What is it gonna be? That my friends is the magical question………my grandfather use to say, “why write a book when a paragraph will do?”
Unfortunately this subject cannot be adequately explain in a paragraph……..so I tapped into the Russian writer in me (that means using more words than necessary to explain the situation)………
This subject needs a series to properly access the situation……
We are hearing a lot about this possible new found path to bi-partisanship……that tax reform could be that new awakening…..to that I say…..you are delusional! Why so?
Dems want a change in rates…that is a continuing lower rate for us mere mortals and a higher rate for those people making $250,000 a year….we all know this has about as much chance of a compromise as me getting a shot at Megan Fox…….
And then there is the clap from the Repubs….that is that we need to reform the tax code and that will increase our revenue to the point that we should be solvent……there are some Dems that gives this approach a nod or that it is worth some discussion……
Okay, let us say that this is the road that the elected parasites want to travel…….now the question is……where will the reform of the tax code come from……from individuals? Or maybe from business would be where to start? A couple of excellent questions…..so let’s look at the things that would be inclusive……..
Let us begin this series with the individual………..
1. Mortgage interest and property taxes.
You can deduct the mortgage interest (not the principal) that you pay on a loan secured by your primary residence or a second home. To claim the deduction, you must be obligated to pay the debt and you must actually make the payments. You can also deduct any taxes you pay on real estate you own that is not used for business. If you have a mortgage on the property, the annual mortgage statement (Form 1098) you receive from the bank should includeboth the amount you paid in real estate taxes for the year and the interest and points you paid for the year (your mortgage interest deduction).
2. Charitable donations.
You can deduct any cash or noncash contributions you make to a qualified nonprofit organization. You are supposed to have documentation for any cash contribution, including contributions under $250. For all noncash (property) contributions and cash contributions over $250, you must have a receipt or acknowledgement from the nonprofit organization. For noncash (property) contributions over $500, you have to file an extra form with your tax return, Form 8283, Noncash Charitable Contributions.
3. Medical expenses and health savings accounts.
You can deduct the amount of your medical and dental expenses that exceed a certain percentage of your adjusted gross income. For many years, the percentage was 7.5%. However, starting in 2013, this percentage goes up to 10% (except for people over 65 years old who are exempt from the increase until 2017). So starting in 2013, if your AGI is $100,000, you can deduct your medical expenses only if and to the extent they exceed $10,000. Eligible expenses include both health insurance premiums and out-of-pocket expenses not covered by insurance for both you and your dependents. Unless your medical expenses are substantial, however, your medical expenses will probably fall below the AGI percentage limitation, meaning you won’t be able to deduct anything.
If you have a qualified Health Savings Account (HSA), you can deduct your contributions to the account, and you don’t have to pay tax on any interest you earn from the account. To establish an HSA account, you must have a high-deductible health plan that qualifies under the HSA rules. You can use money in your HSA account to pay almost any kind of health-related expense.
4. Child and dependent care.
If you have to pay someone to care for your child (under 13) or a dependent needing care so that you can work or look for work, you may be able toclaim a tax credit for those expenses. The credit is a percentage of your eligible work-related child or dependent care expenses, ranging from 20% to 35%, depending on your income.There is a dollar limit on the amount of expenses for which you can claim the credit. The limit is $3,000 of the expenses paid in a year for one person, or $6,000 for two or more. You must reduce these dollar limits by the amount of any dependent care benefits provided by your employer that you exclude from your income.
5. 401(k) and IRA contributions.
If your employer offers a 401(k), it pays to maximize your contributions, especially if your employer matches them. For the 2012 tax year, the maximum contribution is $17,000. If you are 50 or older, you can contribute an extra $5,500 per year.
For IRAs, you can contribute $5,000 in 2012, and deduct that amount from your income. If you are 50 or older, you can contribute an extra $1,000.
6. Student loan interest.
You can deduct up to $2,500 in student loan interest payment per year, for the lifetime of the loan. There are income limits — you can’t take this deduction if you make more than $70,000 as a single person or $145,000 as a married couple.
7. Education expenses.
You can deduct $4,000 for tuition-related expenses, or you may qualify for the American Opportunity Tax Credit (AOTC; formerly the Hope and Lifetime Learning credits), which are also for education.
