"Elizabeth Richardson" <erichktn[at]worldnet.att.net> writes:

- quote -

Please don't buy the lying, self-serving spin of the Congresscritters.
The marriage penalty isn't close to being eliminated. What you
mention is only one small part of the marriage penalty. For example:
* Marrieds can only take $3000 of capital losses, not $6000.
* IRA deducibility phaseouts and Roth contribution phaseouts
for marrieds are less than twice that of singles.
* Tax bracket cutoffs for marrieds are less than twice
that of singles (except for 10% and 15% brackets).
* Roth conversion threshold for marrieds is less than
twice that of singles.
* Itemized deduction phaseout threshold for marrieds
is less that twice that of singles.
and so on.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

Brent D. Gardner, ChFC wrote:

- quote -

There are a number of key caveats that are often slighted
when discussing this matter that I point out to clients.

First, there are rather strict documentation requirements
for the vehicle found at IRC Section 274(d). While the
6,000 pounds gets you out of the depreciation limitation, it
does *not* remove the vehicle from the "listed property"
classification. So there must be adequate contemporaneous
documentation of the business use. Now just what is that?
Well, while Congress indicated back when it was passed that
it doesn't *have* to be a log book, there's no real
indication of exact what will qualify short of that <grin> .

Second, if the business use is less than 50%, then Section
179 is not available and you must take straight line
depreciation on the business portion. If business use
originally is above 50% but then drops below that level, the
taxpayer must "recapture" that excess in the year in which
the use drops below 50% and then recalculate on the straight
line basis.

Third, if the owner is a corporation and the vehicle is now
used by an officer that is an owner/employee, you may be
able to treat all use as business *BUT* then the personal
portion would need to be treated as compensation *AND* be
justifiable as the same.

Fourth, commuting to your office or a regular business
location to/from your home is generally *not* business
use--and the definition of just what is commuting may be far
broader than most clients are aware. Now, if you qualify an
office in the home under Section 280A that problem goes
away, but that's another set of problems and issues.

--
Ed Zollars, CPA
Phoenix, Arizona

"Tad Borek" <borekfm[at]pacbell.net> wrote in message
news:GONwb.24440$AF6.19845[at]newssvr29.news.prodigy.com...
- quote -

I have long been a proponent of no deductions; not necessarily a flat tax,
mind you, just set the rates and let's pay it. The US tax code is not
something around 10,000 pages. No one could possibly know everything it, nor
have the same interpretation of all of it.

Elizabeth Richardson

"HW "Skip" Weldon" <skip5700removethis[at]hotmail.com> wrote in message
news:9g94svg87nguc84f6rg08mqihnjl5u9ejl[at]4ax.com...
- quote -

A whole lot of my business owners have bought SUVs this year that qualify
for the 6,000 GVW requirement. CPAs have been touting this one all year, as
well as local car dealers.

Elizabeth Richardson wrote:
- quote -

Is it though? That's my point, two adults who do that (remain roommates
rather than marrying) get higher std deductions, but that benefit is
offset by higher costs that they pay because they aren't married. If a
tax code is well-designed it would incorporate those kinds of things (I
recently married and our car insurance went down $400/year - same
company, same cars, same coverage).

This an impossible task of course, and it would never be completely fair
to everyone. But there's at least an argument that 2 X HoH is a
more-expensive household to run than MFJ, so you can justify a higher
standard deduction without violating "horizontal equity." Is it $5500
more expensive? Who knows...what are they paying in health insurance?

I think a bigger flaw in the standard deduction is that it's the same
all over the country. An equitable system would allow higher standard
deductions in Manhattan than Laramie. Or it would just do away with
standard deductions entirely and reset the rates accordingly (ie get
less progressive).

- quote -

Right, part of the penalty is going away, but I'm saying that doing so
ignores the original purpose of the old structure. It was easy to pass
when described with that term, but why have standard deductions at all?
Where should they be set? For all those people who paid a marriage
penalty, there was a comparable (but smaller) number that got a marriage
bonus. And when you incorporate "required life costs" outside of taxes I
think there's now a "singles penalty."

- quote -

But most of the tax code reflects policy decisions (life insurance,
mortgage interest, standard deductions, retirement savings, adoption
credits...all reflect social policy preferences). Our taxes are
progressive and things like setting the standard deduction and exemption
levels are just part of that decision-making about its progressive nature.

