a positive step towards addressing the financial challenges faced by the ALICE (Asset Limited, Income-Constrained, Employed) population in Hawaiʻi,” said Senator Dela Cruz (District 17, portion of Mililani, Mililani Mauka, portion of Waipi‘o Acres, Launani Valley, Wahiawā, Whitmore Village). “By increasing the tax credits for household and dependent care services, refundable income, and income threshold and credit amounts for refundable food and excise tax, HB954 aims to provide much-needed support to working families.”

Hawaiʻi Community Foundation CEO Micah Kāne said he believes the multi-faceted approach to relief for ALICE families will have a long-lasting impact.

ARTICLE CONTINUES BELOW AD

“It was important for the Governor and the legislature to allocate resources for immediate relief for the families that addresses major cost-drivers, like early learning and affordable housing,” Kāne said. “You can’t really do one without the other; you have to do both. I think the Governor’s investment in affordable housing and continued commitment to early learning will reduce the ALICE numbers in the long run,” Kāne said.

Governor Green today also signed HB300 (Act 164), the state budget for the fiscal biennium. 

The budget appropriates

• $10.7 billion in FY24 and $9.8 billion in FY25 for general funds; 
• $19 billion in FY24 and $18.2 billion in FY25 for Executive Branch departments and agencies for the operating budget.
• The budget also appropriates $2.9 billion in FY24 and $1.3 billion in FY25 for capital improvement projects. 

Governor Green on Thursday provided official notice to lawmakers, finalizing line-item reductions and vetoes.

ARTICLE CONTINUES BELOW AD

“When we received the Council on Revenues’ lowered revenue projections, it was clear that we had to right-fit the budget to align with the priorities of our Administration and legislature  ̶  housing, homelessness, health care services, education and the environment,” Governor Green said, noting that a balanced state budget is required by law.

“With the signing of HB300, the state budget bill, we can expect that the resources provided within it, coupled with the shared commitment of the legislature and the Governor, will allow for considerable progress to be made in addressing Hawaiʻi’s greatest challenges,” Senator Dela Cruz said. “Millions of dollars have been put forth to tackle homelessness, the housing crisis, mental health, and workforce shortages, to name a few.”

HB954 HD2 SD2 CD1, Relating to Taxation (Act 163): Increases the household and dependent care services tax credit for five years. Increases the refundable earned income tax credit for five years. Increases the income thresholds and credit amounts of the refundable food/excise tax credit for five years. (CD1) 

HB300 HD1 SD1 CD1, Relating to the State Budget (Act 164): Appropriates funds for the operating and capital improvement budget of the Executive Branch for fiscal years 2023-2024 and 2024-2025. (CD1) 

Originally Appeared Here

By Emily Goodin, Senior U.S. Political Reporter

01:39 29 Jun 2023, updated 02:03 29 Jun 2023

• IRS whistleblower Gary Shapley claimed Trump-appointed attorney Gary Weiss said he was not in charge of deciding if Hunter faced charges
• Said decision was made in DC by U.S. Attorney Matthew Graves, who was appointed by President Joe Biden
• AG Merrick Garland claims Weiss had authority on making charging decisions

An IRS whistleblower claimed Wednesday night Trump-appointed US attorney David Weiss told him he was not in charge of deciding whether or not Hunter Biden faced federal charges – and that a Joe Biden-appointed attorney made the call.

Gary Shapley, in an interview with Fox News, described an October 7, 2022, meeting with top IRS and FBI officials on the investigation into President Joe Biden’s son.

‘I was there, and I witnessed this personally,’ Shapley said, noting Weiss started by saying ‘he’s not the deciding person whether or not charges are filed or not.’

Shapley claimed the final decision was made by officials in Washington DC. He noted Weiss meet with the Matthew Graves, the US Attorney for the District of Columbia, who was appointed by President Joe Biden, in March 2022.

‘After that occurred, he was no longer looking to charge,’ Shapley said.

IRS whistleblower Gary Shapley claimed Trump-appointed US attorney David Weiss told him he was not in charge of deciding whether or not Hunter Biden faced federal charges – and that a Joe Biden-appointed attorney made the call

‘So that’s earth-shattering news,’ Fox News’ Bret Baier said. ‘It’s a Biden-appointed D.C. U.S. attorney, Matthew Graves, would not allow him to charge in his district?’

‘I didn’t learn that fact until October 7 of 2022, so looking back to March of 2022. And that’s when David Weiss, in October 7, 2022, said that the D.C. U.S. attorney’s office will not allow us to charge there,’ Shapley responded.

Shapley, who worked for the agency for 14 years, helped oversee the investigation into the president’s son. He is raising questions over alleged special treatment throughout the probe and how the charging decisions were made.

Shapley noted Weiss said he had requested special counsel authority and was denied. 

‘I even had him repeat that, because I knew how important that fact was, and I wanted to make sure I understood it,’ he noted.

Shapley said he even documented the details of the meeting in an email and noted that email was in the hands of House investigators.

The House Ways and Means Committee last week released testimony from two IRS whistleblowers who alleged officials at the Justice Department, the FBI, and the IRS interfered with Weiss’ investigation. 

Matthew Graves, the US Attorney for the District of Columbia, who was appointed by President Joe Biden

Shapley was one of those two whistleblowers. 

In response to the release of that information, Attorney General Merrick Garland denied interfering in the Hunter Biden probe. 

‘I don’t know how it would be possible for anybody to block him from bringing a prosecution,’ Garland said last week of Weiss.

The defense came a day after Shapley’s stunning allegations about the case were unsealed by House Republicans, and after both Hunter Biden and the AG were guests at a White House State Dinner. 

Asked about any directive not to bring charges against Hunter in 2022, Garland responded: ‘As I said at the outset, Mr. Weiss was appointed by President Trump as the U.S. attorney in Delaware and assigned this matter during the previous administration.’ 

Garland said Weiss ‘would be permitted to continue his investigation and to make a decision to prosecute any way in which he wanted to and in any district in which he wanted to. Mr. Weiss has since sent a letter to the House Judiciary confirming he had that authority. 

