Unless they have significant other deductions, the mortgage-interest deduction might not be worth holding on to.
Interest can pile on pretty quickly and together with other deductions, can edge you over the standard deduction limit.
For most taxpayers, calling a boat a house beats the alternative: taking depreciation and other deductions by using it for business entertaining or chartering.
There has also been suggestions from the Republicans that a dollar limit be established for all deductions, for charity, interest on mortgages and other deductions.
The precedent has already been set for Schedule A deductions to gradually phase out at higher income levels as well as the value of dependents and other deductions from taxable income.
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An excellent solution, for landlords who can afford to do so, is to pay off enough of the mortgage so that the house edges into the black and no depreciation or other deductions go to waste.
None of the other deductions are allowed.
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In March, a Tax Court Judge ruled that a UPS (nyse: UPS - news - people ) driver could be hit with back taxes after the three-year limit had expired because his tax preparer had claimed fraudulent charitable and other deductions on his return--even though the IRS never asserted the truck driver himself meant to commit fraud.
But such losses are not subject to the same floor (2% of adjusted gross income) that limits other miscellaneous deductions.
Qualifying tuition is grouped with other miscellaneous itemized deductions, subject to a disallowance equal to 2% of adjusted gross income.
Based on your new mix of income and deductions other income and gifting strategies will be deployed in future years depending on the law at that time.
There are a series of other pieces of his revenue proposal that deal with some reform measures, like capping deductions and other issues, and then there would be a separate or additional tax reform process that is something that both sides have sought in a so-called two-stage deal.
IRS, they remain fond of their mortgage-interest tax deductions and other subsidies.
If they expect that Congress will cut back on itemized deductions and other tax preferences, they might want to give more to charity or prepay state and local taxes.
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The biggest deduction that most people worry about losing is the one for home mortgage interest, a holdover from when the deductions for other forms of interest like credit cards and auto loans were eliminated in the 1986 tax reform law.
Yes, some lawyers are needed if for no other reason than to figure out how new loopholes, deductions, credits, and other provisions can be integrated into Rube-Goldberg monstrosity of existing law.
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Linney is using a remainder trust, among other techniques, to maximize deductions and provide financial flexibility (see box, p. 188 ).
Other TV anchors said her deductions were OK. Even the tax professionals who did her returns expressed no doubt, treating the deductions as legitimate.
The IRS statistics on which my survey is based have been published for many years, and other sources report on average deductions for each income range.
Although the law prohibits one spouse from itemizing deductions if the other spouse claims the standard deduction (section 63(c)(6)(A)), registered domestic partners are not spouses as defined by federal law and this provision does not apply to them.
In other words, non-charitable deductions were almost twice as significant to the arguably rich than to the very rich.
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The other important rule is that your deductions for all appreciated property (including art and stocks) can't exceed 30% of your income, although you may carry over unused deductions for five years.
The AEI analysis warns that these numbers change from year to year, but it concludes that by eliminating these two deductions and a few other smaller ones, Mr. Romney can make his math add up.
So even though the rate is high, companies can enjoy a low effective tax rate by using various credits, deductions, exemptions, and other preferences.
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The proposal is part of a larger plan that would reform the federal tax code, lowering the corporate tax rate from its current 35% while cutting deductions, credits, and other breaks.
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That meant getting rid of deductions, loopholes, credits and other tax preferences, and lowering the rates.
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That means contributions to 401(k)s and other retirement plans, as well as itemized deductions for charitable giving, mortgage interest and state and local taxes would be hit by the 28% limit and municipal bond interest would only be exempt at the 28% rate.
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But on the other, you suggest ending mortgage-interest tax deductions, doing away with Fannie Mae and Freddie Mac without replacing them with support for long-term, low-interest mortgages, ending exemptions on capital-gains taxes, and requiring up to 15% down payments on homes from first-time buyers.
Other possible red flags that could trigger an audit include deductions for either a home office or maintenance of a rental property.
The package would allow religious groups to compete with secular organizations for federal dollars to pay for after-school programs, drug treatment counseling, meal assistance and other programs: In addition, they include broader tax deductions for Americans who make regular charitable donations.
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