Wall Street Journal (Tom Herman): How to Cut Your Tax Bill:
Millions of taxpayers still have time to take steps this year to cut their federal income-tax bills. Here are a few ideas in question-and-answer form. I will offer more in next week’s column.
Washington Post: Tax-Free Bonuses Tagged Out:
Where there’s a will there’s a way, the old saying goes, but when it comes to ducking taxes it’s more like, where there’s a way someone will. Thus it is that the Treasury Department discovered not long ago that some taxpayers have been dusting off an old Internal Revenue Service ruling about signing bonuses in baseball contracts and using it to justify skipping payroll taxes and income-tax withholding on signing bonuses generally. Similarly, some unions and employers have been using that and other old IRS rulings to avoid payroll and withholding on ratification bonuses that sometimes are offered as inducements to union members to approve a new contract. In both cases, recipients are liable for income taxes when they eventually file their returns, but they and their employers can escape Social Security, Medicare and other such payroll taxes entirely. "It’s a nice way to save some change," a Treasury official said. So last week, Treasury and the IRS slammed that particular door shut.
Washington Post: Tax Reform Veterans See Hurdles Ahead:
The two primary architects of Congress’s last major tax reform say President Bush so far has failed to lay the groundwork for his ambitious tax agenda and will have to invest a vast amount of political capital to succeed in broadly simplifying the tax code. Former representative Dan Rostenkowski, an Illinois Democrat, who chaired the House Ways and Means Committee during the battle over the 1986 tax reform act, and former senator Robert Packwood, a Republican from Oregon, who headed the Senate Finance Committee, disagree on the ultimate prospects. Rostenkowski gives tax reform little chance while Packwood is more sanguine. But both say the president must quickly get beyond rhetoric and say what he wants to do.
