World Bank, Bank Failure, and Artemis II Mission
Tax Policy/News:
March 30: TikTok users spreading tax myths
TikTok is spreading financial misinformation, according to a new report, including five troubling tax myths affecting self-employed workers.
According to Paul Koullick, CEO of tax software developer Keeper, the majority of the software's customers are in their 20s and early 30s and spend several hours a day on social media. A 2021 survey commissioned by Forbes Advisor found that nearly 80% of millennials and Gen Zers have gotten financial advice from social media, with 32% relying on TikTok.
1. If you write off $500 in business expenses, you'll save $500 on your taxes: Contrary to popular belief, tax deductions never offer people a dollar-for-dollar refund; they lower the amount of money people are taxed on, instead. According to tax influencer Alexander "Duke" Moore, they work like a tax credit or a 10% discount on a total purchase, and it all depends on one's effective tax rate or tax bracket.
2. People who rely on their appearance for work can write off appearance-related expenses: Moore said it's very difficult to convince the IRS to write off clothing, makeup, or even cosmetic surgery that can work for everyday use. Sex workers and cosplayers are the most successful at writing off appearance-related expenses, as they often purchase intricate costumes or lingerie that can only be used within the scope of their activities.
3. Lifestyle influencers can write off "lifestyle expenses" like clothing hauls or home decor: Knowing what to write off when one uses personal items for their career on social media can be troublesome, but "aesthetic decor" and fashionable apparel are seldom accepted for a tax refund because they are not absolutely necessary for one's business.
4. You need an LLC to claim write-offs: In fact, all an individual needs to claim a write-off is to prove their company is an actual business. The IRS can identify whether they keep records, depending on the income from their business, or have non-monetary motives behind their activities. But in any case, the report indicates there is no single deciding factor in write-offs, and the federal agency considers every element of the business.
5. You can choose an expensive vehicle to go to work because you'll be able to deduct its full cost the first year it's in use: Moore says this myth is not completely wrong, in the sense that it directly refers to the concept of bonus depreciation, which can be found in Section 179 of the tax code. Until 2023, some workers could deduct 100% of the purchase price of their business vehicle during the first year, if they met certain requirements. The vehicle had to weigh between 6,000 and 14,000 pounds, and the taxpayer had to use it 50% or more for work. Now, workers can only deduct up to 80% of its purchase price.
Economic News/Policy:
April 3: Bank failure fallout is far from over, lawmakers say
Lawmakers in both parties are saying additional congressional action on the collapse of Silicon Valley Bank - including a subpoena of former CEO Greg Becker - is necessary.
Becker sold more than $3.5 million in SVB stock 11 days before his bank was shuttered by U.S. banking authorities, according to a Securities and Exchange Commission filing.
Two days later, Treasury officials announced that depositors at the bank would be bailed out by the Federal Deposit Insurance Corporation (FDIC) at levels well above the $250,000 insurance cap, in some cases into the billions of dollars.
U.S. authorities said they did this because they said the failure of SVB, along with the cryptocurrency-focused Signature Bank, presented a "Systemic risk" to other U.S. banks that could lead to additional bank failures.
Some Democrats and supporters of stricter bank rules believe the loosened regulations could have helped stave off SVB's failure.
April 2: World Bank Warns of Lost Decade for Global Economy
The World Bank is warning of a "Lost decade" ahead for global growth, as the war in Ukraine, the Covid-19 pandemic, and high inflation compound existing structural challenges.
"Across the world, a structural growth slowdown is underway: At current trends, the global potential growth rate-the maximum rate at which an economy can grow without igniting inflation is expected to fall to a three-decade low over the remainder of the 2020s," the World Bank said.
The latest alarm bells from the World Bank about the global economy come in the wake of the U.S.'s passing of the Inflation Reduction Act, which includes hundreds of billions in incentives and funding for clean energy, as well as a law to ratchet up investments in semiconductors.
Weakness in growth could be even more pronounced if financial crises erupt in major economies and trigger a global recession, the World Bank report cautions.
Questions surrounding global growth prospects will be in the air in Washington, D.C., alongside the blooming cherry blossoms at the spring meetings of the International Monetary Fund and World Bank from April 10 to 16.
Measures to boost labor-force participation among discouraged workers and women can help reverse the negative trend in labor-force growth from an older population and lower birthrates, according to the World Bank.
Harvard University economist Karen Dynan said that aging populations in nearly every part of the world would be a drag on global growth, but she was more optimistic about raising productivity-output per worker.
ICYMI:
April 4: What is falsifying business records? Breaking down the Trump 34-count indictment
Former President Donald Trump is facing 34 felony counts of falsifying business records under New York law, according to an indictment unsealed Tuesday.
New York prosecutors alleged that Trump illegally disguised reimbursements related to the Daniels hush money payment as a monthly retainer for legal services, leading to 34 false entries in New York business records.
While falsifying business records is typically a misdemeanor charge, New York law states that it rises to a felony when an individual's "Intent to defraud includes an intent to commit another crime or to aid or conceal the commission thereof."
New York District Attorney Alvin Bragg said in a statement that Trump "Went to great lengths to hide this conduct, causing dozens of false entries in business records to conceal criminal activity, including attempts to violate state and federal election laws."
Bragg said Tuesday that Trump violated “one of New York’s basic and fundamental business laws.” Bragg’s office outlined the timeline of its case in legal documents released to the media.
“From August 2015 to December 2017, the Defendant orchestrated a scheme with others to influence the 2016 presidential election by identifying and purchasing negative information about him to suppress its publication and benefit the Defendant’s electoral prospects,” the case’s statement of facts reads.
"In order to execute the unlawful scheme, the participants violated election laws and made and caused false entries in the business records of various entities in New York," it continues. “The participants also took steps that mischaracterized, for tax purposes, the true nature of the payments made in furtherance of the scheme.”
Trump attorney Todd Blanche criticized the charges Tuesday, calling the indictment a "Political prosecution."
“If this man’s name was not Donald J. Trump, there is no scenario we’d be here today,” he told reporters.
For Fun:
April 4: NASA Reveals Astronaut Crew For Historic Artemis II Moon Mission
NASA has revealed the crew for its upcoming Artemis II mission, which will mark the first time in our species’ history that an astronaut of color, and a female astronaut have ventured beyond low-Earth orbit to visit lunar space.
It has been over 50 years since the crew of Apollo 17 bade farewell to Earth’s moon. Since that final mission of the Apollo program, humanity has retreated back to our homeworld, allowing robotic pioneers to explore the wonders of the solar system as we watched on from the comparative safety of low-Earth orbit.
But the coming decades could see a dramatic shift in the status quo. NASA and its partners have decided that it is once again time for humanity to walk upon the surface of the Moon, and to establish a permanent presence to test the technologies that will be needed for a future crewed mission to Mars.