‘I don’t know how it would be possible for anybody to block him from bringing a prosecution, given that he has this authority,’ he said.

He claimed Weiss never asked to be appointed special prosecutor.

‘Mr. Weiss had, in fact, more authority than a special counsel would have.’ 

‘He was given complete authority to make all decisions on his own,’ he noted.

‘Some have chosen to attack the integrity of the Justice Department by claiming that we do not treat cases alike. This constitutes an attack on an institution that is essential to American democracy,’ Garland said.

President Joe Biden, son Hunter Biden and grandson Beau Biden Jr. arrive at Fort Lesley J. McNair on Sunday after spending the weekend at Camp David ‘I don’t know how it would be possible for anybody to block him from bringing a prosecution,’ Attorney General Merrick Garland said of US Attorney for Delaware David Weiss The testimony from an IRS whistleblower revealed that U.S. Attorney David Weiss – the Trump-era holdover who prosecuted the case against Hunter Biden – allegedly asked for special counsel status and was denied by the Department of Justice

Hunter Biden, in his plea deal with the US government, agreed to plead guilty to two counts of failing to pay timely tax payments on $1.5 million in income. Weiss announced that agreement along and noted he charged Hunter in connection with his purchase of a handgun in 2018 but said he would not prosecute the charge under a two-year pretrial diversion program.

Republicans are investigating Garland’s role in the case and whether or not Weiss truly had the authority to make charging decisions. 

‘If it comes true what the I.R.S. whistle-blower is saying, we’re going to start impeachment inquiries on the attorney general,’ Speaker Kevin McCarthy told Fox News. 

President Joe Biden has said repeatedly he had nothing to do with Hunter’s business dealings and the White House has emphasized they are staying out of any Justice Department investigations.  

Shapley also told CBS News on Tuesday that he was repeatedly prevented from taking the necessary – and routine – steps when it came to Hunter’s case.

He said conduct uncovered during the five-year investigation could have implicated President Joe Biden as well, and resulted in additional charges.

And he claimed the road blocks were happening even during the Trump years.

‘There were certain investigative steps that we weren’t allowed to take that could have led us to President Biden,’ Shapley said, adding that his team at the IRS ‘needed to take [those steps] and we weren’t allowed to take them.’

IRS whistleblower Gary Shapley (pictured) told CBS News that Hunter Biden did receive special treatment ¿ and said he was prevented from taking the routine steps during the investigation into the president’s son

In their congressional interviews, both Shapley and the other agent questioned whether the U.S. attorney overseeing Hunter’s case was even able to bring charges he saw fit.

Weiss said in a letter to the House Judiciary Committee weeks ago that he was granted ‘ultimate authority over this matter, including responsibility for deciding where, when, and whether to file charges.’

Originally Appeared Here

It’s almost tax time but there’s some bad news for Australians hoping to get a big return this July.

Will my tax return be less in 2023?

The Low to Middle Income Tax Offset, which expired on June 30, 2022, previously saw Aussies who earned up to $126,000 per year receive an offset in their tax return, as shown below. But with the offset no longer available, taxpayers who once received it could now be seeing their tax refunds cut by up to $1500.

How the LMITO worked:

Taxable income of $37,000 or less: $675 offset

Taxable income of $37,001 to $48,000: $675 offset plus 7.5 cents for every dollar above $37,000, up to a maximum of $1,500

Taxable income of $48,001 to $90,000: $1,500 offset

Taxable income of $90,001 to $126,000: $1,500 offset minus 3 cents for every dollar above $90,000

Founder of financial advice app Otivo, Paul Feeney said that “ultimately, more people will find they have less tax returns resulting from the offsets and so forth that the government had in place”.

Ex-financial advisor and founder of Otivo, Paul Feeney. Picture: Supplied.

How to get as much tax back as possible:

Mr Feeney advised that while there are “many things that people can deduct, there’s a fine line between what you can and can’t”.

He recommended using the ATO’s Deductions You Can Claim web page, to be sure that what you are deducting is acceptable, from education related to your job, to the cost of your tax agent.

What will the ATO be looking for in my tax return?

Accountant Coco Hou said work related expense claims, rental property deductions and cryptocurrency transactions are the ATO’s focus this year.

“(The ATO) are particularly focused on excessive or unsubstantiated claims, such as personal expenses disguised as work related expenses. And so it is very, very important for taxpayers to keep accurate records and only claim the legitimate expenses directly related to their employment.”

Leading tax agent Coco Hou says there are three main ATO crackdowns to watch for this year. Picture: Supplied.

Ms Hou pointed out that with the 2022 floods in parts of Australia, things can “get tricky” with rental property deductions.

“A lot of taxpayers need to repair their rental properties … (But the ATO) are targeting the areas of excessive interest deductions, and incorrect apportionment of expenses, especially the repair and maintenance expenses.

“So say for example, if the roof got blown away, you put the roof back on and it could be the deductible but if you say, ‘hey, I want to change a whole new roof’, that’s not deductible, you have to capitalise it and claim depreciation over it.”

Landlords should beware of deducting their rental property claims correctly, Ms Hou warns. Picture: iStock.

The accountant adds that for the third area of focus, cryptocurrency, taxpayers should be very “careful”.

“When it comes to buying, selling and exchanging a cryptocurrency, the capital gain and loss need to be tracked properly.”

What about the HECS/HELP debt indexation?

With the increased HECS/HELP debt indexing having come into effect on 1 June, 2023, many Aussies with student debt have been considering making voluntary repayments to pay off their debt quicker.

While Ms Hou recommended paying down your debt “as early as possible” if cash flow allows, financial advisor Mr Feeney said he believes “it’s a lot to start paying off (HECS debt) quickly.”

“Some people who have got the cash and don’t need it for other goals, they should look at paying that down.

Aussies with student loans like HECS and FEE HELP will now be owing more, thanks to increased indexing. Picture: iStock.

“But my general advice … is to continue to pay it back through pre-tax dollars through the government. Because otherwise, you’re paying it off with post-tax dollars.

“And I’ve no doubt with the financial living costs and the pressures that people have right now, keeping that money for themselves as a buffer instead of paying the HECS is probably a better thing to do.”

