Category Archives: Tax Advice

Trump tax cuts: the more you’ve got, the more you’ll get

Since the election, clients have asked me what Donald Trump is going to mean for their taxes. My brief answer: Nothing right now — there aren’t going to be any changes for 2016. For 2017, it looks like the Trump plan will mean that the richer you are, the more you will benefit.

As Wall Street bigwig Steven Rattner points out, more than half of Trump’s proposed tax cuts would go to the top 1% of earners (households with incomes of more than about $450,000 annually.) Amazingly, one out of every four dollars of tax reduction would go to the top one-tenth of one percent of Americans, who would see their taxes cut by an average of almost $1.5 million apiece by 2025.

Compare that with the average cut of $1,090 for people in the middle 20% of the economic spectrum (household income of around $45,000-$70,000).

Of course, all of these numbers are just proposals as part of a political campaign. But they’re part of what Trump got elected on. And any big tax cuts may be matched by spending cuts, potentially including Social Security, Medicare, education, and other programs. So, quite honestly, for my wealthiest clients, the advice is to try to defer income into 2017 if they can. For most of the rest, and especially for those toward the lower end of the earning spectrum, the advice is to hang on. It’s likely to be a wild ride.

Paying for college when you can’t pay for college

Every year I consult with clients who have children applying to college and who don’t have enough saved–or don’t have anything saved–to cover the costs of a higher education. In The New York Times, Ron Lieber has a good piece guiding parents–savers and non-savers alike–to figuring out how much a school might actually cost you… Continue Reading

Pay your taxes — or lose your driver’s license! NY State has a cool idea to convince reluctant tax-payers.

I regularly tell clients that cash-starved states have become very entrepreneurial and even aggressive in their tax collection efforts. If you earn money in a state, the tax department will probably be willing to go to court to collect income taxes even if you live hundreds of miles away. (I’m looking at you, New York… Continue Reading

IRS security puts taxpayer info at risk

The IRS won’t contact taxpayers by email, because of security concerns. When I am representing a client, auditors generally will not send me emails, for the same reason. And the Service regularly puts out notices telling taxpayers how to maintain their privacy and not get taken in by scammers claiming to be with the government.… Continue Reading