Some States Are Fighting Back Against New Tax Reform Law
Some States Are Fighting Back Against New Tax Reform Law
By Alan Olsen
It’s no secret that not everyone is happy with the nation’s new tax reform bill that was signed into law last December. Among those least pleased with the bill are taxpayers that live in high-tax states. In fact, several of these states are doing everything in their power to fight back.
One of the biggest controversies in the new tax reform bill is the reduction of the state and local tax deduction. Originally, it was going to be completely eliminated, so the news could have been worse. The new law does still allow a deduction of up to $10,000 combined for property taxes, and either income tax or sales tax.
But that is little consolation to many taxpayers living in states like New York, New Jersey, California, and Connecticut where $10,000 won’t go very far. Losing the state and local tax deduction is a big hit for people who already pay much higher taxes. So what are these states doing about it?
Let’s just say they aren’t going down without a fight. For starters, some states are looking into taking legal action. The Governor of New York, Andrew Cuomo, is already calling the new limit unconstitutional and the state is looking into the possibility of suing the federal government.
While it remains to be seen how far a lawsuit would actually go other states are looking at more realistic solutions. For example, one possibility would be to allow taxpayers to pay their taxes as charitable donations. Another option is to credit every dollar paid with a matching dollar that could be used as a charitable donation deduction.
These options could work because, there is currently a 50% of AGI maximum for charitable donation deduction, extended to 60% under the new bill starting 2018. But it’s not full-proof because the IRS could counter that you don’t need any deduction if you get a matching credit for every dollar you pay.
Time will tell if states will be able to circumvent the new law, but it will definitely be an interesting battle to watch play out.
We hope you found this article about “Some States Are Fighting Back Against New Tax Reform Law” helpful. If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page or our website at www.GROCO.com. Unfortunately, we no longer give advice to other tax professionals gratis.
To receive our free newsletter, contact us here.
Subscribe our YouTube Channel for more updates.
Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com. GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.
Alan L. Olsen, CPA, Wikipedia Bio
GROCO.com is a proud sponsor of The American Dreams Show.
The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business. Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.
The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most. They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..
American Dreams discusses many topics from some of the world’s most successful individuals about their secrets to life’s success. Topics from guest have included:
Creating purpose in life / Building a foundation for their life / Solving problems / Finding fulfillment through philanthropy and service / Becoming self-reliant / Enhancing effective leadership / Balancing family and work…
MyPaths.com (Also sponsored by GROCO) provides free access to content and world-class entrepreneurs, influencers and thought leaders’ personal success stories. To help you find your path in life to true, sustainable success & happiness. It’s mission statement:
In an increasingly complex and difficult world, we hope to help you find your personal path in life and build a strong foundation by learning how others found success and happiness. True and sustainable success and happiness are different for each one of us but possible, often despite significant challenges. Our mission at MyPaths.com is to provide resources and firsthand accounts of how others found their paths in life, so you can do the same.
IRS Has Handed Out More Than $100 Billion in Refunds so far
As with every tax season there have been some mistakes that have caused problems for some taxpayers, as well as the usual battle with tax scams that pop up every year. However for the most part, the refund process has gone well to this point. In fact, at the end of February, the IRS reported…
There Is a Bright Side for Early Filers Victimized by Obamacare Gaffe
There’s been no shortage of complaints and problems with Obamacare since the nations new health care coverage law went into effect. In fact, the debate continues to rage on and another major decision from the U.S. Supreme Court is forthcoming in the months ahead. However, for the time being, Obamacare has been a problem for…
Should You Pay Estimated Taxes?
For most people tax time only comes once year. However, for anyone who has to pay estimated taxes a large tax bill could be due several times a year. Again, most people do not have to worry about paying estimated taxes, but there are several circumstances that will put you in that category. The most…
Do not Be the Victim of a Tax Scam
As the tax season continues to be in full swing we here at GROCO continue to hear of more and more tax scams making the rounds. We’ve discussed tax scams before, but it never hurts to repeat this important information, especially at this time of year when tax scammers are so prevalent. In fact, several…