Skip to contentNational Women's Law Center

Taxes

The Good, the Bad, and the Ugly: 5 Key Developments in Budget & Tax Policy in 2014

  • The government didn’t shut down—although it came very close--and Congress agreed to fund most agencies through the end of Fiscal Year 2015. A few programs, including the Child Care and Development Block Grant, received modest increases.  But most domestic programs face freezes or cuts in FY 2015—on top of years of cuts in programs vital to women and their families—and even deeper cuts in FY 2016.

Stem the Rising Tide of Corporate Inversions

Taxpayers scored a major win this week when Walgreen Co. nixed plans to become the latest U.S. corporation to move its corporate address abroad in order to dodge tax bills here at home. Public outcry against the legal loophole known as “inversion” is reaching a fever pitch; clearly, Walgreen was listening. Let’s hope Congress is, too.

Inversion is a scheme by which a company based in the U.S. can merge with a company abroad and then re-incorporate in that other country – one with a more advantageous tax structure, typically the UK, Ireland, or Switzerland – to avoid paying taxes at home.

These U.S. inverters are, literally and figuratively, un-American. With each new deal that’s struck, they push even more of the tax burden onto workers, families, and small business [PDF]. Read more »

Two Simple Tax Code Changes that Would Make a Big Difference for Working Families

I have an almost 2 year old daughter, Lilly. She is so many things: funny, loving, adventurous, curious…expensive. I mean she’s worth it and all, but man does that girl eat her way (literally and figuratively) through our family budget every month.  I know our family is not alone. It seems like everyone is talking about the rising cost of raising children—and it turns out that talk is actually true. And despite the rising cost of living and child rearing, most family income is not keeping up, delivering a one-two punch to working families’ bottom lines.

On June 23rd, the White House will hold a Working Families Summit to focus on the current needs of America’s working families, and potential policy solutions that can help address those needs. I’m hopeful that the Summit will be the beginning of a concerted push for changes that will respond to the economic realities of working families—including some changes in our tax code. There are many tax provisions that can help families make ends meet while raising kids—and a couple of commonsense proposals to make those tax provisions even more meaningful. Read more »

IRS Announces Bill of Rights for Taxpayers

You’re a taxpayer. Do you know what your taxpayer rights are? If you’re like most Americans, the answer is probably no. In fact, only 11% of taxpayers surveyed in 2012 [PDF] said they knew what those rights entailed—and less than half believed they had any rights at all.

Yesterday, the IRS took aim at these dismal statistics with the adoption of a Taxpayer’s Bill of Rights. The document mirrors the Constitution’s Bill of Rights, in that it groups the dozens of existing rights in the tax code into 10 fundamental rights that every taxpayer should know, understand, and use. The National Taxpayer Advocate has long called for this document—a foundational framework that will encourage taxpayer “confidence in the integrity and fairness of the system.” With knowledge and confidence comes voluntary compliance at tax time—something we can all agree is beneficial to maintaining and building upon our current social structures.

So without further ado, I present the newly adopted Taxpayer’s Bill of Rights. Read on and get to know your rights, Taxpayer! Read more »

Here's a Better Idea: Pay for Corporate Tax Breaks by Closing Other Corporate Loopholes

Earlier this week, legislation that would extend through the end of 2015 nearly all of the tax provisions that expired at the end of 2013 (and two provisions scheduled to expire at the end of this year) — known as the “tax extenders” because they’ve been routinely extended from year to year — cleared a procedural hurdle when the Senate voted 96 to 3 to begin debate on the bill.  

Guess what? The package will cost $85 billion over ten years. And the Senate has no plan to pay for it. More than 80% of the tax breaks benefit businesses, including multinational firms that ship jobs and profits overseas, NASCAR track owners, and racehorse owners.

It’s especially disturbing that the Senate would — like the House — consider spending billions on corporate tax subsidies without requiring that they be paid for before Congress acts on the far more urgent matter of extending emergency unemployment insurance benefits for over 2.7 million Americans who have lost their benefits since Congress refused to extend the program in December.   Read more »

A New Twist on Tax Day

Happy Taxpayer Pride Day! Yes - you read that right, and no - I haven’t lost my mind.