How do Australians spend their tax refunds?

Ms Hou said she “can definitely see the state of conservatism already come into the picture,” as even those taxpayers with cash on hand are spending less.

“Simply because they still worry that the interest rates might still go up. And they always prioritise their mortgage repayment, and things like a school tuition fee.

“They’ve cut down their overseas travelling budget … it’s gonna take some time for the public confidence to be restored.”

Best thing to do with your tax return in 2023

Mr Feeney urges taxpayers to be “proactive” and get their tax returns in early, so you can have “money back in your pocket quickly”

The quicker you do your tax return, the sooner there’s cash in your pocket for a “buffer”, says Mr Feeney. Picture: iStock.

“Once you do that … look at if you have any expensive debt, like credit cards and loans that are the 10 to 20 per cent interest rate. Try to pay them off or pay them down.

“And build up that safety buffer … If you’re someone with a mortgage, try and put that money into your offset account, because that’s going to really decrease the interest that people are going to experience.’

Originally Appeared Here

CNN
 — 

Two whistleblowers told Congress that IRS investigators recommended charging Hunter Biden with attempted tax evasion and other felonies, which are far more serious crimes than what the president’s son has agreed to plead guilty to, according to transcripts of their private interviews with lawmakers.

The IRS whistleblowers said the recommendation called for Hunter Biden to be charged with tax evasion and filing a false tax return – both felonies – for 2014, 2018 and 2019. The IRS also recommended that prosecutors charge him with failing to pay taxes on time, a misdemeanor, for 2015, 2016, 2017, 2018 and 2019, according to the transcripts, which were released Thursday by House Republicans.

It appears that this 11-count charging recommendation also had the backing of some Justice Department prosecutors, but not from more senior attorneys, according to documents that the whistleblowers provided to House investigators.

In a deal with prosecutors announced earlier this week, Hunter Biden is pleading guilty to just two tax misdemeanors.

The allegations come from Gary Shapley, a 14-year IRS veteran, who oversaw parts of the Hunter Biden criminal probe, and an unnamed IRS agent who was on the case nearly from its inception. Shapley approached Congress this year with information that he claimed showed political interference in the investigation. He and the entire IRS team were later removed from the probe.

“I am alleging, with evidence, that DOJ provided preferential treatment, slow-walked the investigation, did nothing to avoid obvious conflicts of interest in this investigation,” Shapley told lawmakers.

David Weiss, the Trump-appointed US attorney in Delaware who oversaw the Hunter Biden criminal probe, eventually reached a plea deal where the president’s son will plead guilty to two misdemeanors for failing to pay taxes on time. The plea agreement will also resolve a separate felony gun charge, if Hunter Biden abides by certain court-imposed conditions for a period of time.

Hunter Biden isn’t pleading guilty to any felonies, and he wasn’t charged with any tax felonies. CNN reported that prosecutors are expected to recommend no jail time. He is scheduled to appear in federal court in Delaware on July 26.

It isn’t uncommon for there to be internal disagreements among investigators over which charges to file against the target of an investigation, much like the disagreements that the IRS whistleblowers described. CNN reported last year that some FBI and IRS investigators were at odds with other Justice Department officials over the strength of the case, and that there were discussions over which types of charges were appropriate and whether further investigation was needed.

Sources familiar with the criminal probe told CNN in April that prosecutors were still actively weighing a felony tax charge against Hunter Biden. And it is common for prosecutors to strike deals with defendants where they plead guilty to a small subset of the possible charges they could’ve faced.

The Justice Department probe into Hunter Biden was opened in November 2018, and was codenamed “Sportsman.” According to Shapley’s testimony, federal investigators knew as early as June 2021 that there were potential venue-related issues with charging Hunter Biden in Delaware. Under federal law, charges must be brought in the jurisdiction where the alleged crimes occurred.

If the potential charges couldn’t be brought in Delaware, then Weiss would need help from his fellow US attorneys. He looked to Washington, DC, where some of Hunter Biden’s tax returns were prepared, and the Central District of California, which includes the Los Angeles area where Hunter Biden lives.

But Shapley told the committee that the US attorneys in both districts wouldn’t seek an indictment.

A second whistleblower, an IRS case agent who also testified to the committee but hasn’t been publicly identified, also told lawmakers that this is what happened. He agreed that Weiss was “was told no” when he tried to get the cooperation of the US attorneys in in DC and Los Angeles, who are Biden appointees.

Hunter Biden’s eventual plea agreement was filed in Weiss’ jurisdiction, in Delaware.

Shapley contends in his interview that Attorney General Merrick Garland was not truthful when he told Congress that Weiss had full authority on the investigation.

Shapley recounted a meeting on October 7, 2022, where, according to Shapley’s notes memorializing the meeting, Weiss said, “He is not the deciding person on whether charges are filed” against Hunter Biden. This undermines what Weiss and Garland have publicly said about Weiss’ independence on the matter.

Shapley also testified to committee investigators that it was during this October 2022 meeting that he learned for the first time that Weiss had requested to be named as a special counsel, but was denied.

In testimony to Congress in March, Garland said Weiss was advised “he is not to be denied anything he needs.”

Regarding the claims of political interference with the Hunter Biden criminal probe, Weiss told House Republicans in a recent letter that Garland granted him “ultimate authority over this matter, including responsibility for deciding where, when, and whether to file charges.”

After the transcripts were released Thursday, spokespeople for the US attorney’s offices in DC and Los Angeles issued near-identical statements reiterating that Weiss “was given full authority to bring charges in any jurisdiction he deemed appropriate.” The Justice Department echoed those comments in a statement saying Weiss “needs no further approval” to bring charges wherever he wants.

The whistleblowers also allege that at multiple key junctures, investigators were thwarted in their efforts because prosecutors were concerned about interfering in the 2020 presidential election.

In 2020, IRS investigators sought to conduct search warrants and take other overt steps. But according to Shapley, several weeks before the election, in September 2020, a Justice Department prosecutor questioned the optics of searching Hunter Biden’s residence and Joe Biden’s guest home.

Later that year, other planned searches were delayed because then-President Donald Trump was refusing to concede and was continuing to contest the results.