-Tad

"Tad Borek" <borekfm[at]pacbell.net> wrote in message
news:c0zwb.52342$mc1.35514[at]newssvr25.news.prodigy.com...
deduction
- quote -

A person qualifies to file as HoH by having a dependent child, not by having
a roommate. If there is a roommate, s/he may also have a child which
qualifies for a tax status of HoH. This, of course, would allow the
household to have standard deductions of $14,000, as compared to the 2 adult
household MFJ of $9500. How's that for inequity?

for
- quote -

The "marriage penalty" was removed with this year's tax reform. The standard
deduction for a married couple is now exactly twice that of a single person.
Of course there are financial perks to being married, as your post
addressed, to say nothing of the social perks, but those should have nothing
to do with tax law.

Elizabeth Richardson

I like to clean out my closets and give the proceeds to Goodwill or
St. Vincent dePaul. I get clean closets, a good feeling and a tax
deduction all in one!

Frank



Tad Borek <borekfm[at]pacbell.net> wrote in message news:<p8zwb.52392$Ye1.24742[at]newssvr25.news.prodigy.com> ...
- quote -

"Leigh Menconi" <lmenconi[at]earthlink.net> wrote in message
news:CTuwb.20392$Wy4.2292[at]newsread2.news.atl.earthlink.net...
- quote -

No, my mother didn't have a choice either. I don't think this has to do with
choice, but with treating people equally. I can see no good reason for a
single adult household to be allowed a larger standard deduction than
another single adult household, or that a two adult household should be
allowed less than twice any single adult household. This latter inequity was
corrected this year, and I am surprised the head of household/single
inequity wasn't corrected.

Elizabeth Richardson

HW "Skip" Weldon wrote:
- quote -

If you want to reduce this year's income:

If you're self-employed, get that new computer, furniture, whatever by
year-end and make a Section 179 election on your tax return, allowing
you to write it all off in a single year instead of depreciating it over
some ungodly-long time period.

If you itemize your deductions, pay the last installment of your state
estimated taxes before the end of the year. Do the same if you expect to
owe.

If you are close to the line with miscellaneous itemized deductions
(which kick in only when they exceed 2% of AGI) consider hiring a
fee-based financial advisor and pay him or her handsomely and promptly!!
Or dig up some other 2% item and push it into this year.

Buy an electric car that qualifies for that 10% credit!

-Tad

Elizabeth Richardson wrote:
- quote -

Arguably if it wasn't there, it would be an inequity. Why do we have
standard deductions at all? I think the policy behind it that everyone
needs a certain amount of money to get by, and the gov't doesn't assess
tax on that slice, or some of it anyway (well except Social Security
taxes but that's another discussion!). This is kind of the starting
point of our progressive tax system, it doesn't start at $0 in income,
but at the level of your deductions (an alternative might be doing away
with all of these deductions).

That slice is let's say "X" for a single person. It's higher if they are
"head of household" because by definition they have more costs to cover
than a single person. If someone is married it's not 2X though, because
the couple, we hope, lives together, and gains some dollars-in-pocket
that have nothing to do with the tax code (car insurance, health
insurance, one cable bill) and some that do (spousal IRA). And when we
compare a household containing a married couple to a HoH-qualifying
household...well I think in most cases the HoH-qualifying individual has
a tougher go of it economically - they're supporting the other members
of the household, not getting their support. True it allows deduction
maximization for an HoH who doesn't marry their roommate, but two people
doing that give up the rights and advantages that come with marriage. So
maybe they get a bigger deduction, but they pay more in total to
insurance, and it somewhat balances out.

I'm not saying that the fine members of our legislature actually think
through this kind of stuff but that is at least a policy argument for
having things like a "marriage penalty" and a HoH tax schedule that's
structured as it is. Fortunately we can leave out of the discussion the
issue of whether single parenting is or is not encouraged!

-Tad

"Elizabeth Richardson" <erichktn[at]worldnet.att.net> wrote in message
news:Jyuwb.107319$Ec1.4805962[at]bgtnsc05-news.ops.worldnet.att.net...
- quote -

Single parent doesn't always mean that the parent is divorced or has had
their child(ren) out of wedlock. Some people, like my mother who was
widowed at the age of 31 with 2 young children, do not have a choice about
being a single parent. They get to claim MFJ status for two years (IIRC)
after the death of their spouse if there are dependent children and then
they get the HoH status just like any other non-married parent with
dependent children.

Leigh in raLeigh

"John H. Fisher" <taxservice[at]aol.compliance> wrote in message
news:20031124122501.05539.00002550[at]mb-m16.aol.com...

