That’s why you progressively get rid of it. Make a limit of X thousand dollars per year, then slowly (or quickly) drop that amount.
My mortgage interest plus property taxes dropped below the standard deduction for joint filing. Hmm, maybe I should start filing separately? I’ll ask my CPA sis-in-law for free advice (over expensive wine that we’d drink anyway, and yes, I’ll deduct that as a filing expense).
ISWYDT
So put out a proposal. I’m not sure what your thoughts are now. I put mine out there, and it would qualify as “right” I hope - no deductions at any income level.
Because it’s bad policy. The $300 deduction for low and middle incomes is bait.
Better ask her if you can still deduct that under TCJA.
That won’t help. If you file separately you can’t load up the itemized deductions on one spouse and give the other the standard deduction. If one spouse itemizes then the standard deduction for the other spouse is $0.
You’d have to actually get divorced to make that work. At least if that’s the game you were envisioning.
What I do is itemize every other year. I make 13 mortgage payments in odd years and 11 mortgage payments in even years. So that bumps up the mortgage interest in odd years a little. And while I make charitable contributions in roughly twelve-month intervals… it’s always in odd years. So I made a big round of charitable contributions the first week in January (what I consider to morally be my 2020 contributions) and then I’ll make another round of charitable contributions (my true 2021 contributions) the last week in December. The charity gets my money either 51 or 53 weeks after the prior donation but of course it makes a big difference on my taxes.
There’s one monthly donation that I’m still having auto-charged to my credit card so I just suck it up that I don’t get the full tax benefit there. Except for 2020 I did get $300 of it due to the Covid bill. I tried to change that but the charity was annoyingly obnoxious about it and they do good work so I just cope.
We’re always way over $10,000 on our SALT so no need for shenanigans there, but there’s a property tax bill due each February that I could always pay in December if I wasn’t hitting the SALT cap. And while it’s only for half the taxes, I could just prepay the whole year such that I think I could pay two full years of property taxes in one calendar year if I wanted to. But we’re over $10K no matter what we do, so we don’t bother. Before they put the cap in my father used to do that.
If you and your wife are employees of employers then you can’t do that either, at least not on a federal return for tax years 2018-2027. They got rid of the miscellaneous deductions which is where you could deduct tax prep fees. (A couple states kept it, but many did not.)
If you have a partnership with a K-1 or a Schedule C (small business) or Schedule E (rental property) or Schedule F (farm) then you can deduct tax prep fees as either unreimbursed partner expenses or legal/professional fees. It’s only supposed to be the portion of the fees that is directly related to the partnership/business/rental/farm income. You’d probably get away with putting the whole cost on there, but technically that’s cheating. And only 50% of the meal counts as a partnership/business/rental/farm expense unless you work in an industry regulated by the Department of Transportation (mostly flight crews and taxi/limo/truck drivers and the mechanics who support them) in which case it’s 80%.
Or you can ask me for free! 
I’m honestly a little torn on that. To what extent should politicians use the tax code to promote social policy? If you think there’s an easy answer to that question then you probably haven’t thought about it much.
I’m not sure what you mean by “social policy”. I tend to say that 100% of government should “promote the common good”.
But, when it involves spending money, I’d rather see the spending labeled “spending” instead of labeled “tax incentive”. So I think we shouldn’t be spending money in the tax code.
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Encouraging people to do X by giving a tax deduction or credit for X.
In our current tax code we incentivize:
-having children
-paying for childcare
-being old
-being blind
-owning your own home
-taking out a mortgage to buy your home
-having a small business
-investing in a small business
-investing in state/municipal bonds
-having a “buy and hold” investment strategy
-inheriting
-paying for college
-paying student loan interest
-saving for college
-saving for retirement
-making certain energy-efficient improvements to your home
-buying certain new electric or plug-in hybrid cars
-donating to charity
And SO much more. Is all or some or none of that good? It’s easy to say “none” but I’m not sure that’s the right answer. We need people to have children. We need people to start small businesses.
No rational person is going to deliberately become blind to get a tax benefit, but is it a good idea to give blind people a tax benefit? What about someone who’s deaf, mute and paraplegic but not blind. Are they less deserving of a tax benefit than a blind person? They’re certainly less receiving of a tax benefit.
So while I don’t think we’ve drawn the lines in all the right places, it’s less obvious to me where they should actually be.
Thanks.
So, we’ll drink some of her wine while she tries to sign me on as a client.
Win-win.
Wine.
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“Divorce,” eh??
Dammit, I want to save my $200 in taxes!!
I used some tax prep software to figure out the difference in our taxes if my husband and I got a paper divorce. (Like, still live together, not tell anyone we were divorced other than the IRS).
It was a lot more than $200 that we’d save!
My cousin and his girlfriend don’t get married specifically to avoid the tax penalties. They’ve been together for 15 years, have two kids, own a house together… it’s basically as if they’re husband and wife. But technically they’re not.