Republicans have slammed the plea agreement Hunter Biden struck as a “sweetheart deal,” and said it amounted to “a slap on the wrist.”

House Ways and Means Committee Chairman Jason Smith said earlier Thursday that the transcripts reveal “credible whistleblower testimony alleging misconduct and abuse” at the Justice Department that “resulted in preferential treatment for the president’s son.”

The Missouri Republican highlighted the whistleblowers’ allegations that the Justice Department “overstepped” in their efforts to intervene in the Hunter Biden criminal probe.

“The testimony … details a lack of US attorney independence, recurring unjustified delays, unusual actions outside the normal course of any investigation, a lack of transparency across the investigation and prosecution teams, and bullying and threats from the defense counsel,” Smith said.

Democrats on the committee said the transcripts were “a premature and incomplete record” of what happened with the Hunter Biden probe and accused the GOP of a “stunning abuse of power.”

Shapley, the IRS supervisor-turned-whistleblower, told House lawmakers that Justice Department prosecutors denied requests to look into messages allegedly from Hunter Biden where he used his father as leverage to pressure a Chinese company into paying him.

“I am sitting here with my father and we would like to understand why the commitment made has not been fulfilled,” according to a document Shapley gave to Congress, which quotes from texts that are allegedly from Hunter Biden to the CEO of a Chinese fund management company.

The message continues: “Tell the director that I would like to resolve this now before it gets out of hand. And now means tonight.” The message goes onto say, “I will make certain that between the man sitting next to me and every person he knows and my ability to forever hold a grudge that you will regret not following my direction. I am sitting here waiting for the call with my father.”

The second, unnamed IRS whistleblower also testified to lawmakers about this alleged WhatsApp message, saying prosecutors questioned whether they could be sure Hunter Biden was telling the truth that his father was actually in the room in the messages. The unnamed whistleblower testified that they did not know whether the FBI investigated the message.

Shapley told House investigators that a Justice Department attorney insisted that the FBI not ask directly about Joe Biden when doing interviews. But the FBI did manage to ask one key witness about Joe Biden, and Shapley said the witness told investigators that some suggestions of the president’s involvement were overstated.

An email sent among business partners of Hunter Biden said an equity stake should be held “for the big guy,” an apparent reference to Joe Biden, who was vice president at the time. But one of the associates told the FBI that it was probably just “wishful thinking or maybe he was just projecting” that Joe Biden would get involved if he did not run for president in 2016.

Joe Biden has repeatedly denied having any involvement in his son’s overseas business dealings, where he made millions of dollars from China, Ukraine and other countries. House Republicans have used their oversight probes to look for evidence that Joe Biden was actually involved.

This story has been updated with additional developments.

Originally Appeared Here

The due date for filing the Income Tax Return (ITR) is fast approaching and many salaried taxpayers are fretting over not receiving Form 16 from their employers.

Though employees expect to receive the form in their official email by June 15, some companies may take a day or two more considering how this form contains information about the tax deducted at source (TDS) by an employer on behalf of an employee.

In addition to TDS details, this form also includes a comprehensive summary of the salary paid to the employee by the employer.

Form 16 is indeed crucial for salaried individuals when filing their ITRs. It serves as a significant document as it provides detailed information about the salary paid to the employee, deductions claimed by the employee, and the tax deducted from the salary. This information is essential for accurately reporting income and claiming applicable tax benefits while filing the ITRs.

For the assessment year 2023-24, the due date for filing Income Tax Returns (ITR) is July 31. Before submitting your ITR, it is important to review the following key points in your Form 16:

Personal Details

Ensure that your personal information, such as your name, Permanent Account Number (PAN), and address, is correctly mentioned in Form 16.

This means that you must check if your name is correctly spelt and matches the name on your PAN card and other official documents. Apart, your PAN – a unique 10-digit alphanumeric identifier, is correctly mentioned in Form 16.

Any discrepancies could lead to issues during the filing process. Verify that your residential address is accurately stated in Form 16. This includes the correct house number, street name, locality, city, state, and PIN code.

Salary Details

Verify the salary details provided in Form 16, including the gross salary, allowances, perquisites, and any other income components. Cross-check these figures with your own records to ensure accuracy.

Confirm that the gross salary mentioned in Form 16 matches the salary credited to your bank account or as per your employment records. This includes your basic salary, allowances, and any other components. Also, the form must reflect details of the allowances you are entitled to such as House Rent Allowance (HRA), Travel Allowance, Medical Allowance, and others.

If you receive any perquisites or fringe benefits from your employer, ensure that these are accurately mentioned in Form 16. Common examples include rent-free accommodation, company car usage, or club memberships. Check if any other income components, such as bonuses, incentives, commissions, or any additional income sources, are properly accounted for in the form.

Deductions and Exemptions

Check if the deductions claimed by you, such as under Section 80C, Section 80D, and any other applicable sections, are correctly reflected in Form 16. Also, confirm if any exemptions, such as House Rent Allowance (HRA), are appropriately mentioned.

Section 80C deductions

Ensure that the deductions claimed under Section 80C for investments such as Employee Provident Fund (EPF), Public Provident Fund (PPF), life insurance premiums, etc., are correctly mentioned in Form 16. Confirm that the total deduction amount claimed aligns with your actual investments.

Section 80D deductions

Check if the deductions claimed under Section 80D for health insurance premiums are accurately reflected. Verify that the premium amounts paid for individual, family, or parents’ health insurance policies are correctly reported.

Other deductions

Review any other deductions claimed under applicable sections such as Section 80G (for donations), Section 80E (for education loan interest), or Section 80TTA (for interest on savings account). Ensure that the deductions claimed match your actual eligible expenses and investments.

Exemptions

If you are eligible for any exemptions, such as House Rent Allowance (HRA), confirm that the exempted amount is correctly mentioned in Form 16. Verify that the exemption has been calculated as per the applicable rules and based on the supporting documents provided.

Supporting documents

Keep in mind that while Form 16 provides a summary of your income and deductions, it is advisable to maintain supporting documents and proofs for the deductions claimed. These documents may be required for verification during the assessment by the tax authorities.

