President Joe Biden has discussed a proposal that would target billionaires in his 2023 budget. The proposal calls for a new minimum tax, forwardly named the “Billionaire Minimum Income Tax.”
What exactly is the Billionaire Minimum Income Tax?
This tax would assess a 20% minimum tax rate on US households worth more than $100 million. However, over half the revenue would likely come from households bringing in more than $1 billion of income.
The proposal document states, “This minimum tax would make sure that the wealthiest Americans no longer pay a tax rate lower than teachers and firefighters.”
Wealthy households that already pay 20% on their full income won’t pay any additional tax under the Billionaire Income Tax proposal. However, if they pay less than 20%, they will be expected to meet the new minimum.
What will the Billionaire Minimum Income Tax accomplish?
The proposal was created as part of Biden’s new spending plan, which is expected to reduce the deficit by $1.3 trillion over the next ten years. About $360 billion of that would be due to this new levy proposal.
In 2021, the federal deficit totaled nearly $2.8 trillion. Should this proposal pass through Congress, we could see nearly half of the deficit decrease over the next ten years.
When would the Billionaire Minimum Income Tax be enacted?
There is still uncertainty surrounding Congress moving forward on Biden’s proposal. Last year, Senate Democrats proposed a billionaires’ tax that ultimately didn’t proceed.
As Congress continues to discuss and debate the new billionaire tax proposal, Optima will update our readers and clients accordingly.
For tax debt assistance, call Optima at (800) 536-0734 for a free consultation today.
Due to the COVID-19 pandemic, millions of US workers lost their jobs. While some were able to return to work in 2021, approximately 25 million people received unemployment benefits and didn’t withhold taxes. The IRS is now looking to collect back taxes for the $325 billion in total benefits and mailed millions of large tax bills this season.
Withholding Unemployment Tax
Most states and the federal government consider unemployment benefits taxable income. You should withhold federal taxes on your unemployment in order to avoid a bill the following tax season.
In 2020, there was a tax break that allowed millions of Americans to owe a lesser amount of tax, or not owe tax at all. However, as the IRS has steadily made efforts to return to normal enforcement activity since 2021, there was no such tax break this year.
What happens if you don’t pay taxes on unemployment benefits?
As with any tax liability, you will receive a tax bill from the IRS via mail. Should you not reach out to the IRS or pay the bill by the end of the tax season, you could face enforcement consequences such as a levy or lien, accrue interest, and lose eligibility for a refund after filing a return.
What to do if you owe taxes for unemployment benefits
If you owe taxes on your unemployment benefits and can’t afford to pay it back in full, you have a couple of options. The first option, if your tax bill isn’t too high by your means, you can contact the IRS to set up a payment plan. This option allows you to negotiate how much you will pay monthly until the bill is paid.
Should you find that your liability is too high for you to pay back or you’re facing hardship that doesn’t allow you to afford your payment options, consider seeking professional assistance such as Optima Tax Relief.
At Optima, we assist clients who owe state and federal taxes, including individual, joint filers, and business filers. Give us a call at (800) 536-0734 for a free consultation today.
Comparably’s Best HR Teams list recognizes the nation’s top HR departments. There are over 299,440 Human Resources Managers currently employed in the United States, and Optima is proud to announce that our HR team has ranked in the Top 50!
About Comparably
Comparably is a leading workplace culture and corporate brand reputation platform with over 15 million anonymous employee ratings on 70,000 companies. Comparably awards are based on feedback provided by current employees in several categories. Workplace culture categories included the following:
Compensation
Leadership
Co-workers
Work-life balance
Professional development opportunities
Perks and benefits
Executive Team
Retention
Happiness
Meetings
Diversity
Team
CEO Rating
Manager
eNPS
Gender
Overall Culture
Office Culture
Of nearly 20 different categories total, all ratings were provided from March 2021 through March 2022.
Optima’s HR Team
Optima’s Associate VP of Human Resources Kimberly Carson shared her experience working with Optima, saying, “When I came to Optima, I was provided the opportunity to build almost an entirely new HR department/team. We have been incredibly blessed for the way that both the current and new HR team members have come together to show support for one another in working as a team, to be selfless and supportive every day, and exhibit a true love for life and positivity. I wake up each day excited to work with this team, and I feel incredibly honored that their efforts are being recognized for all the great work they do to make it the best department! I could not be prouder of our team!”
Optima is just as honored to have the great support system that is our HR department. We look forward to our company’s growth and improvement in all categories for next year’s list. Congratulations on this well-deserved recognition!
The state of the economy can be detrimental to your IRS or state tax liability. What exactly happens to your tax debt during inflationary periods? CEO David King and Lead Tax Attorney Phillip Hwang discuss the difference in interest rates, deadlines, and what to do if you find yourself in this circumstance.
The inflation is directly affecting drivers and daily commuters alike with skyrocketing gas prices. In California, the average cost for regular gas is now up to $5.82, or $6.21 for premium. Recently, the government has decided to step in on federal and state levels to alleviate costs and provide support to the public. This has led to the creation of a new gas stimulus, which would support households that own vehicles.
Gas Rebate Act of 2022
The Gas Rebate was introduced by Reps Mike Thompson (CA-05), John Larson (CT-01), and Lauren Underwood (IL-14). The bill calls for an energy rebate of $100 per month, plus another $100 for each dependent for the rest of 2022.
“The Putin Price Hike is putting a strain on our economy,” Thompson said, “and I am proud to be working with Reps. Larson and Underwood to introduce this legislation to provide middle-class Americans with monthly payments to ease the financial burden of this global crises.”
The stipulation is that the average gas prices must exceed $4.00 per gallon; meaning, if at any time during the year the gas prices drop to an affordable price, then the stimulus check would not be dispersed that month.
What are the requirements to be eligible for the gas stimulus check?
Single filers earning less than $75,000 and phases out to $80,000
Joint filers earning less than $150,000 and phases out at $160,000
If you earn more than $80,000, you could still be eligible for a smaller amount.
Gavin Newsom’s Gas Proposal
Governor Newsom proposed $400 per vehicle in direct payments for California taxpayers. The maximum is two cars per household. The proposal calls for the use of $9 billion of the state’s budget surplus to provide the $400 rebate.
Optima will continue to follow news on the Gas Rebate Act of 2022 and Governor Newsom’s proposal, and update our readers and client accordingly.
At Optima, we help clients that are facing tax debt in their journey to a resolution. Give us a call at (800)536-0734 for a free consultation today.
