Latest news with #taxdeduction
Forbes
7 hours ago
- Automotive
- Forbes
Here's How Trump's ‘One Big Beautiful Budget Act' Would Affect Car Buyers And Owners
President Trump's "One Big Beautiful Budget Act" includes provisions that would directly affect ... More motorists. The U.S. House of Representatives has passed what's officially called the "One Big Beautiful Bill Act," and while it's likely to be sliced and diced to some extent by the Senate and sent back to the House, as written it includes several provisions that would directly impact those owning or looking to buy a car, truck or SUV. Here's a quick look at the key measures: As written, the bill would allow qualifying car buyers to claim a tax deduction of up to $10,000 for interest paid on a new-vehicle loan. The deduction would extend from 2025 to 2028 and be subject to certain restrictions. For starters, it would only apply to vehicles that are assembled in the U.S., and not include leases and interest paid on commercial vehicles. Eligibility to take the deduction would phase out for individuals earning more than $100,000, or $200,000 for couples filing jointly. On the plus side, a taxpayer wouldn't have to itemize to be able to claim the deduction. According to Kelley Blue Book, the average price of a new vehicle stands at around $48,000, with car loan rates at an average of 8.64%. Cox Automotive predicts that if a given owner pays $2,000 per year in car loan interest, he or she would save around $400 in taxes, or $2,000 over the course of a five year loan. At the least the new deduction would help to offset the inevitable price hikes likely to be caused by Trump's assorted import tariffs (see below). It's well known that President Trump is no fan of electric vehicles, despite his extended bromance with Tesla CEO Elon Musk, and the budget bill reflects that attitude. As expected it eliminates the one-time tax deduction/rebate of up to $7,500 that was enacted on President Obama's watch and later modified by President Biden. As it now stands, the credit can only be claimed by income-qualifying buyers on a relative handful of EVs that meet certain requirements for domestic production and are priced under $50,000 for passenger cars and $80,000 for trucks, vans and SUVs. (Some automakers have managed to exploit a loophole in the legislation that passes all or part of the incentive to those who lease an EV that otherwise doesn't qualify for the credit.) The provision would also eliminate the tax credit of up to $4,000 or 30 percent of a used EV's sale price as well. While the credits wouldn't be completely eliminated until December 31, 2026, they would expire at the end of 2025 for automakers who have sold more than 200,000 qualifying EVs. That includes virtually all the major players in the electric vehicle market, but favors newcomers like Lucid and Rivian. The bottom line here is those considering a battery-electric car, truck or SUV should act sooner rather than later to be able to claim this lucrative incentive. The bill as written would also impose a new federally imposed annual registration fee of $250 for EV owners and $100 for those driving gas/electric hybrids. Assumedly this is to help make up for gas tax money not collected from those driving full electric or lessened among owners of higher-mileage gas/electric models. The bill places the responsibility for assessing the fee on individual states and would penalize those that do not comply. As it stands, some states like California and Washington already charge EV owners an additional annual registration fee, with the federal charge likely to be added on top of the above amounts. The One Big Beautiful Bill Act would essentially prohibit the Federal Trade Commission from enforcing what's called the Combating Auto Retail Scams Rule. Known as the CARS Rule, it requires car dealers to provide full pricing disclosure and obtain a buyer's explicit consent to purchase add-ons like service contracts, rustproofing and the like. However, the restriction would reportedly only be in effect until September 30, so it's not exactly a complete cancellation. And while not a part of the budget bill, new-vehicle buyers are almost certain to pay more in the months to come from federal tariffs on vehicles and components imported from other countries. This includes the large percentage of domestic-branded cars and trucks assembled in Canada and Mexico, and the multitude of parts sourced from China, not to mention a whopping 50% just announced on imported steel. However, since Trump's tariffs are currently undergoing legal challenges and seem to be subject to whichever way the political wind blows, it's not exactly clear how much sticker prices will be affected when and if the dust settles. Sources predict hikes as high as $5,000 to $10,000 on imported vehicles and $2,000-$3,000 on those produced domestically. Of course, everything in the One Big Beautiful Bill Act remains subject to revision until Trump signs a final version into law, so stay tuned.
