American small and medium-size companies that rely on China are scrambling to adjust their business plans in response to the escalating trade war.Traderead more
Here are the products that stand to be the most affected by China's new tariffs on $75 billion worth of U.S. goods.Marketsread more
The European Union will respond in kind if the U.S. imposes tariffs on France over digital tax plan, EU chief Donald Tusk told G-7.Technologyread more
The world's second biggest economy is past a point where it cannot ignore its enormous debt anymore, according to an analyst.China Economyread more
Trump said he will raise tariffs on $250 billion in Chinese goods to 30% and hike duties on another $300 billion in products to 15%.Politicsread more
As demand for lab monkeys continues to rise, U.S. scientists are reporting delays in research projects because they can't obtain enough animals, according to the National...Politicsread more
China said on Saturday it strongly opposes Washington's decision to levy additional tariffs on $550 billion worth of Chinese goods and warned the United States of consequences...Politicsread more
Stocks dropped after Donald Trump ordered that U.S. manufacturers find alternatives to their operations in China.US Marketsread more
The final week of August could be highly volatile as markets fret over the economy and the latest developments in trade wars.Market Insiderread more
Federal Reserve Vice Chair Richard Clarida said Friday that the global economy has deteriorated in the past month.Marketsread more
The latest escalation in the trade war ups the odds the economy will fall into recession and that the Fed will aggressively cut rates.Market Insiderread more
A bill aimed at boosting retirement savings could also grant some tax relief to college students.
Last week, the House of Representatives passed the Secure Act with support from both Republicans and Democrats. The proposed legislation, which will go before the Senate, includes a range of provisions to help workers boost their retirement savings.
Major changes include repealing the maximum age of 70½ for contributing to traditional individual retirement accounts, making it easier for small businesses to pool resources and create a retirement plan, and permitting part-time long-term workers to participate in 401(k) plans.
Tucked away in the bill, however, is a provision that would ease taxes on children's unearned income.
The end result is a lighter tax load on children of Gold Star families who are receiving military survivor's benefits, as well as college students with taxable scholarships.
"On average, you're getting a better tax solution," said Mark Mazur, director of the Urban-Brookings Tax Policy Center.
Prior to the Tax Cuts and Jobs Act, kids' unearned income — including interest, dividends, taxable scholarships not reported on Form W-2 and military survivors benefits — more than $2,100 was taxed at the parents' top rate.
This is known as the "kiddie tax."
The tax also applies to full-time students who are between 19 and 23 years of age, whose earned income doesn't account for more than half of their support.
Under the new tax code, kids' unearned income exceeding $2,200 in 2019 is now subject to the same brackets and rates as trusts and estates.
That means once this unearned income exceeds $12,750 in 2019 ($12,500 in 2018), it's subject to the top income tax rate of 37%.
"The idea was to simplify it by having that income go to a separate bucket and tax it at the trusts and estates rate," said Mazur of the Tax Policy Center.
The Secure Act aims to undo this portion of the law and return the kiddie tax to its old treatment.
This spring, Gold Star families found themselves facing steep tax bills as they realized military and Veteran Affairs survivor benefits paid to children over $12,500 in 2018 would be taxed at the same rate for trusts and estates — 37% — instead of the parent's rate.
"Under the previous law, for a family that was low to moderate income maybe those benefits were taxed at 10%," said Mazur.
Those same steep trust and estate brackets apply to students with taxable scholarships that aren't reported on Form W-2.
Scholarships and fellowships are tax-free if the student is a candidate for a degree and he uses the money for tuition, fees, books, supplies and required equipment.
However, those funds become taxable if they are used to cover room, board, travel and optional equipment.
The tax bill on a full-ride scholarship can be devastating to students from low-income families, said Mark Kantrowitz, publisher and vice president of research at SavingforCollege.com.
"The parents might be in the 10% or 15% bracket, but the scholarship pushes them to the 37% bracket," he said. "Since the scholarship is restricted to educational expenses, they can't use some portion of it to pay the tax."
It remains to be seen how the Secure Act will change as the legislation moves through Congress.
The provision in the House bill that would revert the kiddie tax to its old structure is likely to stick around, said Kantrowitz.
"I think this is going to happen," he said. "Nobody wants to see Gold Star families hurt."