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A partnerhsip with Turkey will help US efforts to destablize ISIS in Syria.  The Turks, after ISIS attached their troops, cleared the way for the US to use an air base near the southern city of Adana to launch airstrikes on Syria. The presence of American bombers gives Turkey some protection against invasion and lessens the chance that ISIS will win control of strategic areas inside Syria

​SYRIA

More states, pushed by medical providers, will expand Medicaid eligibility in the coming year, now that the Supreme Court has upheld Obamacare. Some Republican governors were waiting, hoping for a ruling in the other direction.


First up Alaska In a few month ,it will become the 30th state to sign up for federal money to cover the cost of enrolling folks within 138% of the poverty level. For an individual participant, the cutoff is an annual income of about $16,200. The feds will pay 100% of the costs through 2016, 95% in 2017 and 90% in 2020. Likely to follow: Utah, Wyo. La. Ga. and Va. Their plans will need an OK from Uncle Sam because the will be customized.  So far , all waivers have been . Pa's plan which received a federal waiver, will be replaced, will be replaced by traditional Medicaid, now that Democratic Gov Tom Wolf is in office  The transition is likely by Sept 30


Coming soon: New rights for Medicare patients who are in the hospital. President Obama will sign legslation requiring hospitals to make clear to patients when they are receiving "observation" care but have not been admitted. The distinction is important. Medicare Part A does not pay for observation care and will not cover rehab programs in a nursing home unless someone is an inpatient for at least three days.  Patients can use private coverage, but not everyone has it.


Hospitals are boosting their use of observation care in place of admissions as they come under pressure from Medicare to curb unnecessary hospitalizations. Attempts to broaden coverage are not likely to fly. One bipartisan measure in Congress, which would count time under observation toward the three day stay  to trigger medicare coverage will probably stall because of the expected high cost.


Also on the way, updated rules for nursing homes with folks on Medicare and Medicaid. The rules are coming from the Dept of Health and Human Services. and will apply to about 15,000 long term care facilities and 1.5 million patients. Among improvements: Stronger controls to prevent infections. Less use of antibiotics.  Stepped up training for nurses in dementia care and other areas. More freedom for patients to choose roommates, as well as added dining choices. families will get more say to care planning and more info about the discharge process.

HEALTH CARE

Major and overdue changes are coming to the nation's toxic chemicals law. Look for Congress to pass an overhaul of the Toxic substances Control Act and for Obama to sign the bill by year end, marking the first update of the TSCA since it was enacted in 1976. The law affects manufacturing and other industries.

Bipartisan legislation calls on EPA to speed up reviews of various chemicals, likely cutting the time to conduct a chemical risk assessment to seven years or less. Over the years, some chemicals have languished in the review process for 20 years. Manufacturers will gain the right to petition the agency for a safety check of a chemical that it is not already planning to review, in hopes of getting EPA to declare it safe, along with an assurance that the agency will not change its mind later. If EPA grants such petition, manufacturers will be on the hook to cove the costs of a review, whcih can run into millions in some cases for complex chemicals. Congress is likely to grand father state laws, notable Califorina Proposition 65 which is aimed at protection state drinking water sourced from toxic substances.  Some 700 new chemicals entering the market each year, the law's revision is intended to give EPA the right to preempt state jurisdiction over new entrants.

CLEAN AIR ACT.

Major and overdue changes are coming to the nation's toxic chemicals law. Look for Congress to pass an overhaul of the Toxic substances Control Act and for Obama to sign the bill by year end, marking the first update of the TSCA since it was enacted in 1976. The law affects manufacturing and other industries.

Bipartisan legislation calls on EPA to speed up reviews of various chemicals, likely cutting the time to conduct a chemical risk assessment to seven years or less. Over the years, some chemicals have languished in the review process for 20 years. Manufacturers will gain the right to petition the agency for a safety check of a chemical that it is not already planning to review, in hopes of getting EPA to declare it safe, along with an assurance that the agency will not change its mind later. If EPA grants such petition, manufacturers will be on the hook to cove the costs of a review, whcih can run into millions in some cases for complex chemicals. Congress is likely to grand father state laws, notable Califorina Proposition 65 which is aimed at protection state drinking water sourced from toxic substances.  Some 700 new chemicals entering the market each year, the law's revision is intended to give EPA the right to preempt state jurisdiction over new entrants.

​CHEMICALS SAFTEY

Expect more partnerships between American and Chinese tech companies. Such hookups are being forced by Beijing's move to assert more control over the tech sector in a bid to foster more homegrown tech in the name of security  Doing business in China has become much tougher for sellers of computer technology since the 2013 leaks from Edward Snoden revealed extensive US spying there.

The tie ups will enable US firms to keep tapping China's huge market while complying with its new security regulations. Hewlett-Packard, for example, has teamed with Tsinghua Holdings to produce a range of IT hardware and software. Eventually, China wants to rid itself of foreign tech as much as possible. One of its goals is to eliminate the need for any foreign computer chips by 2030

​TECH

​Private investors are betting big on a growing industry: Learning technology  Developers of online classes, educational video games, mobile apps and such have netted over $2.5 billion in global private investments in 2015, more than the total that investors put into learning technology in all of 2014. That is just the beginning, investors see potential fro growth  in product that reduce the need especially in emerging markets with lots of potential users, such as China and Brazil That bodes well for tech vendors such as Mapbox, Udemy and Virgiin Pulse. Makers of textbooks face dwindling sales as more students use digital gear.. Today's college students already spend 20% less on materials than they did in 2007.

