You just confirmed what an utter mess our tax system is. You are entitled to a home office deduction and you list as one of the reasons you don’t take it is because you’re afraid you will be audited. It’s absurd someone doesn’t take a legitimate deduction just because they don’t want to be audited. The reason why you don’t want to be audited is because it’s extremely unpleasant. You probably end up dealing with a half informed IRS employee who doesn’t know crap. Then you have to argue with this nitwit who has almost dictatorial powers and can make your life miserable.
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Have you had to deal with an audit like that? I have not, but I think you’re blowing it out of proportion. The IRS doesn’t have a reputation for hiring incompetent people, not that I’ve heard of anyway.
I agree that I shouldn’t be afraid to take a deduction I’m entitled to, but that wasn’t my main point. It’s a simple cost vs reward calculation. The cost includes the small risk of having to go through an audit plus the complications of the claw-back at sale. The reward is pretty small too in my case. I’d be more inclined to do it if I was renting or dedicating a bigger proportion of my house for an office.
Try calling the IRS some day and asking them a tax question, and then tell me they don’t have a reputation for hiring incompetent people.
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“Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”
“We don’t have a trillion-dollar debt because we haven’t taxed enough; we have a trillion-dollar debt because we spend too much. ”
“Republicans believe every day is the Fourth of July, but the democrats believe every day is April 15.”
“No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we’ll ever see on this earth!”
“Government does not tax to get the money it needs; government always finds a need for the money it gets.”
“You can’t be for big government, big taxes, and big bureaucracy and still be for the little guy.”
“Whenever we lower the tax rates, our entire nation is better off.”
. . . . . President Ronald Reagan
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@Goldendog be aware you are exchanging views, above, with a Southern California Democrat who believes even profit from manufactured spending should be taxed!! He never met a tax he didn’t enthusiastically embrace! 
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ProPublica whines that people who have been following the IRA laws as written might manage to kill their pro-tax hit job that resulted in earlier tax proposals including restrictions on Roth’s, large IRAs generally, and investments for IRAs being limited to exchange traded securities and Hunter’s art.
If you’re looking to contribute to lobbying groups doing a good job, and reasonably successfully I might add, several are smeared in the article.
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Indeed. All profit is figured into “taxable income.”
Now you’re lying. I’ve never enthusiastically or otherwise embraced any tax. I merely point out its existence.
Have you had to deal with an audit like that? I have not, but I think you’re blowing it out of proportion. The IRS doesn’t have a reputation for hiring incompetent people, not that I’ve heard of anyway.
My dad was audited a few years ago, and the thing with audits, is once they trigger it for one year, they will sometimes go ahead and audit you for as many years as they are legally allowed to do so, all at once.
It spirals into a significant headache, where, even if you’re 100% in the right, you still have to deal with the hassle and the expense of defending yourself. (it may not cost “much” if you’re handling it yourself, but shipping around your defense paperwork isn’t free)
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It’s a tough read to see how trillions are likely to get spent (suffice to say “equity” and “fair”ness related words appear infinitely more often than “equality”), but it’s from whoever writes the President’s agenda so here it is.
Specifically on taxes, the current framework as of a few days ago is now:
The Build Back Better framework includes a new surtax on the income of multi-millionaires and billionaires – the wealthiest 0.02 percent of Americans. It would apply a 5 percent rate above income of $10 million, and an additional 3 percent surtax on income above $25 million. The Build Back Better framework will also close the loopholes that allows some wealthy taxpayers to avoid paying the 3.8 Medicare tax on their earnings.
I knew they were talking about even higher $10M and $25M income tax brackets, but I wonder if the Medicare reference is aimed just at S corps like the one The Big Guy uses to avoid tax on his book sales and speaking fees, or if they might blanket apply it to all income say over $400k or something.
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Looks like it is indeed taxing S Corp / pass through entities for Medicare. More details on other things too, but basically they’re taxing $10M+ a lot more and leaving the IRAs, paper profits, and capital gain brackets (below $10M) apparently unchanged.
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See here the 2021 tax brackets for your April 2022 filing:
Scroll down if you want to see brackets from earlier years, for comparison purposes.
To be fair, the Trump tax cuts did make it simpler for many people due to cap on SALT deductions combined with near doubling of the standard deduction. 47 million taxpayers itemized in 2017 vs. 15 millions in 2018. So while it did not simplify the tax code for all, it did remove some filing burden from over 30 million taxpayers. Now if only it did not add trillions to the debt but that’s a different topic.
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Kinda curious there about the shipping part. Don’t they allow electronic delivery of scanned documentation? There should really be at least an alternative to paper in 2021, no?
Kinda curious there about the shipping part. Don’t they allow electronic delivery of scanned documentation? There should really be at least an alternative to paper in 2021, no?
I don’t know what the current expectations are. I think in my dad’s case, it was an audit in 2016 that reached back at least 3 years prior to that, once the process was started.
And at the time, the expectation was that you were going to print and compile all of your justification/defense and mail it to them, certified mail.
It did not actually remove any burden, because the same 47 million still had to input all their data for itemizing so they’d know which deduction they could take. For those taking the standard deduction it removed one page – Schedule A – from the submitted tax return, but not from the preparation.
I think these brackets were published near the end of last year (so that employers could adjust withholding). Not sure why you posted it now in this thread. We’ll know the 2022 brackets shortly (for April 2023 filing).
You don’t have to be as accurate tho if you were itemizing for $15k but now the standard deduction is $24k. Sure you need records for medical expenses and mortgages and whatever else, but if you can tell you’re below the now-much-higher std deduction, you can save the trouble of keeping all those record and adding them up and just take the simple option.
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So now you’re claiming it didn’t simplify people’s returns because people had to figure out if it simplified their return? Are you saying that without eliminating itemized deductions altogether, making itemizing not applicable to 30 million people doesn’t actually make things simpler? Are you in favor of eliminating itemized deductions?
This
Even if you don’t know how close you’ll be, you only have to do the work one year to figure out how close you’ll come. Next year, you should know that unless your situation has changed, you don’t have to keep records for itemizing.
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Never let it be said I didn’t agree with someone on the other side of the fence. Bernie and I are both in agreement on this.
SEN. SANDERS SAYS SALT CAP REPEAL WOULD GIVE TAX BREAKS TO RICH
SANDERS SAYS DOES NOT SUPPORT MORE TAX BREAKS FOR BILLIONAIRES
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I suppose it’ll be simpler for some filers who are too far from the standard deduction. But as long as there’s a choice between itemizing and not itemizing, many will still calculate both to figure out which is better.
Also, was this change ever made permanent, or is it temporary? IIRC it reverts back to the old rules in 2025…
Looks like they’re trying to bring back the SALT deduction with a $72k maximum instead of the current $10k limit.
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