CNA
16 hours ago
- Business
- CNA
Some arts groups becoming not-for-profit entities to encourage more donations
SINGAPORE: More arts groups in Singapore have been turning into Institutions of Public Character (IPCs) in recent years, which gives tax benefits to their donors. Between 2019 and 2023, the number of arts groups doing so rose from 75 to 88 — a nearly 20 per cent increase, according to the Commissioner of Charities annual reports. IPCs are required to conduct activities that exclusively benefit the local community. This not-for-profit status could spur more donations, said observers. INCREASE IN SUPPORT The Siong Leng Musical Association, for example, applied for IPC status in 2022 after gaining more recognition over the years. The arts group was established in 1941 to preserve and promote Nanyin, an ancient Southern Chinese music form. Siong Leng's donors can receive a 250 per cent tax deduction with its IPC status, making it more appealing to donate to the group. Ms Lim Ming Yi, outreach manager and artist at Siong Leng, said 'Through this, we hope that it opens more doors for us, more opportunities and also helps us establish better credibility and accountability, for existing and future organisations and individuals who may be more inclined to donate to us because of tax deduction benefits.' Since then, the group has seen an estimated 50 per cent increase in support. 'We were able to pull more into our education and outreach initiatives locally and abroad, for overseas exchanges as well,' said Ms Lim. 'Other than that, I think being an IPC company also signals a level of transparency and governance, which can reassure existing and future stakeholders.' But attaining this status is no easy feat. Paper Monkey Theatre, a puppet theatre company, said it had to hire an accountant and a lawyer to meet compliance requirements. These additional services cost around S$20,000 (US$15,500), but such expenses were covered by the Sustain the Arts (stART) Fund by the National Arts Council. Mr Vincent Ong, general manager of the Paper Monkey Theatre, said the council encouraged the company to apply for the IPC status to rebrand itself. 'Before (that), our donation yearly actually came up to only about S$6,000,' he said. 'But ever since we got the status, there (has been) a 200 per cent jump in the donations,' he noted, adding that the IPC status has helped it to attract donations from more corporates. 'So we get probably about S$16,000 to S$18,000 a year of donations, and that has helped us a lot.' GROWING THEIR CRAFT One benefit of being an arts IPC is that organisations with the status can apply for the Cultural Matching Fund (CMF), which gives a dollar-for-dollar boost to receive donations. This gives companies more means to improve and grow their craft, which also translates to more room for creativity. Since 2014, more than S$400 million of the CMF has been disbursed. Yet for the Paper Monkey Theatre, the funds raised may not be enough to sustain yearly programmes. Its costs can go as high as five times its total donations, largely due to maintenance and professional fees. Other IPCs such as Art Outreach Singapore, which focuses on the visual arts, have taken a different approach. It has turned to other means of income such as more commercial projects. While the earnings are not viable for the CMF top-up, they ensure a diverse stream of revenue for its programmes. 'We can hire artists to help paint a mural, help with workshops, help with a brand activation,' said Ms Mae Anderson, chairman of Art Outreach Singapore. 'We get to help artists not just get the work, but help artists professionalise themselves,' she added. 'So I think this is something that is a lot more fruitful for the system where we get a little bit of fee, the artists get the work, and the corporates get to do more with art.' Ms Anderson said she is looking forward to more collaboration and peer learning among arts groups, so they can share best practices and grow stronger together in their journey as IPCs.
Fox News
6 days ago
- Business
- Fox News
National Police Union signals strong support for President Trump's ‘Big, Beautiful Bill'
The largest police union in the country has issued an endorsement of key provisions of the President Donald Trump-backed "big, beautiful" budget bill. National Fraternal Order of Police (FOP) President Patrick Yoes announced strong support for the bill on Wednesday evening, saying "the 'One Big Beautiful Bill Act' is more than legislation—it is a promise kept to the public safety officers across the country and a bold step toward an economy that respects, rewards, and uplifts the people who keep it safe." Yoes expressed strong support for two provisions in the bill, a tax deduction for overtime pay and an increase in the state and local tax (SALT) deductions, which the FOP said are important to the rank-and-file members of the 377,000-member organization. The FOP president praised the leadership of Trump and House Speaker Mike Johnson for passing the bill in Congress. The bill passed the House after an all-night debate last week in which Republicans squeezed out a victory in a 215-214 vote. The bill now faces significant opposition from Democrats and some Republicans in the Senate. "President Trump first proposed the elimination of Federal income taxes on overtime while still a candidate, and we are very pleased that a similar provision is included in the 'One Big, Beautiful Bill Act,'" Yoes said. Regarding the bill's increase in SALT deductions, the FOP praised portions of the big, beautiful bill that would create a tax deduction for income taxes on overtime earnings for those who earn less than $160,000 per year as well as increase the SALT deduction to $40,000 for all taxpayers earning less than $500,000 per year. SALT deduction caps primarily benefit people living in high-cost-of-living areas like New York City, Los Angeles, and their surrounding areas. Republicans representing those areas have framed raising the SALT deduction cap as an existential issue, arguing that a failure to address it could cost the GOP the House majority in the 2026 midterms. Meanwhile, Republicans representing lower-tax states are largely wary of raising the deduction cap, believing that it incentivizes blue states' high-tax policies. Rep. Rich McCormick, R-Ga., told Fox News that he is hopeful the Senate would address the SALT deductions, positing that the provision would add $385 billion to U.S. deficit spending. Yoes, however, said "the current cap on SALT deductions uniquely and unfairly penalizes law enforcement officers, who often are required to live within a certain distance of the jurisdictions they serve—removing a valuable mechanism that allowed for a reduction in their cost of living." He said the SALT deduction is also "a valuable way of supporting local budgets as law enforcement agencies are facing an array of financial challenges associated with inflated costs of equipment, vehicles, and personnel, especially with respect to the ongoing recruitment and retention crisis." "These are critical provisions to ensure those in the law enforcement profession have a better quality of life," said Yoes. "We appreciate that President Trump is always fighting for our nation's law enforcement officers."