For many, April 15 brings feelings of doom and gloom. It’s the day you might have to hand over some of your hard earned money to Uncle Sam (and if you’ve waited until the last minute, it’s the day you’ll have to stand in a long line at the Post Office with your fellow procrastinators). But we, inspired by our brilliant friends at NETWORK, will be celebrating April 15 as a day of joy and gratitude.

Why?

When you think about it, the world around you is fueled by tax revenue. Without taxes, we’d be less safe, less educated, and all around less content. Safety first: our tax dollars support police officers, fire fighters, the uniformed military, traffic lights, stop signs, street lamps, crossing guards, guardrails, airport security. I could keep going but I think you get the picture. Taxes support our elementary, middle, and high schools, state colleges and universities, cutting edge research that can both change and save lives, health care for the over-65 crowd (that’ll be you someday!) and the poor. Read more »

2 out of 19?! Paid Tax Preparers Receive a Failing Grade

2 out of 19.  According to a new report from the GAO, 2 out of 19 is the number of randomly selected paid tax preparers who calculated the correct refund amount on tax returns.  That means that fully 89% of the time, tax returns prepared by paid preparers are incorrect—ultimately putting the individuals and families who file them at risk of paying penalties or even facing criminal sanctions

This is an especially serious problem for low-income families, the majority of whom rely on paid tax preparers to help them file their taxes.  In 2011, 60% of EITC recipients—or 16 million families—relied on a paid tax preparer to help them with their taxes.  These are families whose tax refunds provide an infusion of cash that helps them pay down debt, cover major expenses like car repairs, and otherwise make up for all those other months when—no matter how many corners they cut—ends just don’t quite meet.  Read more »

Tax Day Cometh - And That Can Mean Help for Millions of Families

As the April 15 tax filing deadline approaches, NWLC and its partners want you to know about federal and state tax credits for which working families may be eligible -- and how to get help filing tax returns.

Many families are still struggling to recover from the recession, and keeping up with their bills can be a challenge. So it’s important now, especially for families with children, to claim federal and state tax credits that can to help them make ends meet.  To do that, families must file tax returns.

Families may be eligible for:    Read more »

Obamacare and Taxes: Two Important Tips for Avoiding a Headache (and a Wallet Ache!) Next Year

Did you recently sign up for health insurance through your state’s health care marketplace?  If so, hurray! I’m sure I don’t have to tell you why having affordable health insurance is a great thing. (If you or a loved one doesn’t currently have health insurance, and you haven’t signed up through the Marketplace yet, it’s time to start shopping—the open enrollment period ends in a little over a month, on March 31.)

But wait, you ask—what do taxes have to do with signing up for health insurance? Quite a bit, it turns out. The IRS just released some health care tax tips—from those, here are a couple of really important highlights to keep in mind between now and next tax season. And yes, I did say next tax season—what you know now will definitely help you later. Read more »

This Tax Season, Equal Treatment for Same-Sex Married Couples

"The federal statute is invalid, for no legitimate purpose overcomes the purpose and effect to disparage and to injure those whom the State, by its marriage laws, sought to protect in personhood and dignity. By seeking to displace this protection and treating those persons as living in marriages less respected than others, the federal statute is in violation of the Fifth Amendment."

U.S. v. Windsor

“In light of the Windsor decision, the [Internal Revenue] Service . . .concludes that the terms “husband and wife,” “husband,” and “wife” should be interpreted to include same-sex spouses.”

IRS Rev. Rul. 2013-17

 

I know this might sound strange, but filing my taxes the year after my wedding made me feel more married.  I remember it distinctly—around this time of year, the W-2s arrived. My husband and I worked on the tax return together, and filed using the Married Filing Jointly status. There was something about that tax form recognition that felt weighty and real. Official.

So when the Supreme Court struck down a portion of the Defense of Marriage Act (DOMA) in U.S. v. Windsor last June, I thought about that feeling that I had at tax time in the year after I got married. And no joke—that very thought made me tear up. Why? Simply put, Windsor was huge decision, both symbolically and practically. It provided, for the first time, federal recognition and protections for same-sex, legally married couples. Just one example of the decision’s far reaching implications: this tax season, if a couple is legally married in a state or foreign country that recognizes same-sex marriage, they are considered married for federal tax purposes. This is a welcome change from previous tax years, when, because of DOMA, same-sex married couples were denied the ability to file their federal tax returns using a married status. Read more »