Everyone
admits that there needs to be “technical corrections” made to the hastily
written GOP Tax Act. In addition to those
being discussed, here are some changes I believe should be enacted -
+ If
Congress believes the deduction for state and local taxes should be limited to
$10,000, the maximum amount allowed for a married couple filing a joint return,
currently also $10,000, should be increased to $20,000. Two single individuals living together can
claim $10,000 each for a total of $20,000.
Why should a married couple be penalized by limiting the deduction to
$10,000 on a joint return?
+ The
Child Tax Credit of $2,000 per child, increased from the previous $1,000 to
make up for the loss of the personal exemption, is only allowed for dependent
children under age 17. A dependent child
who turns age 17 during the year gets the lower $500 “Other Dependent Credit”. It is my assumption that the Child Tax Credit
was intended to cover dependent children through high school. The age threshold for the higher Child Tax
Credit should be changed from under age 17 to under age 18 or even under age 19.
+ The
American Opportunity Credit was intended to provide tax relief for the 4 years
of college leading to an undergraduate degree.
Currently the credit is only available for 4 tax years. But since a college year begins in the fall
of one year and ends in the spring of another year a 4-year degree program actually
takes place within 5 calendar years. Qualified
calendar-year taxpayers, which almost everyone is, should be allowed to claim
the American Opportunity Credit for 5 tax years.
As
an aside - I do not believe the American Opportunity Credit, or any credit
or deduction that is in reality a distribution of social welfare or other
government benefits, belongs in the US Tax Code. But as long as it is there
it should be done properly to accomplish its intended purpose. And I oppose the $10,000 SALT limitation, but if it is there it should be applied fairly.
So,
what do you think?
TTFN
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