In addition, you can set up a Coverdell education savings account and contribute up to $2,000 per year. The amount you contribute isn’t deductible, but distributions from the account for payment of tuition are tax-free. You can also set up a state-sponsored college savings plan, known as a Section 529 plan, which allow tax-free withdrawals for qualifed college expenses.
8. Job expenses.
You can deduct education and training costs for your job if your employer doesn’t reimburse you for them (and if the education is for your current job, not to get a better job later). Job-hunting expenses, including mileage, are also deductible. If you’re a teacher, don’t forget to include teaching-related expenses for a small tax break.
9. Home office tax deduction.
If you use a portion of your home exclusively for business purposes, you may be able to deduct home costs related to that portion, such as a percentage of your insurance and repair costs, your mortgage or rent, and depreciation.
Of these deductions….can you see any of them being eliminated? Can you really envision any of these deductions being eliminated from the tax code?
These are not going to be eliminated! Why? Dems will not want to involve the middle class in these solutions.
Then where will the reform come from and who will it effect?
Part 2 tomorrow. Tune in to the continuing story of who gets the shaft and why.
Lobotero,
The federal government is running a trillion-dollar deficit for the fourth consecutive year. Paying for this bloated budget means either raising taxes or borrowing – both of which burden the economy. Since we can’t afford to impede economic development too much, the focus should be spending reduction and not tax increases.
It’s almost depressing to know that a major political party does not understand that masking symptoms does not cure the disease. Solving our budgetary woes will need spending reduction, not just tax reform. Boehner needs to make this clear.
Boehner also needs to make clear that entitlement reform is the only real fix. Entitlements account for more than 60% of federal spending, having doubled in less than 20 years. Reform will be hard, but needed. The public and the cradle-to-gravers must understand that while the Great Society was a well-intentioned program, it’s unsustainable as the population increases.
Republicans will likely take a hit if they push reform, but it must be done if the Republic is to endure. Tocqueville comes to mind: “The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.”
If America continues down the same dark and tattered road, the sordid reality of socialism will become ours. Mankind can have no hope if America falls into this leftist filth.
Stop trying to play the socialism card…no one is listening other than some filth (your word not mine)…..would you like to have a discussion on the tax issue or do you want to continue with the name calling?
I’m all for filth and name calling 🙂 Sadly our country is suffering as a result. 🙁
I use to resort to those tactics but then I realized that I was only trying to change the subject instead of offering some opinion….whether right or wrong……
I’ll stop playing the socialism card just as soon as the left stops dealing it. Secondly, who did I name call? Are you offended that I believe socialism is filth? Why, are you a socialist?
And you may regard the four paragraphs prior to the “filth” remark as a discussion of “the tax issue.”
First, you lost the election get over it……Anytime you call someone filth for what they believe then that is an insult ….but I do not expect you to see it…….you may think that was a discussion but it was not….do you have any thoughts on the upcoming tax reform battle?
I don’t believe I mentioned the election, Lobotero. Perhaps you should quit hittin’ the sauce so hard – and so early.
Second, I didn’t call you filth; I called socialism filth. In fact, I firmly believe that socialism was fished out of a cesspoll in hell.
I gave you my thoughts. Entitlement Reform needs to be the starting point
First, I never said you were specifically talking about me…I said anyone. Second, I do NOT drink but having to read some thoughts make it a possibility…..third, apparently you have no ideas on the big issue of the day……
Lobotero,
Everyone knows that we’re only talking about raising taxes because of our enormous debt, due in large part to entitlement spending!!!!!!!!!!!!!!!!!! Any discussion of taxes MUST take that into account. Because there is no sense – none whatsoever – in raising, reforming, or doing anything with taxes until it is understood by all parities involved that the current spending level is not salvageable.
That, I think you’ll find, is my point!
I think that is the point of all this pretend bi-partisanship……taxes only with reform of entitlements…….I believe that many have been promising that since Simpson-Bowles…..but I think there is nothing to be done on either side……same song all along…
From what I know about Simpson/Bowles, it seems like a good plan. But like I told you before, even Erskine Bowles said Paul Ryan’s plan was “excellent” and that Paul Ryan is a “really intelligent guy.” So while left-wingers like you were hawking the Simpson/Bowles plan, while bashing Paul Ryan’s, Bowles himself was in favor of Paul Ryan’s plan!