TDS details

Review the TDS details in Form 16, including the TDS amount deducted by your employer and the corresponding TDS certificates. Access your Form 26AS, which is the consolidated statement of TDS available on the Income Tax Department’s website.

Compare the TDS amount mentioned in Form 16 with the TDS details reflected in your Form 26AS. Ensure that the amounts match, indicating that the TDS has been correctly reported and deposited by your employer.

If you notice any discrepancies or mismatches between the TDS amount mentioned in Form 16 and the TDS details in Form 26AS, it is important to address them. Contact your employer or the concerned authority to rectify any errors and ensure that the TDS details are accurately reflected.

Verification and Certification

Check that Form 16 is properly signed and certified by your employer. A valid signature and certification indicate that the form is authenticated by your employer.

The certificate should bear the employer’s Tax Deduction and Collection Account Number (TAN) and other necessary details. Also, confirm that the form pertains to the relevant financial year for which you are filing your ITR. The relevant financial year should be clearly mentioned on the form, and it should align with the period for which you are filing your ITR.

The validity period of the form should align with the corresponding financial year. The form should cover the entire duration of your employment during that financial year, including any job changes or transfers within the same financial year.

Ensure that the format of Form 16 follows the guidelines specified by the Income Tax Department. It should include the required sections and information as per the prescribed format. This includes details of the employer, employee, salary components, deductions, exemptions, and TDS.

Additional Income

If you have any additional sources of income apart from your salary, ensure that these are properly declared in your ITR and reflected in your Form 16, if applicable.

Identify additional income sources: Determine if you have any other sources of income, such as income from house property, capital gains from the sale of assets, income from investments, rental income, or income from freelance or consulting work. It is important to include all such income sources while filing your ITR.

Declare the additional income: Make sure to declare these additional sources of income in the appropriate sections of your ITR form. Provide the necessary details, such as the nature of the income, the amount earned, and any applicable deductions or exemptions.

Cross-check with Form 16: If the additional income is reflected in your Form 16, verify that it accurately represents the income you have earned from those sources. Check if the deductions or exemptions related to the additional income are correctly accounted for in Form 16.

Maintain supporting documents: Keep all relevant documents, such as rental agreements, investment statements, capital gains calculations, or any other proofs of income, to substantiate the additional income declared in your ITR.

Taxable Income and Tax Liability

Calculate your taxable income based on the details provided in Form 16. Then, determine the applicable income tax slabs and rates based on your taxable income. Calculate the tax liability using the respective rates for each slab. Check if the tax liability computed matches your own calculations and the tax deducted by your employer.

Compare the tax liability calculated with your own calculations to verify if they match. Take into account the TDS by your employer, as mentioned in Form 16. Ensure that the TDS amount is appropriately accounted for and reflected in your tax liability calculations.

These are some key points to review in your Form 16 before filing your ITR to ensure accuracy and compliance with tax regulations. It is always advisable to consult a tax professional or chartered accountant for specific guidance tailored to your individual circumstances.

Accurate personal information in Form 16 is crucial to avoid any potential mismatches or errors in your ITR filing. If you notice any discrepancies, it is recommended to contact your employer or the relevant authority to rectify the information before submitting your ITR.

By calculating your taxable income based on the details provided in Form 16 and cross-checking the tax liability with your calculations, you can ensure accuracy in your ITR filing. If you identify any discrepancies, it is advisable to consult a tax professional or chartered accountant for assistance in resolving the issue.

Why should you file ITR even with no taxable income:

Originally Appeared Here

FLOWOOD, Miss. (AP) — Mississippi Lt. Gov. Delbert Hosemann and state Sen. Chris McDaniel, the fellow Republican trying to unseat him in a primary challenge, each sought to burnish their conservative credentials in speeches at the Mississippi Press Association convention on Friday.

Hosemann, of Jackson, is seeking reelection for a second term as the state’s second-highest-ranking official. Hosemann served three terms as secretary of state before winning the lieutenant governor’s race four years ago. McDaniel, of Ellisville, is a four-term Mississippi legislator who has lost two races for U.S. Senate in the past decade, including a bitter 2014 election that he refused to concede.

In Mississippi, the governor and lieutenant governor are elected separately.

Public education funding, the rate at which to lower the state’s income tax and efforts to shrink the size of government featured prominently in both Republicans’ speeches.

Hosemann portrayed himself as an austere steward of the state’s economy, saying that Mississippi’s Republican leadership has run the state like a business, a line he often deploys on the campaign trail. Hosemann said he oversaw a 12% reduction in the state’s debt and that the state has shed 2,300 state employees since he was elected in 2019.

“We’re in the best financial condition we’ve ever been since 1817,” Hosemann said. “We are poised for greatness. We are going to be competitive on every front, and I think we have laid the predicate for this.”

McDaniel, as he has since he launched his campaign in January, cast the primary race as an intraparty battle between a staunch conservative and an incumbent who has allowed Mississippi’s Republican-dominated Legislature to shift “too far to the left.” Accusing Hosemann of being “more inclined to be a Democrat than a Republican,” McDaniel vowed to push the Senate to the right if he were to preside over the chamber.

“I’m standing to fight for what I believe in one last time,” McDaniel said. “I’ve never understood why anybody would fear balanced budgets or the fact that people have to be empowered as opposed to collectives. That’s the conservatism I want.”

The candidates’ approaches to lowering the state income tax emerged as a flashpoint in the speeches.

McDaniel said Hosemann has failed to fully eliminate the state income tax, which he said puts Mississippi at a competitive disadvantage against states like Florida and Texas. Hosemann said he supports an incremental approach to lowering the income tax so lawmakers wouldn’t have to raise the sales tax to compensate for lost revenue.

During the 2022 session, legislators enacted a plan to reduce the state income tax over four years — Mississippi’s largest tax cut ever. That reduction starts this year. Legislation favored by Republican Gov. Tate Reeves and House Speaker Philip Gunn to eliminate the income tax died during the 2023 legislative session.

In his speech, Hosemann touted a teacher pay raise and a $245 million investment in public education. McDaniel said he would fight against “woke culture” in schools by supporting a “parental bill of rights.”

