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Interest payments on consumer loans, including those on credit cards, used to be tax-deductible?
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I do remember when mortgage interest rates were 10 percent, and Jimmy Carter was telling us to wear sweaters IN OUR HOMES. Ah, the good old days.
I do remember when mortgage interest rates were 10 percent...
Only 10? They crested 20 during Goober's reign. The Misery Index took on new heights.
My initial mortgage in '85 was about 17 but was able to re-fi later for substantially less.
The Carter administration years were a long time ago, and I wasn't exactly a "mature adult" at the time.
;)
"The Carter administration years were a long time ago, and I wasn't exactly a "mature adult" at the time." That goes without saying!
"The party told you to reject the evidence of your eyes and ears. It was their final, most essential command." Alfred E. Neuman
as it didn't really affect me. Mortgage interest for many years, however, was a different case.
The 2018 tax law also reduced the amount one could deduct on SALT (state and local taxes).
Some squealed like a stuck pig although it impacts a decided minority.
that is reducing what you can use on your taxes.
The slow erosion of rights, lefts, and our money is always happening.
.
Dynobots Audio - Music is the Bridge Between Heaven and Earth
If anything, we all get to deduct interest whether or not we pay it. Itemized deductions from Schedule A were replaced by the standard deduction as a way to reduce paperwork.
There was no standard deduction before the 1986 tax reform took effect. Personal deductions but no standard deduction.
First year under 1986 reform, my ex-wife and I, our standard deduction was more than we could have itemized on Schedule A.
The problem is not that there is evil in the world, the problem is that there is good. Because otherwise, who would care?
First year under 1986 reform, my ex-wife and I, our standard deduction was more than we could have itemized on Schedule A.
And the 2018 legislation increased the standard deduction for marrieds from $13k to $24k - greatly reducing the expense to maintain and substantiate itemized detail. For 2020, it has increased to $24,800.
Biggest losers? Accountants and tax filing services like H&R Block that thrive on complexity.
No more personal exemptions.
Nevertheless, something like half of all taxpayers with simple returns still have their taxes done by somebody else. I've only done it once, and only because I wanted to e-file and it was back in the day before anybody could do it. I could have paid for Turbotax but it cost less to have a tax preparer do it for me.
We should do things the way some European countries do. If you have a simple return, the government does the calculation (the IRS already has all the information it needs), sends you a letter telling you if you overpaid/underpaid, how much your refund is or how much you owe, give you a time period to contest. No need to even file a return.
The problem is not that there is evil in the world, the problem is that there is good. Because otherwise, who would care?
Edits: 01/13/21
Nevertheless, something like half of all taxpayers with simple returns still have their taxes done by somebody else.Really? I've been using Turbo Tax since the late 80s.
I could have paid for Turbotax but it cost less to have a tax preparer do it for me.
If they charge less than forty bucks for a 1040 and choice of State with electronic submission, go for it!
Edits: 01/13/21
I've been using free fillable forms for well over ten years.
I think the year I had my return e-filed was 2002. There was no free filing then and I couldn't afford Turbo Tax. The cost to e-file was $18 and the woman who did it for me corrected a math error I made on the return. The IRS would have caught that anyway.
That's the only time I ever had somebody else file a return. My parents taught me how to do my own tax return after I had my first summer job in high school, and I've done them ever since.
The problem is not that there is evil in the world, the problem is that there is good. Because otherwise, who would care?
I've been using free fillable forms for well over ten years.Ok, so you aren't using a *preparer* as previously indicated. I've always done my own as well. Oldest brother was a tax attorney. ;)
Unfortunately, my filing requirement are not supported by the free offerings. Guess we earn too much.
E-filing assures faster refunds - when you screw up with planning - and minimizes the spectre of potential fraud. And it is sent from my computer. There is no "somebody else".
Edits: 01/13/21
And only because I wanted to e-file and get my return ASAP. I qualified for the Earned Income Tax Credit (yes, I was that poor) and needed the money to pay my kid's college tuition.
Back to Dynobot's point...do you think it's wise for the government to reward people for running up credit card debt? I don't.
And if I were running the government, your brother wouldn't have a job. I'd eliminate all deductions and credits and treat all income taxed the same, including income from things like capital gains.
In exchange for that I'd make steep cuts in the tax rate. Nobody would get a refund every February but they'd have more money in their pocket all year round.
Do it right, you can cut tax rates but still increase revenue.
The problem is not that there is evil in the world, the problem is that there is good. Because otherwise, who would care?
And only because I wanted to e-file and get my return ASAP.
Understand you can do that without paying a "preparer".
do you think it's wise for the government to reward people for running up credit card debt?
I don't understand the rationale behind that previous concept. Encouraging home ownership and saving is a different thing.
Your proposals would never be supported by all, but I applaud two changes made in 2018: large increase of standard deduction to simply filing (and cost) to a large segment of the population and limits to local tax deductions. It's not the role of the Federal government to subsidize local initiatives.
I would also support a small shift from income tax - not addition - to a national consumption tax that would tap the cash market which is largely exempt from income tax.
I couldn't afford the software. It was twice as much as having the tax prep e-file for me. IIRC TurboTax was forty bucks, but it was only $18 to e-file via the tax prep. Also IIRC, I could have filed for free with the IRS but only if I was using 1040EZ.
Agree on the consumption tax, BTW. And I know most people would not go along with my proposals. They're trained to expect a tax refund every year. Remember the outrage at the beginning of 2018 over the difference in withholding?
The problem is not that there is evil in the world, the problem is that there is good. Because otherwise, who would care?
I still remember where I was when I heard the news report on this. Tip O'Neill--I shook my head in disbelief.
I shook my head too! - Ronald Reagan.... Also started Taxing your Social Security. --- Guess who got the Biggest Tax Breaks?
Guess who got the Biggest Tax Breaks?
Those who pay taxes.
"Guess who got the Biggest Tax Breaks?"
Certainly not the Majority who pay Taxes. And Certainly not the People that pay the highest percentage of their Income in Taxes.
Certainly not the Majority who pay Taxes.
I guess it depends upon your definition of "the Majority" and "highest percentage". :)
Citing The Tax Foundation :
*The top 1 percent paid a greater share of individual income taxes (38.5 percent) than the bottom 90 percent combined (29.9 percent).
*The top 1 percent of taxpayers paid a 26.8 percent average individual income tax rate, which is more than six times higher than taxpayers in the bottom 50 percent (4.0 percent)."
Your post is not relevant to what I said. And only illustrates the corrupt income distribution and Current unfair Tax System. It's not a matter of definition, it's a matter of reading comprehension.Again: "Certainly not the Majority who pay Taxes."
Certainly not the Majority who pay Taxes. And Certainly not the People that pay the highest percentage of their Income in Taxes.
Edits: 01/13/21 01/13/21
Certainly not the Majority who pay Taxes.
I read fine. Let's begin by defining "who pays taxes".
First of all, federal income taxes are paid by only 53% of filers. Call it just over half.
Depending upon your definition of "the majority", that runs from the top 5% to 10%. Which part(s) of the data do you wish to discuss? Share? Average rate?
Slaves never paid Taxes. - Is that your point?
all you've presented is empty and nebulous.
Is there any substance you'd like to contribute?
I used to itemize every year until the 1986 tax reform act was passed. Credit cards, car loans, lines of credit, all that interest was deductible. So were state and local taxes.
The problem is not that there is evil in the world, the problem is that there is good. Because otherwise, who would care?
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