What the heck will they come up with next?

[kathyc2]

It's not in legislation, but just an example of pols that no idea of the real world.

https://www.fox5ny.com/news/new-stim...acation-credit

[ATSMAN]

If Pres. Obama could give tax credits to take junk cars off the road and buy new cars to boost economy, then Pres. Trump can also give tax credits to boost economy and since he came from the hospitality business that is what he favors!

But I seriously doubt if Congress would pass a second stimulus bill with more cash to citizens except perhaps extending the $600 extra UI benefit to certain states where there is real high unemployment. Even that is far fetched.

[kathyc2]

Cash for clunkers didn't involve the 1040 or a potential of dozens of receipts.

[ATSMAN]

Cash for clunkers didn't involve the 1040 or a potential of dozens of receipts.

But the goal of that provision was to stimulate the economy by giving the taxpayer a tax break. There are 1001 ways to do this. Some may involve an "entry" on a tax form or some may work as a default option (sales tax waiver for certain purchases) etc.

In my state every August they have a sales tax holiday for certain purchases for a weekend. The appliance stores tell the media that they do almost 50% sales of large appliances that weekend. I too purchased my Fridge and Dishwasher in one of sales tax holiday weekend several years back.

I am not opposed to any stimulus as long as it achieves the intent. Govt. has to think smart and logically what motivates taxpayer behavior and tap into that with a surgeons knife!

[kathyc2]

I posted it as I see it as a paperwork nightmare for us.

[Rapid Robert]

If Pres. Obama could give tax credits to take junk cars off the road and buy new cars to boost economy ---- to stimulate the economy by giving the taxpayer a tax break.

The Consumer Assistance to Recycle and Save Act of 2009 (CARS) was not a tax credit or any kind of "tax break". It did not depend on having a tax liability to be of benefit. It was an electronic voucher to the dealer, who also had to ensure the traded-in vehicle was crushed or shredded, and it was taxable gross revenue to the dealer (but the not purchaser). It was only in effect for purchases within a four month window. In short, it was designed to accomplish a specific goal (goosing the auto industry, removing fuel inefficient vehicles from the road) in a specific time frame with measurable results, in the least burdensome way possible.

The "Vacation credit" is a really stupid idea (or as kathyc2 put it more diplomatically, "example of pols that [have] no idea of the real world"). Even if it became law (thank goodness it won't) it would only benefit higher-income taxpayers, those with a higher tax liability who could afford to take enough time off from work and family responsibilities to take a vacation, let alone enough income to pay for even 50% of it. These are people who would be spending that money anyway, tax credit or not. Meanwhile people working minimum wage just to put a roof over their head and food on the table would get no benefit at all.

[ATSMAN]

The bottom line is Govt. comes up with ways to "stimulate the economy" . As we all know the American economy is consumer driven. If consumers don't spend the economy tanks! Govt. and industry have to figure out how to get people to spend more to get us back out of this hole!

[Dude]

If they include "staycations" anyone with a tax liability who has eaten at a restaurant benefits. Maybe this is a step toward making credit card interest deductible again. That sounds stimulating

[ATSMAN]

Making consumer interest deductible may be another idea that has a 2nd life now to stimulate the economy. May be give an above the line deduction capped at a certain dollar amount without itemizing.

[Burke]

As soon as you start granting "above the line" deductions, you negate the increased standard deduction which was supposed to benefit most people with a deduction above and beyond what they normally would use on their tax return by itemizing, which simplified the tax return for millions. We already have one for next year as I understand it, for a certain amount of charitable contributions. Why not just increase the standard by a set amount? Or bring back exemptions? Or increase the capital loss write-off higher than $3,000 which has been the same since 1978, almost 42 years? All of these would only change the return by one line. And put money in people's pockets.

[TAX4US]

With so many people being forced to work from home I wonder if this will give a new meaning to OIH since most TP cannot write this off now.

[TAXNJ]

With so many people being forced to work from home I wonder if this will give a new meaning to OIH since most TP cannot write this off now.

Why not?

if they meet the IRS code requirements and any new health safety requirements, will they?

[Rapid Robert]

Why not?

Because two years ago, TCJA moved a lot of AMT rules into the regular tax system, including no more 2%-AGI misc itemized deductions (employee home office). But other features of AMT (very high standard deduction, SALT cap) also reduces the benefit of itemizing in the first place.

[TAXNJ]

Because two years ago, TCJA moved a lot of AMT rules into the regular tax system, including no more 2%-AGI misc itemized deductions (employee home office). But other features of AMT (very high standard deduction, SALT cap) also reduces the benefit of itemizing in the first place.

Yes, but don’t give up so easily. If self-employed and have a home office, one might qualify to claim a home office deduction.

Also, you might advise your clients who lost the home office deduction to look at an “accountable plan” with their employer. (See attached article).

https://www.journalofaccountancy.com...able-plan.html

[Rapid Robert]

The bottom line is Govt. comes up with ways to "stimulate the economy" .

It is easier to get to "the bottom line" when we don't have people posting false information in a misguided (at best) attempt at whataboutism.

As we all know the American economy is consumer driven. If consumers don't spend the economy tanks! Govt. and industry have to figure out how to get people to spend more to get us back out of this hole!

Unlike previous economic downturns of the past 100 years, which were typically due to high interest rates, low consumer confidence, stagnant wages or reduced real income in the labor market, bank runs and asset bubbles, etc. this one is due to natural causes (pandemic). It is similar to a 9.0 magnitude earthquake in the west coast population centers, or a "dirty" (radioactive) bomb making Manhattan off limits to humans, or a plague of locusts in Alabama, Mississippi, Texas, Tennessee, Georgia, and South Carolina.

To address it will require overcoming the natural disaster. Unfortunately, the coronavirus does not seem to accept either Mastercard or Visa. The gov't has already put $2,200,000,000,000 into the economy, without any visible effect to date (other than lining the pockets of the wealthy).

If only we had some national leadership on the simple, proven techniques needed to get people out and spending again. You know, like "No shirt, no shoes, no mask, no service".