​EDUCATION

With General Motors, Ford and Fiat Chrysler tinging up profits again : Contract negotiations with the United Auto Workers are sure to be difficult. as union leaders push to reward their members for concessions given in leaner times. Talks will accelerate after Labor Day, with UAW choosing one of the Big Three, GM or Ford, most likely to deal with exclusively to set a pattern for the other two. The union has more muscle that it has had in nearly a decade.  In fact a strike can not be ruled out at any of the companies if management holds a hard line In The best possibility for a strike is at Fiat Chrysler, and it would not be short. Its workers earn less than their counterparts at Ford and GM because profit sharing  is less generous than at the other two.  The company also has the highest share of entry level employees,  so a push to squeeze the lowest paid tier of auto workers would hit Fiat Chrysler the hardest, providing the impetus for worker there to walk.

The industry's two-tier wage structure will be narrowed but not eliminated. Veteran workers are sure to win pay   increases the first in 10 years. Raises for the top tier auto workers are a must for the contracts to get ratified. Health care looms as a major sticking point.  It is the largest benefit cost to auto firms and employees do not pay any premiums or deductibles for their care. Though management will seek concessions from workers , the UAW will hang tough

The union has another reason to dig in: Michigan is now a right to work state.  If  the UAW fails to produce a favorable contract, it risks seeing membership slide. About have of today's Big Three autoworkers in Michigan are members of the Union

​UNITED AUTO WORKERS

Istagram's mobile ad revenues will top a whopping $2.8 billion in 2017, a nearly five fold increase from $595 million this year. Most of the growth sill come from US sales, though the social media site is also scoring internationally. advertisers are flocking to the networking service because of its vast appeal to millennials ages 18 to 34. Over 50% of millennials use it to post photos and videos. Marketers hope that their ads will cement brand awareness and long term loyalty. The site is also testing a buy button that allows user to purchase goods. Whether enough millennials will actually warm to shopping on Instagram is debateable

​ADVERTISING

Do not miss out on this tax break, if you use a flex plan for child care costs.  You can still claim the dependent care credit to the extent your expenses are greater than the amount you pay through your flexible spending account. The maximum dependent care costs funded through an FSA are $5,000. The credit applies to am much as $6,000 of eligible expenses for filers with two or more children under age 13. In that case you would run the first $5,000 of dependent care costs through the FSA, and the next $1,000 would be eligible for the credit on Form 2441.  For most filers, taking the dependent care credit will save an extra $200 in taxes. 

If our school age child is going to a summer camp the cost qualifies for the dependent care credit. If you send your child to any special day camps such as those for sports, computers, math or theater, you do not get the credit. Ditto for camps to help with reading or study skills. The costs of summer school and tutoring programs are not eligible for the credit, they are treated as education, not care

​CHILD CARE

A firming housing market  and growing consumer confidence, along side nearly five years of steady job  creation suggest the US is resilient enough to weather the forces rolling stock prices and hurting commodity producing countries reliant on China as an export market.  

Instability in China and concerns about a Federal Reserve rate increase in coming months have caused turbulence in US and other markets. But the turmoil does not mesh with the domestic economy's fundamentals 


US consumer confidence rose in August to its highest level since January, reflecting optimism about an improving labor market. New home sales picked up the pace in July, rising 21% from a year earlier. Home builder sentiment is at its highest level since November 2005.

​HOUSING

Fannie Mae wants to make it easier for working class and multigenerational households to get a mortgage The mortgage-finance company said tuesday it would roll out a program this year that lets lenders include income from nonborrowers within a household such as extended family members toward qualifying for a loan

The move is expected to open up mortgage access to a segment of the population that does not fit the fypical family structure and has had trouble obtaining mortgages. In households of some minority groups such as Hispanics it is common to have extended family members contributing income toward the cost of housing, though until now that income could not be used to help qualify for a loan.

The new program which is open only to low income borrowers or those living in low income or minority dominated areas  will also in some cases let borrowers who do not live in the home, such as parents contribute income.  familes with boarders will also be allowed to count that rent toward qualifying.

​Fannie Mae officials said their research indicasted that extended households have incomes as stable or more stabe than other kinds of households at similar income levels

​FANNIE MAE

Though consumer sentiment is on the rise, credit card use will stay muted. After tumbling during the recession, the credit card balances folds carry are rising at an annual clip of only 3% to 4%. That threathens to hold back spending on all sorts of everyday purchases that would normally fuel brisker economic growth

Part of the shift is generational consumers who grew up during the recession will be more likely to reain wary abouth their finances and keep credit casrd debt low, much as people who grew up durint the Great Depression look askance at debt. Part is the reult of changing spending patterns. Folks now spend more on autos and education, and the loans needed to finance them Car sales will not slow until 2017 at the earlierst, and young people will continue to view education as the key to landing a good job. That means more auto and school loans and less plastic

THE ECONOMY

After opening a new embassy in Cuba the US wants to further encourage trade with Havana after a half century of frozen relations.  The decades old embargo will not end just yet but ways around the ban will be found.  The next steps in fostering commercial ties is loosening limits on US travel to Cuba, which is already up 35% in 2015. More charter flights are likely, and the feds have signed off on ferry service connecting Florida and Cuba for the first time in 54 years. Commercial flights will come in a year or so.