... . . itemize their deductions.For the 2003 tax
- quote -

With the fixes to address inequities in the tax law, I find it interesting
that US tax law still gives favorable tax treatment to single parent
households over two parent households. How did this one slip by?

Elizabeth Richardson
(who was once a beneficiary of this inequity and thought it bad social
policy then)

In article <9g94svg87nguc84f6rg08mqihnjl5u9ejl[at]4ax.com> , "HW \"Skip\" Weldon"
<skip5700removethis[at]hotmail.com> writes:

- quote -

I like 'em ALL, if I c'n make 'em work!!=

IR-2003-130, Nov. 10, 2003WASHINGTON —

The Internal Revenue Service today reminded taxpayers they have less than eight
weeks to make their final financial moves for the 2003 tax year.Taxpayers can
take the first step toward advance tax planning by reviewing tax law changes
featured on the IRS Web site, www.irs.gov. A little advance planning now could
save taxpayers time — and perhaps even money — later.

For many families, tax planning means locating the IRS notice for their Advance
Child Tax Credit. For teachers, it means keeping those receipts for school
supplies they purchase with their own money. For investors, it may mean
deciding which stocks should be sold or purchased.This summer, nearly 24
million taxpayers received an Advance Child Tax Credit of up to $400 per child
because the credit was increased to $1,000 per child from $600 per child.
People got part of their Child Tax Credit in advance this summer, so they must
subtract that amount when figuring the credit when they complete their 2003
taxes.Taxpayers should have kept their IRS letter (Notice 1319) that notified
them of the amount of the credit they were to receive. Forgot the advance
payment amount? Check IRS.gov under the “Individuals” section for the
online tool, “Where’s My Advance Child Tax Credit?”Also, taxpayers who do
not receive an Advance Child Tax Credit check by Dec. 31 may claim the
increased credit on their 2003 tax return. Again, IRS.gov provides details on
child tax credit eligibility.

End-of-the-year planning may be useful for educators who may claim up to $250
for out-of-pocket classroom expenses, students who may deduct interest on
college loans and spouses who make alimony payments.

These items are among the tax deductions that can reduce taxable income.Some
taxpayers may benefit more by itemizing their deductions on Schedule A of Form
1040. Taxpayers should consider using Schedule A if their itemized deductions
exceed the amount of the standard deductions. On average, approximately
one-third of the nation’s taxpayers itemize their deductions.For the 2003 tax
year, the standard deduction is $4,750 for taxpayers filing as single or
married filing separately, $7,000 for individuals filing as head of household
and $9,500 for taxpayers filing as married filing jointly.Among the common
deductions itemized on Schedule A are state and local income taxes, real estate
taxes and mortgage interest. Charitable donations also are deductible on
Schedule A and taxpayers should keep a record of their contributions. Certain
medical expenses, such as laser surgery or obesity weight loss programs, are
deductible if the total medical expenses exceed 7.5 percent of gross income.

Also, for the 2003 tax year, taxpayers may make gifts of up to $11,000 per
person and exclude the amount from the gift tax. Those receiving the gift are
not required to pay taxes on the amount received.Tax-free flexible spending
accounts also can lower taxable income amounts and the IRS recently ruled
medical spending accounts can be used to purchase non-prescription medication.
Again, taxpayers should keep receipts.

The maximum tax rate for most capital gains taken after May 5, 2003 has been
reduced to 15 percent for most individuals and generally 5 percent for
low-income individuals. Dividends also are taxed at a maximum rate of 15
percent and generally 5 percent for low-income individuals.In most cases, the
expenditures must take place during the tax year in order to be deductible.
However, taxpayers do have time next year to contribute to their Individual
Retirement Accounts. The maximum IRA contribution for the 2003 tax year is
$3,000. Taxpayers who are age 50 or over by Dec. 31 can contribute
$3,500.Taxpayers should consider seeking out additional information either
through IRS.gov or a tax professional.

Related Items:Tax Law Changes — Links to recent tax law changes

http://www.irs.gov/newsroom/article/...109816,00.html

including the Advance Child Tax Credit:

http://www.irs.gov/individuals/artic...111546,00.html


"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

Among my favorites are investment losses in a taxable account
(proceeds to another investment), deductible spousal IRA and
self-employed retirement plan contributions.

Anyone out there have favorites you'd like to add?

-HW "Skip" Weldon
Columbia, SC