Wall Street Journal
27-05-2025
- Business
- Wall Street Journal
How SALT Pits the Rich vs. Poor in New York
In your editorial 'The GOP's SALT Deal Folly' (May 22), you rightly criticize House Republicans from New York for securing an increase in the state-and-local tax deduction. The giveaway, you note, will subsidize 'profligate Democratic-run states.' But SALT isn't merely a red vs. blue issue; it also pits the poor against the rich. New York is a perfect example. Internal Revenue Service data for 2022 shows that New York is home to five of the top 50 congressional districts with the most taxpayers affected by SALT. Rep. Mike Lawler's district ranks 29th, and Rep. Nick LaLota's 39th. But New York also has four poor districts that have among the fewest taxpayers affected by SALT. Ranking 422nd is Rep. Ritchie Torres's district in the Bronx, which had an average income of $36,265 in 2022. The average income in Mr. Lawler's district was $144,270.
Forbes
27-05-2025
- Business
- Forbes
Wildfire Tax Payment Issues Can Hinge On Federal Disaster Declaration
LOS ANGELES, CALIFORNIA - JANUARY 8: Flames from the Palisades Fire burn a building on Sunset ... More Boulevard amid a powerful windstorm on January 8, 2025 in the Pacific Palisades neighborhood of Los Angeles, California. Fueled by intense Santa Ana Winds, the Palisades Fire has grown to over 15,000 acres and 30,000 people have been ordered to evacuate while a second major fire continues to burn near Eaton Canyon in Altadena. (Photo by) If your home or property is destroyed or damaged in a wildfire, you are likely to have surprisingly complex tax issues. If you recover money from insurance or a lawsuit – or if you claim a casualty loss on your taxes – you need to know some tax rules. Several key tax issues and benefits hinge on whether your fire was a 'Federally declared disaster' for tax purposes. Claiming a casualty loss on your taxes after a disaster can help you keep funds you would otherwise have to pay to pay in taxes. Casualty loss deductions are limited to the lesser of your adjusted tax basis in your damaged property, or the reduction in the fair market value of the property from the disaster. So even if you lost a very expensive home with a high fair market value, if you paid a small amount for it many years ago, your basis and therefore your tax deduction is small. Since 2018, you can generally claim this deduction only if your loss was in a Federally declared disaster. This limitation is set to expire at the end of 2025, but the One Big Beautiful Bill Act in Congress would make this rule permanent. You can claim a casualty loss deduction in the tax year immediately before the year of the disaster. Thus, LA fire victims who lost homes in January 2025 can claim a casualty loss on their 2024 taxes, even though the loss did not occur during 2024. Claiming a casualty loss can make sense, and is a popular tax break for fire victims in disaster areas. You can read more here, so you know the rules and potential downsides. Section 1033 of the tax code is a key relief provision for victims of disasters. Generally, amounts received for damage to property, including property insurance payments, are treated as sales proceeds for tax purposes. Whether you have gain is based on your tax basis in the property. Section 1033 generally allows property owners to elect to defer paying tax on their casualty gain. Making the election allows you to reinvest insurance or litigation proceeds into the repair, reconstruction, or replacement of your damaged property within a prescribed time limits. The time to reinvest can be tricky and depends heavily on your facts. What rules apply under Section 1033 depend on whether the involuntary conversion occurred in a Federally declared disaster. With a Federally declared disaster, you can: If you have casualty gain from a federally declared wildfire that damaged your principal residence for the first time in a given tax year, you have until four years from December 31 of that year to reinvest the proceeds under Section 1033. Any casualty gain you have in any subsequent tax year must be reinvested by the same deadline, which was based on the first year you had casualty gain. Therefore, it is possible that some casualty gain may have less than four years to be reinvested under Section 1033, if casualty gain was first triggered in a previous tax year. This can create complications for taxpayers who receive insurance proceeds over several years. It can also create timing problems where a taxpayer receives insurance proceeds in one year, and a litigation recovery for the same fire several years later. Indeed, it is possible that the Section 1033 replacement period may have already ended due to casualty gain created several years earlier. That is, the Section 1033 replacement period may have already ended when the taxpayer receives a litigation recovery for their fire. The timing is tricky, but if you can meet the timing, the property owner does not have to pay immediate tax on the casualty gain, and the gain can be deferred indefinitely until the property is later sold. The net effect of these rules is that a fire victim often will not owe any income tax on their insurance proceeds until the property is later sold. Section 1033 is not the only tax code provision fire victims need to know, but it is usually the main way fire victims that fire victims can rebuild without current tax. In December 2024, Congress enacted the Federal Disaster Tax Relief Act of 2023, providing an exclusion in the tax law temporarily so many wildfire settlements are tax free if received during 2020 through 2025. The exclusion does not apply to all fire victims or all fires, it applies only to fires that were Federally declared disasters. For wildfires that are not Federally declared disasters, you must rely on Section 1033 and other provisions. The new law applies only to payments to individuals, so partnerships, irrevocable trusts, and various other entities appear not to qualify. The only major carve-out of the exclusion is that an amount cannot be excluded if it compensates the taxpayer for a loss or expense that has already been reimbursed by another source, say through insurance. You can read more here about how fire victims without a federal disaster declaration are taxed.