The lieutenant governor presides over the 52-member Mississippi Senate, appoints senators to committees and names the committee leaders.

A third Republican running in the primary, Tiffany Longino, did not appear at the event Friday. The lone candidate running in the Democratic primary is D. Ryan Grover, whose campaign website describes him as a small business owner. He also did not speak Friday.

Party primaries are Aug. 8, with runoffs Aug. 29. The general election on Nov. 7, with runoffs Nov. 28.

___

Michael Goldberg is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues. Follow him on Twitter at twitter.com/mikergoldberg.

Originally Appeared Here

Funding for the Internal Revenue Service proved to be one of the more contentious issues in the recent debt ceiling agreement. Republicans wanted to roll back some or all of the $80 billion in new funding that Democrats enacted in the 2022 Inflation Reduction Act, while Democrats claimed that less funding for tax law enforcement would mean more tax dodging and less revenue for the government. They settled on redirecting $20 billion of the new IRS funding to other domestic programs.

Scott Hodge – Courtesy Scott Hodge

What both parties ignore: The IRS does not need more money for enforcement; it needs fewer things to enforce.

Over the past two decades, both parties have increasingly turned to the tax code to deliver social and economic benefits, converting the IRS into a super-agency responsible for managing nearly 220 “tax expenditure” programs as diverse as the credit for geothermal energy production and the credit for child and dependent care.

Lawmakers have created 64 new tax breaks over the past 20 years alone, according to my own research and analysis.

No agency can competently manage such a vast array of programs. But Congress has set the IRS up for failure because of the way tax expenditures are designed.

Indeed, the IRS inspector general recently reported that the IRS paid out $26 billion in erroneous overpayments to taxpayers who claimed various tax credits, such as the Earned Income Tax Credit, Additional Child Tax Credit and American Opportunity Tax Credit. Overpayments for some of these credits and others were due to mistakes, fraud and insufficient documentation.

Despite the IRS’ best efforts, the amount of mistaken overpayments has grown in recent years, following decades of warnings by government auditors. According to PaymentAccuracy.gov, the government website that tracks the improper payments of federal agencies, the error rate for the Earned Income Tax Credit alone has averaged around 25% since 2004.

Story continues

In the IRS’ defense, these errors are not necessarily due to gross mismanagement or bad bookkeeping. Unlike traditional programs, such as Medicaid or the Supplemental Nutrition Assistance Program, tax breaks don’t require a lengthy application process or a face-to-face interview with a caseworker to verify a person’s eligibility.

On the contrary, tax credits and deductions are self-validating. The IRS cannot pre-screen people who claim a tax break. Taxpayers determine their own eligibility as they or their tax preparers complete their 1040 tax returns.

Only after the IRS receives a tax return can it try to validate a taxpayer’s eligibility for the credit or deduction. And the only tools the IRS has to verify a claim is to run tax returns through its computer verification software or through an audit. Both tools are costly and burdensome.

Moreover, unlike traditional spending programs, Congress often fails to require the IRS to measure the effectiveness of a tax credit or even collect the necessary data to determine its effectiveness.

Even if the IRS were required to perform such a review, how would the agency determine that the charitable deduction was the deciding factor in a taxpayer’s gift to the local homeless shelter?

What outsiders have found is that many of these tax programs don’t work very well.

For example, nearly 10 million taxpayers claimed some $15 billion in education tax credits in 2022. Education credits, such as the American Opportunity Tax Credit, are intended to make attending college more affordable and accessible by allowing taxpayers to reduce their taxes by up to $2,000 for college expenses. Yet a 2015 National Bureau of Economic Research study found that the credit “generated very little change in college attendance or other college-related outcomes.”

A 2017 study by the IZA Institute of Labor Economics reported that the “key insight from our study and others is that tax credits for college do not affect student outcomes — even when students receive information (on) them.” Education and economics scholars put it bluntly in 2018: “Evidence now clearly shows that these credits have zero effect on college attendance.”

Similarly, an estimated 13.6 million taxpayers claimed more than $27 billion in mortgage interest deductions in 2022. The mortgage interest deduction allows taxpayers who itemize deductions to write off the interest they pay on their home mortgage with the intent to make homeownership more accessible.

Yet 2020 research by the Congressional Research Service suggested that because wealthy taxpayers benefit most from the deduction, it “may have a larger effect on the size of homes purchased than on the decision to become a homeowner.” Another academic study from 2013 determined that the mortgage interest deduction “has no discernible impact on the level of US homeownership.”

The Inflation Reduction Act created or expanded 24 tax credits for green energy programs. Yet when the Government Accountability Office in 2015 examined two credits aimed at encouraging alternative energy production, it reported that since the IRS isn’t required to collect project-level data, “the total generating capacity they supported is unknown.”

In two recent reports, GAO complained about the lack of data to judge the effectiveness of the New Markets Tax Credit, or NMTC, and “opportunity zones,” tax programs intended to promote investment in low-income areas.

GAO found it was “difficult to establish causal links between NMTC-related financing and these reported project outcomes.” Another GAO report simply declared “there are insufficient data available to evaluate (opportunity zone) performance, including outcomes.”

Both parties have learned that “cutting taxes” through targeted tax breaks is more broadly popular than creating new spending programs. But the IRS’ job should be to collect taxes, not deliver benefits. It has all the money and auditors it needs to do that; it just needs a simpler tax code.

The path to a simpler tax code would start by eliminating many of these tax programs altogether through fundamental tax reform, or at least as a means of reducing the national debt.

For more CNN news and newsletters create an account at CNN.com

Originally Appeared Here

Green Party co-leaders Marama Davidson and James Shaw.
Photo: RNZ/ Angus Dreaver

The Green Party has announced its own plan for households to meet rising costs, with an “Income Guarantee” that will ensure no one gets less than $385 a week in their pocket after tax – funded through higher taxes on top earners, trusts and businesses.

The party’s co-leader Marama Davidson said for couples, the Income Guarantee would be at least $770, while a single parent would always have an income of at least $735.

“This will give everyone peace of mind that they can always afford the weekly shop, pay the rent, or cover unexpected costs – even when times are tough,” she said.

