It's true!! Remember when you used to be able to claim the interest you paid on your cars? Okay then, why was that deduction ever taken away? Can anybody enlighten me on this? A great incentive to buy a new car is knowing that it is deductible! The government will encourage you to go out and stimulate the economy on one hand, but take away the incentives on the other. Anything, and I mean anything that cost you interest should be a perk when it comes to deductions on your income tax return. Credit cards, furniture, anything you buy on time, that cost you interest, you should be able to claim.
I also think that anything you pay taxes on, should have a certain percentage of a deductible i.e. Gas, Groceries, (cleaning supplies, certain foods that are "taxable" i.e. prepared foods, building materials, home improvements, etc), and how about State Tax? Since the state taxes us, and the federal government taxes us, is that a form of double dipping? I know we need to fix our roads, I know we need to paint new lines in the streets, I know that there are certain government/state agencies that relies on our taxes, I'm not saying that the Federal Government and State tax board should not tax us, because it is a necessary evil, all I am saying is that they should never ever take away our deductibles. That is the only thing that makes our taxes bearable, is knowing that we will get something at the end of the year!
The IRS doesn't hesitate to make you claim not only your retirement as income, i.e. 401K + others that are considered income, (even though you earned it, and its your money) and others not mentioned here. In this writer's opinion, I cannot for the sake of me think of any other reasons why they took away the benefits of claiming these things, other than the fact that the IRS isn't able to gouge you as badly as they do now...with your deductibles you have some form of leverage and "defense" if you will to ensure something back at the end of the year.
The person that does my taxes, says that it's all about deductibles, or the lack thereof. If I claim Married, at a higher single rate, with zero dependents, lately, if I don't say "Married, at a higher single rate, and oh, fill in how much "extra" you want them to withhold" just to make sure you don't get stuck with payments, which will end up in penalties and interest, then I still end up either paying the IRS even MORE money, or if I'm lucky, (and I mean lucky), I may break even.
What about property taxes?, In some states, they are outrageous. I found that most of the states that do not have a state tax, it's because they gouge the home owners, or the folks who own land, they pay the difference to replace the state tax. One way or the other, the state will get you. I know so many folks whose husbands or wives have died, or perhaps they got a divorce, and they cannot handle their property taxes without some help from their spouse, and that house that they owned for say; 17 years, gets taken away because the homeowner cannot afford the property taxes.
So, they just take the house away for defaulting on their taxes. It never ends. Folks are buying houses for pennies on the dollar of tax tax defaulted houses. Well, this isn't right either. Some folks will say, "well, that is just the way it is, it makes it better for me, the investor who has the money to pay pennies on the dollar on a house that someone used to call home, but couldn't afford the taxes"...I don't see anywhere, where this is right, or even morally correct. Are we creating our own problems?
I will admit, that I am not a IRS fan, never have been, never will be. I think they are a bunch of crooks who have way to much power, and are the only agency, (other than Credit Reporting Agencies) that can ruin peoples lives. These are the agencies that I think are out of control. I believe that they should be restructured and in certain areas, should be discontinued. THEY HURT THE ECONOMY!!
The only way to get somewhat of a tax break is if you own a business. Even that nowadays with this economy, is not the best answer. I own my own business, and thank God it is a full service business, where overhead is low, and I provide a service. I do not buy anything wholesale, therefore I am not taxed, nor do I have to pay taxes for services rendered, but only if I make a under a certain amount. I only started this business three years ago, and so far, the deductions have worked out for me, i.e. equipment write offs, music purchase write offs. Mileage to and from the event, gas, food for clients discussing their event over lunch, it does, and has helped although its been pretty slow in this economy, people just aren't spending that much money on entertainment these last couple of years....hard times for all I reckon.
In conclusion, if you want extra write offs, ask your tax preparer if you should start your own business, and what are the benefits of doing so? What can you deduct? How many years do you have to claim a loss if that should happen, which it will. I have claimed a loss for the last two out of three years due to the economy. So, again, the only way to actually do something about the taxes, IRS, and Credit Reporting Agencies, is to write to your governor, your congressperson, or Capital Hill. Ask questions, and don't think you can't make a difference, there are so many other folks that are in the same position we are. And I for one am tired of it!!!
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