Easier shipping, US Law bars foreign ships that have docked in Cuba from calling at a US port for 180 days. The Treasury Department often grants waivers to ships carrying foodstuffs, and will soon do likewise for other vessels to encourage more trade with Cuba. Also more financing of US exports to Cuba. Current law requirs transactions to be done in cash, but President Obama could loosen that rule this fall.

Bigger trade changes need to wait longer. Only Congress can fully lift the embargo. Other nations are scrambling to expand in Cuba before the US does. Russia, China, and European Union are especially keen.  Visitors to Cuba now find hotels owned by Spanish and Canadian firms and computers made in China. The EU wants to sign a trade pact with Cuba  by year end. China has inked 29 deals with Havana on credit and trade, and is now Cuba's second biggest source of imports and longtime ally Venezuela.  Russia has written off most of Cuba's Soviet era debts and is letting Havana repay the rest by developiing Russian project on the island.  US businesses will have to play catch up once the are given the green light. Havana is encouraging foreign forms to invest now, before the Americans come.

​CUBA

On IRS's wish list for the future, Offering taxpayers more online services. For example, givng them the ability to access their accounts  electronically to rerview of they have a balance due, check their tax history and make on line payments. Letting them self-correct their returns and update their names and addresses online. Allowing them to send secure electronic correspondence to the IRS & vice versa

​IRS WISH LIST

​Getting a 1099 form does not mean you have income for that year.  A retired football player helped co-found and operate a nonprofit organization. He charged personal expenses on the charity credit card. when he left the group, it sent him a 1099 for that year reflecting that he had taxable income from charges incurred several years earlier that he had not paid back.  According to the Tax Court, the unpaid advances , but only for the tears in which they were not repaid. Since the 1099 was issused well after that it is invalid So in all likelihood the Service will not be able to collect tax on the unpaid advances. because the statute of limitations had run out.

​TAX FORM 1099

IRS computers are not programmed to sniff out only undereported income. They flag over reported income.. A low income filer with very little wage income claimed she made a $17,000 profit from a side business. selling used clothing at a flea market. The $2100 self employment tax  on her profit was dwarfed by the $8,000 in additional child tax credit and earned income credit tha the extra income made her eligible for. The IRS computers froze her refund and she could not substintiate a large chunk of her profit, so the Tax Court decided she was entitled to take jut $700 in credits

​TAXES

A Uber driver is an employee of the company a state agency decides. The firm claimed the driver should be treated as an independent contractor because she used her own vehicle to transport customers. The company asserted that supplying the driver with leads of people needing transportation did not indicate that it excercised control over her activities. The agency said the firm had control over her because it screens prospective driver and requires them to use vehicles that are 10 years old or less. Since the driver is an employee, Uber must reimburse her for mileage and tolls. The decision is on appeal

​BUSINESS TAXES

Businesses that sell marjuana have a heavy tax burden, as this case shows. They are taxed on their income but cannot write off their business expenses, such as rent   A taxpayer in Calf. ran a center where users of medical marijuana could purchase and consume the drug and socialize. Even though it is legal in Calif to sell and use medical marijuana an appeals court said US tax law bars write offfs for sellers of controlled substances that are illegal under federal law. The only exception is that these firms can deduct the cost of the marijuana.

​MARIJUANA

​GIFTS

Make sure to use your gift tax exclusion. This year you can give up to $14,000 to a child, or other person without gift tax consequences. If you are married, your spouse also can give $14,000 to the donee, doubling the tax free amount to $28,000. The exclusion is going to remain $14,000 next year too. If you do not use up the full exclusion amount this year, any shortfall is lost.  Some other gift giving strategies pack an additional bang for the buck. Direct tuition payments for students get two tax breaks. They do not count against your estate and they do not count against the gift tax exclusion. The same rule applies for direct payments of a person's medical expenses.

Turbocharge your donations to charity by giving away appreciated assets, such as stocks. The appreciation escapes capital gains tax and you get a deduction for the full value in most cases, as long as you owned the asset for more than a year. Do not donate an asset that has declined in value, the capital loss is wasted. you are better off selling the asset and donating the proceeds.

​It is still a long shot, but chances of corporate only tax reform are growing, amid talk about a special tax rate on the business income of individuals. If the change is made, the top rate on the business income of S corporations, partnerships, sole proprietorships will equal the new corporate rate, probably 28%. Now income from such companies is taxes at individual tax rated, so corporate reform without any change in taxing business income of indviduals would leave many owners of unincorporated firms paying more than corporations.

​BUSINESS TAXES


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