The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: Investment Income Surtax||Date: 12/2/2012 3:30 PM|
|Author: wrjohnston91283||Number: 117046 of 122007|
An interesting experiment. Poll your acquaintances about what income tax bennies they're willing to give up. Start with the mirror.
Derailing the thread...
For 2012 I'm benefiting from the following:
-one of the many higher education tax breaks (lifetime learning, not hope credit, tuition/fees deduction or interest deduction)
-one of the child tax credits (the regular one, not the additional or the EITC)
-one of the several dependent care benefits. Next year I'll take both the dependent care FSA, and the dependent care tax credit (not on the same expenses of course)
-medical FSA (but not the medical itemization deduction
-various other exclusons from my wages before they even hit my W-2 (401k, health care excemption). I choose to use my 401k as my retirement benefit, but I also have a Roth IRA, and have used a non-deductible traditional IRA in the past.
Not even including the lower tax rates from the 2001/2003 acts, 2% FICA tax cut, dividend tax cut, etc).
I'd give up some of the dollar amount of these benefits if they were more simplified, easier to understand and uniform to all tax payers.
The FSA's require my employer to offer them. Untie them from employment and let anyone take the deduction.
Offer ONE higher eduction tax break (I'd go with the tuition and fees deduction capped at $1,000 PER CREDIT myself, even if this doesn't give the same dollar benefit I get now, its easier to understand.)
Simplify retirement tax breaks - again, 401ks require employers to offer; and I have a magnatude of choices (and self employed have even more). I'd like to see the 401k contribution limit and the IRA limit the same. Keep 401ks and IRAs (traditional and Roth) and give all other retirement options a look to see if they can be taken off the books.
People often complain that tax prep costs money. I find (and I imagine that many people who have savings / are able to save) that understanding the vast number of breaks and types of accounts available is more complex than actually preparing my taxes (and I have a finance/accounting background).
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