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How does the deduction for state and local taxes work ...

State and local income and real estate taxes make up the bulk of total state and local taxes deducted (about 60 percent and 35 percent, respectively), while sales taxes and personal property taxes account for the remainder. The state and local tax (SALT) deduction is one of the largest federal tax expenditures, with an estimated revenue cost of $96 billion in 2017 and $1.3 trillion over the...

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Date: 2018-04-05 06:24:41

What is the earned income tax credit (EITC)? | Tax Policy ...

What is the earned income tax credit (EITC)?

Taxes and the Family

What is the earned income tax credit?


The earned income tax credit subsidizes low-income working families. The credit equals a fixed percentage of earnings from the first dollar of earnings until the credit reaches its maximum. The maximum credit is paid until earnings reach a specified level, after which it declines with each...

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Date: 2018-04-05 08:03:00

What is the AMT? | Tax Policy Center

The individual alternative minimum tax (AMT) operates alongside the regular income tax. It requires many taxpayers to calculate their liability twice--once under the rules for the regular income tax and once under the AMT rules--and then pay the higher amount. Originally intended to prevent perceived abuses by a handful of the very rich, it now affects roughly 5 million filers.

In January 1969,...

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Date: 2018-04-05 07:13:02

What's the difference between tax deductions and tax credits?

Deductions reduce taxable income and their value thus depends on the taxpayer's marginal tax rate, which rises with income. Credits reduce taxes directly and do not depend on tax rates. However, the value of credits may depend on the taxpayer's basic tax liability. Nonrefundable credits can reduce tax to zero but any credit beyond that is lost.


An individual tax filer has the choice of...

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Date: 2018-04-05 05:42:55

What is the effect of a lower tax rate for capital gains ...

Throughout the history of the income tax, capital gains have been taxed at lower rates than ordinary income. Since 2003, qualified dividends have also been taxed at the lower rates. Defenders of the tax preference argue that lower tax rates for capital gains and dividends offset the taxes that have already been paid at the corporate level. Some also claim that lower tax rates for capital gains...

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Date: 2018-04-05 12:57:27

How are capital gains taxed? | Tax Policy Center

Capital gains are profits from the sale of a capital asset, such as shares of stock, a business, a parcel of land, or a work of art. Capital gains are generally included in taxable income, but in most cases are taxed at a lower rate.

A capital gain is realized when a capital asset is sold or exchanged at a price higher than its basis. Basis is an asset's purchase price, plus commissions and the...

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Date: 2018-04-05 05:00:51

Related topics : income tax long term capital gains / tax long term capital gains 2015 / capital gains tax rate short term long term / capital gains tax rate long term 2015 / investment capital gains tax rate

What is the child tax credit (CTC)? | Tax Policy Center

The child tax credit (CTC) provides a credit of up to $1,000 per child under age 17. If the CTC exceeds taxes owed, families may receive some or all of the credit as a refund, known as the additional child tax credit (ACTC) or refundable CTC.

How the CTC Works Today

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Date: 2018-04-05 13:05:53

Related topics : child credit tax refund / child tax credit income limit / additional child tax credit / child family tax credit / child tax credit income threshold

How do the estate, gift, and generation-skipping transfer ...

How do the estate, gift, and generation-skipping transfer taxes work?


The federal estate tax applies to the transfer of property at death. The gift tax applies to transfers made while a person is living. The generation-skipping transfer tax is an additional tax on a transfer of property that skips a generation.

The United States has taxed the estates of deceased people since 1916. In 1976,...

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Date: 2018-04-05 06:47:26

Related topics : filing federal tax return for an estate / tax return trust and estate / tax credits deductions and exemptions / tax gift allowances 2017 / inheritance tax gift allowance

What are tax and expenditure limits? | Tax Policy Center

What are tax and expenditure limits?


Tax and expenditure limits (TELs) restrict the growth of government revenues or spending by either capping them at fixed dollar amount or limiting their growth rate to match increases in population, inflation, personal income, or some combination of those factors. As of 2015, 28 states had at least one TEL.

Designing tax and expenditure limits


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Date: 2018-04-05 22:17:27

Related topics : local sales tax rates washington state / local sales tax rates by state / local sales tax washington state / table of sales tax rates by state / government property tax sales

What are the sources of revenue for the federal government ...

What are the sources of revenue for the federal government?


Roughly 80 percent comes from the individual income tax and the payroll taxes that fund social insurance programs (figure 1). Another 9 percent comes from the corporate income tax, and the rest is from a mix of sources.

Total revenues

In fiscal year (FY) 2016 [1] the federal government collected revenues of $3.3 trillion--about...

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Date: 2018-04-05 05:17:14

Related topics : 2016 taxes / past tax year