It will be funded through changes to the tax system which include a new top rate of income tax of 45 percent on income over $180,000 and a 2.5 percent Wealth Tax on assets.

Read the full policy document here.

However, anyone earning under $125,000 would pay less tax as a result, with a tax-free threshold of $10,000.

Davidson said it was “a transformational new way” of doing income support to lift every family out of poverty.

“The Income Guarantee is fully funded through fair and simple changes to the tax system that unlock the resources we need. Every dollar will come from those most able to contribute, while those on the lowest incomes will pay less.

“Overall, the Ending Poverty Plan will result in tax cuts of between $16 and $26 a week for 3.7 million New Zealanders.

“The Income Guarantee means families will always have enough kai, or to buy the shoes and warm clothes that children need. Students will no longer have to skip meals to make ends meet and can focus on their study. And if something happens that stops people from working, there is a guaranteed income that’s enough to live on.”

The current basic job seeker benefit is $258.50 after tax.

Party co-leader James Shaw said in a wealthy country like New Zealand, there were hundreds of thousands of people who were struggling to put food on the table, or where kids have to take days off school just so they can work to help their families cover the basics.

“What we do to prioritise the lives and livelihoods of those who need our support the most should be the measure of every political party. In fact, I would argue that any party that stops short of promising to lift every family out of poverty, is actively choosing to make life harder for thousands of people.

“I am sick of the politics of excuses. Everything we need to make life better for people in Aotearoa exists. What’s missing is the political willpower to use it. The time is now to lift every single family out of poverty and to pay for it with a fair tax system.

“Our fully costed plan will make sure everyone can pay the bills, put food on the table, and keep the house warm,” Shaw said.

Labour, National react to Greens’ proposal

In a statement, Labour Minister of Finance Grant Robertson said the party will release its own tax policy soon.

“All parties, including Labour, will have their tax policies to take into the election. Labour will release its policy shortly.

“I would note that Budget 2023 included aligning the trustee rate with the top 39 percent personal tax rate to make the tax system fairer.”

Nicola Willis
Photo: RNZ / Samuel Rillstone

National has released a tax plan but has said it will announce a fully costed fiscal plan closer to the election in October.

National’s Finance spokesperson Nicola Willis said the Greens’ proposed move would gut the country of investment and opportunity, as businesses would flee offshore or shut up shop.

“You can’t tax your way to a stronger economy. And it is only through a strong economy that we can lift incomes, solve the cost of living crisis and afford the public services that all Kiwis deserve.

“This massive tax grab by the Greens is exactly what the country doesn’t need – but unfortunately it is exactly what Kiwis can expect from a Labour-Greens-Te Pāti Māori coalition of chaos.”

Originally Appeared Here

Alabama lawmakers wrapped up the 2023 legislative session Tuesday, a three-month period that produced bills that will put some extra money in the pockets of state residents.

The session started on March 7 with Gov. Kay Ivey proposing tax rebates during her State of the State address.

With the state in an extraordinary position this year with surplus dollars for the education and General Fund budgets, lawmakers considered many ideas and reached a consensus on both tax cuts and a rebate.

Reduced sales tax on food

The Legislature passed HB479, a bill to reduce the 4% state sales tax on food to 2% in two phases. The sponsor was Rep. Danny Garrett, R-Trussville, and almost every member of the House and Senate were co-sponsors. The tax will drop to 3% on Sept. 1, 2023. It will drop to 2% on Sept. 1, 2024. The reduction to 2% would be delayed if tax revenues for the education budget are not projected to grow by at least 3.5% over the following year. Education revenues have grown by more than that amount the last few years but that is not always the case, particularly if there is an economic downturn.

The reduced rate will apply to foods that qualify under the Supplemental Nutrition Assistance Plan, formerly known as food stamps, which covers most foods, including fruit and vegetables, meat, poultry and fish, dairy products, breads and cereals, snacks, and non-alcoholic beverages.

The bill does not affect city and county sales taxes on food, except that local governments cannot raise their sales tax on food. The 2% reduction in the state tax is projected to save taxpayers about $300 million a year.

Read more: Can Alabama eliminate its entire grocery tax?

Tax exemption on overtime pay

HB217, by House Minority Leader Anthony Daniels, D-Huntsville, will exempt overtime pay from the state income tax. The exemption applies to pay that full-time hourly workers in the public and private sectors receive for working more than 40 hours in a week. The state income tax carries a 5% rate. So, for example, an employee who makes $20 an hour and works 10 hours overtime during a week, assuming time-and-a-half pay for the overtime, would take home an extra $15 that week because of the exemption.

The exemption takes effect Jan. 1, 2024 and will expire June 30, 2025 unless lawmakers extend it. Employers will be required to report to the state Department of Revenue the amount of overtime they pay and the number of employees who received it. That information will help lawmakers know the impact of the exemption as they consider whether to extend it. One concern is how it will affect the state education budget, because income taxes go to the Education Trust Fund.

HB217 had a cap of $25 million on the total exemptions paid, but Gov. Kay Ivey proposed an executive amendment to remove the cap, and lawmakers concurred with the change. Ivey’s amendment also moved the expiration date up from Jan. 1, 2027, to June 30, 2025. Daniels said he is confident lawmakers will extend the exemption.

Read more: Gov. Kay Ivey amendment removes cap from tax exemption on overtime pay

Tax rebate

After several changes to the proposal, lawmakers approved SB86, by Sen. Arthur Orr, R-Decatur, to provide a one-time tax rebate of $150 to individuals and $300 to couples filing jointly. To be eligible, residents must have filed a state income tax return for the 2021 tax year no later than Oct. 17, 2022. Nonresidents of Alabama are not eligible. Those claimed as dependents on another taxpayer’s return are not eligible.

The Department of Revenue will begin paying the rebates no sooner than Nov. 30, 2023. The rebates will be sent electronically to the bank account the taxpayer listed on their state income tax return. If no account is listed, the DOR will mail a check for the rebate.

Distracted driving

On Tuesday, the last day of the session, the Legislature approved SB301 by Sen. Jabo Waggoner, R-Vestavia Hills, to make it illegal to hold a cellphone while driving under certain circumstances. The bill expands an Alabama law that already made it illegal to text while driving.