Policy schmolicy. This is a democracy. If you can’t sell it to 60 senators it ain’t happening. If you have good policy the next thing is to decide how to sell it. Democrats are so stupid as they blindly walk into the room thinking they have a bunch of stuff that makes a lot of sense and then expand all their political capital trying go against the stream of popularity. Popularity needs to come first, then logic can follow it. This is politics not business.
In Canada the definition of marriage for tax purposes is based on cohabitating, not a marriage certificate.
Which is good, because I read that in some provinces, 50 percent of people don’t get married anymore.
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Disagree.
Here’s some life advice. Figure out where you want to be, before you start the journey.
Taking your approach, it’s candy for breakfast and a pony for everybody! Easy to sell.
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When I post here, I might say:
"I think _____ is good public policy because … "
“I think _____ is going to pass/not pass because politically …”
“If I held public office, and had to balance politics and policy, I think I’d settle for _____ instead of my preferred ____ due to political realities”
My posts in this thread have been the first type. I expect EG’s have been as well. You’re responding with the third.
A lot of good it does when Republicans are in office because Democrats tried to ram a bunch of unpopular policies down everyone’s throat. We literally had Trump because during the 2016 election Democrats were passing bills to allow transgender females into ladies rooms. That kind of stuff should be done right after an election not during one. All Republicans have to do is oppose it and they get a ton of votes.
Okay. All tax laws impact behavior. I’m assuming you’re talking about intent.
Some congresscritters voted to raise taxes on cigarettes specifically because they hoped it would reduce cigarette smoking. That’s “social policy”.
Others had no desire to change individual behavior, they were just looking for a politically possible way to raise some revenue. That’s not “social policy”.
My thoughts on your list:
-having children. I don’t want to collect income taxes on the money needed to support a “minimum” lifestyle. So I’m in favor of a flat $12,000 standard deduction. A family with children needs more money for that minimum lifestyle, so I’m in favor of a higher standard deduction if they have kids. I’m not trying to encourage people to have children, simply to allow them to pay for the kids they have.
-paying for childcare. If you mean a tax deduction for child care expenses while the parents work, I consider that an attempt to level the tax playing field between working outside the home vs. staying home with the kids. I see that as an attempt to avoid an incentive in either direction. So I’m okay with it. If you mean paying for childcare in hopes that adults will choose to have kids because it’s so easy or even profitable, then I’m against it.
-being old, blind. Obviously, lawmakers aren’t trying to incentivize these things, so this isn’t “social policy”. Theoretically, I’m okay with a higher standard deduction if we know that having these conditions increases the cost of minimum lifestyle. I don’t think that’s true for being old, so I’d get rid of that one. I don’t know about blind or other disabilities, so I’d wait for more information.
-owning your own home, taking out a mortgage to buy your home. These are “social policies” because I think lawmakers intended to encourage renters to buy instead. I’m not sure that buying really is good socially, but I am sure that these incentives should not be in the tax law. If we want to spend money to encourage home ownership, that should be on the spending side of the ledger.
-having a small business. I’m not sure which parts of the law you’re referencing. I thought the TCJA pass-through deduction was dumb. In general, any money spent to support small businesses should be on the spending side of the ledger, not in tax law.
-investing in state/municipal bonds. I’m opposed to subsidizing state/local borrowing in general. Putting in on the tax side of the ledger is even worse.
-having a “buy and hold” investment strategy. Not sure which portions of the tax law you’re referencing. Cap gains rates shouldn’t differentiate between short and long term gains, both should be taxed like ordinary income. The tax deferral for unrealized gains is usually sold as a practical accommodation to the cost of compliance, not as an incentive to hold (which I oppose). I think I’ve said in this thread that we should tax unrealized gains for certain cases where compliance costs are minimal.
-inheriting. Not sure what you’re referencing here.
-paying for college. Not sure of the reference. Again, if we want to subsidize college, that should be on the spending side, not the tax side.
-paying student loan interest. I don’t think we incentivize paying the interest, more like “not paying principal” or “borrowing for college. Whatever, if we want to subsidize college, that should be on the spending side, not the tax side.
-saving for college, saving for retirement. I’m not a big fan of incentivizing saving. However, I do think that ordinary people who are simply trying to shift spending should pay taxes on their real investment income, not on their nominal investment income. When I think about the practical ways to make that work, I come up with a system that allows them to defer taxes. The tradeoff is okay to me. (note that this means higher taxes than we currently have on qualified plans)
-making certain energy-efficient improvements to your home, buying certain new electric or plug-in hybrid cars. Should be on the spending side instead of the tax side. Except, if we did an explicit carbon tax that’s fully refundable on a per capita basis. I’m okay with Pigouvian taxes in theory (a third rationale for cigarette taxes).
-donating to charity. Again, if we want to do this it belongs on the spending side, not the tax side.
So while I don’t think we’ve drawn the lines in all the right places, it’s less obvious to me where they should actually be.
tl;dr Things that are actual “social policy”, that is the intent of the law is to change behavior, should be on the spending side of the ledger, not the tax side.
I’d keep a few of these tax complexities, but that’s not because I’m trying to change behavior, just be “fair” in some way.