All the partisan bickering has to be put aside. Ryan doesn’t want to throw granny off the cliff; he wants to save entitlements for further generations – and it’ll take some harsh cuts to do that. Bowles recognizes this!
Terrance even I have said it was an impressive plan…….personally, do not think it will solve any problems….
Since we are fixated on entitlements……why do you hate them so? I understand the spending side but of all the programs this actually has money coming in monthly and it continues after retirement…..not many other spending programs can declare that….so why do you and yours hate social security and Medicare so much……? There are so many programs that spend with no revenue yet when it comes down to it this is the one everyone wants to reform…..why is that?
Lobotero,
You’re being disingenuous. You know as well as I do that Medicare, Medicaid, and Social Security are growing at unsustainable rates.
Healthcare costs have more than doubled since 1965 – and thanks to the babyboomer generation, Medicare and Social Security beneficiaries continue to increase. Without reform, workers today are paying into broken promises.
Besides, Medicare has never been a fully self-funded program. http://www.cbo.gov/sites/default/files/cbofiles/attachments/43060_Medicare.pdf You’ll see there that Medicare spending is higher than revenue.
It’s the same story with Medicaid. It’s unsustainable. Not only that, it’s a piss-poor health insurance plan that’s destroying state budgets. And so few doctors accept. Also, studies have shown that Medicaid beneficiareis are more likely to die after surgery than those with other insurance coverage. Why? Probably because they’re kicked out of hospitals quicker due to Medicaid’s low provider payment.
It’s always the same with you leftists! Your supposedly well-meaning programs always prove to be yet more inefficient government bureaucracy that plunges the country deeper into debt. These entitlements are a burden on the federal budget and must be reformed.
Terrance You have no ideas beyond what you are told…see I can be as insulting as you…..I keep hoping that you will make a point without the usual bullshit……I was wrong…..that is what I get for expecting people to act and write like that have conviction instead of dogma.
In case you do not make a check….we all pay for Medicare and SS with every check and that continues after you retire…..I asked you a simple question….and I give all the standard BS…..my point was that the programs you hate are funded…maybe not completely but it is cash more than the defense budget brings in…..and when it comes to spending you guys cannot see past what you think is entitlements…..
And the voucher system will protect everyone….is that about it? I would expect a yes answer here because….well just because…..you want to cut spending then let’s call about all spending…but you guys cannot do that…..it is all the programs that benefit people……
It seems you have a bottomless reserve of utter nonsense to share. Ugh.
Everything I said about entitlements is 100% correct. That you fail to realize that Medicare, Medicaid, and Social Security are growing at unsustainable rates is truly independent of the fact that they are – growing at unsustainable rates.
While it’s true that these programs are supposedly paid for by payroll taxes, you fail to take into account the increasing cost of healthcare and beneficiaries entering the system. I flat-out proved with my link to the CBO that Medicare pays out more than what it takes in. Social Security won’t be far behind.
I realize your point, Lobotero, but it’s a useless point. Whether these programs take in money is unrelated to the reality that all are in danger of bankruptcy. They must be reformed to be saved.
You ask why conservatives are so focused on entitlements rather than defense spending? Because defense spending is an absolute necessity that will always burden the budget. We can’t remain a free and prosperous nation, in this day and age, without heavy defense spending. It’s just one of those things that you have to deal with.
Medicare, Medicaid, and Social Security are essential programs as well. But they have to be reformed. I’d even like to expand Medicaid so that it provides Cadillac coverage to all children under the age of 20 (but wouldn’t cut them off if they were fighting an ongoing illness at the age of 20). To do things like that, the programs need reforming.
Oh, yeah, Lobotero, pull that leftwing horseshit. We evil conservatives don’t care about anyone; we just want to give the rich another taxbreak while stepping on the poor. Get a life.
You are completely right….YOU DO have a bottomless vat of worthless crap….Tah!
So, in other words, you have no argument. Gotcha!