The bill says it is a distracted driving violation if a driver crosses in and out of a traffic lane without using a turn signal, swerves, or otherwise operates the vehicle in an impaired manner while:

• Holding a cellphone or another electronic device
• Reading or sending a text message or email
• Watching a video
• Recording or broadcasting a video
• Using more than a single button or swipe of a finger to begin or end a call
• Reach for a cellphone or another electronic device in such a manner that requires the driver to no longer be in a seated driving position properly restrained by a safety belt.

The bill includes exceptions, such as using the cellphone to call emergency services, using a cellphone with an earpiece, headphones, steering wheel controls, or a mount to allow hands-free operation, or using a cellphone while the vehicle is parked on the shoulder of the road.

Supporters of the bill say they expect it to save lives. The House had considered similar bills for years but none had passed until Tuesday.

If Gov. Kay Ivey signs the bill into law, the penalty for a first violation would be $50. Police will not issue tickets, but only warnings, during the first year the law goes into effect.

Smoking in a vehicle

The Legislature passed HB3 by Rep. Rolanda Hollis, D-Birmingham, to prohibit smoking in a vehicle with passengers age 14 or younger. The prohibition applies whether the vehicle is in motion or at rest, and whether the windows are rolled up or down.

A violation is punishable by a fine of no more than $100.

Driver’s license suspensions

Lawmakers passed SB154 by Sen. Will Barfoot, R-Montgomery, to give drivers who have committed traffic violations more flexibility in paying their fines and fees before having their license suspended.

The bill allows people to miss up to three payments on a payment plan for fines and fees before a judge could suspend their license. It would also allow up to one missed court date, outside of an initial date. Gov. Kay Ivey has signed the bill into law.

Supporters of the bill said it was counterproductive in many cases to suspend driver’s licenses and make it difficult for those with traffic violations to get to work, school, and family obligations.

Hospital visitation

The Legislature passed SB113 by Sen. Garlan Gudger, R-Cullman, to allow hospital patients and nursing home and assisted living facility residents to designate an “essential caregiver” who would be assured of being able to visit at least two hours a day in addition to the facilities’ normal visitation hours.

The bill came in response to family separations that occurred during the COVID-19 pandemic. Gudger said it was not meant as a criticism of how hospital staffs managed visitation during the pandemic. Under SB113, the patient can designate different people as essential caregivers on different days. If a patient was unable to make a designation, a family member could do so.

The bill requires hospitals to allow visitation under specific circumstances, including end-of-life situations, patients facing major medical decisions, struggling with the change in environment and lack of in-person family support, patients who who need encouragement to eat and drink, and other circumstances.

Read more: 12 things Alabama changed for schools, teachers, students in 2023 legislative session

Absentee ballot bill, other contentious bills quietly die on last day of legislative session

Originally Appeared Here

Concerns among Senate leadership about Oklahoma’s long-term fiscal outlook stalled efforts to implement sweeping tax cuts, but some taxpayers will soon enjoy new benefits.

Here’s a look at how state lawmakers approached tax policy in 2023:

The Big Impact: Parents who send their children to private school or homeschool will be eligible to receive a refundable tax credit beginning in 2024.

House Bill 1934 creates a tiered tax credit system for private school families, with those earning less than $75,000 per year eligible to receive the largest credit. Here’s how the tiers are structured:

• Household income less than $75,000: up to a $7,500 credit per student

• Household income between $75,000-$150,000: up to a $7,000 credit per student

• Household income between $150,000-$225,000: up to a $6,500 credit per student

• Household income between $225,000-$250,000: up to a $6,000 credit per student

• Household income exceeding $250,000: up to a $5,000 credit per student

Homeschool families are eligible to receive a credit of up to $1,000. Any amount beyond what is owed in state income tax would be refunded to the taxpayer.

The Legislature has allocated $150 million to the program in 2024, increasing to $250 million by 2026. The bill gives preference to families earning $150,000 or less per year.

Most of the oversight of the program will fall to the Oklahoma Tax Commission, which noted in a fiscal impact statement several concerns about administering the program.

Also Notable: Lawmakers removed a “marriage penalty” in the state’s tax code that caused some married couples filing jointly to pay a slightly higher tax rate than individuals who file separately.

House Bill 1040 raises the amount subject to the state’s 3.75% tax bracket from $2,400 to $4,600. The change is expected to reduce state revenue by $5.9 million in Fiscal Year 2024 and $14.7 million in Fiscal Year 2025, according to the Oklahoma Tax Commission.

Left Behind: While the House and Governor’s office aligned on eliminating the state portion of the grocery sales tax, that reduction was not included in the Legislature’s final budget proposal.

As of April 2022, Oklahoma was one of just 13 states to levy a tax on groceries. A family of four that spends $250 per week on groceries will pay about $292 annually in state grocery tax.

Eliminating the 4.5% tax on food and food ingredients would have reduced state revenue by an estimated $370 million in Fiscal Year 2024, according to an analysis from the Oklahoma Tax Commission. While House Bill 1955 advanced through the House with just seven no votes in late March, Senate leadership showed little interest in taking up the bill, fearing that a future economic downturn could put the state in a difficult financial position.

“We’ve always held as a Senate that we need to be able to be able to afford anything long term, and tax cuts that have been proposed don’t line up with that sustainability,” Senate Pro Tem Greg Treat, R-Oklahoma City, said last week.

Personal income tax cuts, which Stitt called for in his State of the State address in February, were also left out of the legislature’s final budget proposal. Critics of a proposed 0.25% across-the-board cut, including the Oklahoma Policy Institute, said it would primarily benefit the wealthy over lower and middle-class Oklahomans.

In his weekly press availability on Friday, Stitt said he is considering calling lawmakers back to the Capitol in a special session to consider tax cut proposals. A similar tactic from the governor at the end of last year’s session proved unsuccessful.

“When we do a tax cut and we put money back into Oklahomans’ pockets, it’s not like it disappears,” Stitt said. “All we’re saying is they know how to spend their money better than the government.”

Originally Appeared Here