I'm trying to understand the rationale behind WHY the use AGI instead of business income. And more specifically, I know they will add back depreciati...
I’m trying to understand the rationale behind WHY the use AGI instead of business income. And more specifically, I know they will add back depreciation which makes sense – but would they also add back things like "student loan interest deduction"? What about "1/2 of self employment tax deduction"?
When a bank is deciding whether or not to give you a loan, the use of a Debt to Income ratio already takes into account your monthly student loan payment, so it seems like "double dipping" that they can use it to knock down your income a few notches lower, and then turn around and also have that same category take away from your monthly spending power.
And don’t get me wrong, I completely – 100% – agree with your debt to income ratio being affected since a student loan is a monthly expense, but it’s hard for me to understand why they would also reduce your income for something that has nothing to do with the bottom line of your business income earning power? It seems to me like it would be fair to do one or the other, but not taking away from both sides.
If the gov’t wants to give you a deduction for student loan interest, or for 1/2 of self employment tax, and that reduces the amount you pay them then great. But I’m not seeing how the gov’t giving you a tax credit really has much to do with your ability to pay back the bank mortgage. You’ll pay the bank back if your business is profitable, how much money you are bringing on an income statement (Income – expenses = net profit).
Can anyone help me to understand this?
"AGI what you pay bills with"
Actually, I’m failing to see that connection. My student loan interest is already accounted for in the debt to income ratio the banks use. Right? So why are they then going and reducing my income as well?
New Consensus Sees Stimulus Package as Worthy Step
By JACKIE CALMES and MICHAEL COOPER
WASHINGTON —
…"That sort of impact is what makes federal aid to state governments rank high in economists’ reckoning of the stimulus value of various proposals. Every dollar of additional infrastructure spending means .57 in economic activity, according to Moody’s, and general aid to states carries a .41 “bang” for each federal buck.
"Even more effective are increases for food stamps (.74) and unemployment checks (.61), because recipients quickly spend their benefits on goods and services.
******"By contrast, most temporary tax cuts cost more than the stimulus they provide, according to research by Moody’s.That is true of two tax breaks in the stimulus law that Congress, pressed by industry lobbyists, recently extended and sweetened — a tax credit for homebuyers (90 cents of stimulus for each dollar of tax subsidy) and extra deductions for businesses’ net operating losses (21 cents).*******
According to Moody’s Investors Services, tax cuts COST more than they’re worth:
"That sort of impact is what makes federal aid to state governments rank high in economists’ reckoning of the stimulus value of various proposals. Every dollar of additional infrastructure spending means .57 in economic activity, according to Moody’s, and general aid to states carries a .41 “bang” for each federal buck.
"Even more effective are increases for food stamps (.74) and unemployment checks (.61), because recipients quickly spend their benefits on goods and services.
"By contrast, most temporary tax cuts cost more than the stimulus they provide, according to research by Moody’s. That is true of two tax breaks in the stimulus law that Congress, pressed by industry lobbyists, recently extended and sweetened — a tax credit for homebuyers (90 cents of stimulus for each dollar of tax subsidy) and extra deductions for businesses’ net operating losses (21 cents)."
And don’t give that "it’s the NY Times" crap. They’re quoting Moody’s.
The chief economist for Moody’s is Mark Zandi, who worked on McCain campaign. Try again.
Apparently, Olivia can’t read…
If one is self-employed and files a schedule C, can she deduct daycare/babysitting expenses to go to work 100% as a business expense? This would be instead of taking the day care tax credit. Also, then would she need to 1099 her daycare provider/babysitter in order to claim the business deduction?
If churches give to the community give them a tax credit for their contribution. If it works out that they owe zero tax at the end of the day, I’m fine with that but let them start on the same playing field as any other entertainment business.
We operate a S Corporation and this as of next month it is 3 years
since we gotten a new car, we were considering purchasing a Nissan
Altima Hybrid 07 which comes with 00 tax credit, would we still be
able to receive the business tax deduction and the tax credit if we
purchase it under the business? Also, are we allowed to since this
will soon be more than 3 years since we made our last car purchase for
our business?
So you are saying the credit will get split among all the shareholders of the S Corp?
There is good news for California residents who do not have a house yet. Although the economy is slow, especially in the market housing, the government both at federal and local levels are clearly working very hard to make it easier for people to make a purchase to enter the house of your dreams. These are important things that will make the tax credit for buyers easy to understand.
The governor has produced a bill which was approved by the law to extend the tax credit for buyers for the remainder of 2010 with a twist. This means there are differences. In this new development and tax credit extended there No Holds Barred. This means you can go out and select the house of your dreams at any cost.
What this means to you do not need to stay in a certain price range. There is no minimum cost the house and no maximum. The sky is the limit. This gives you the luxury of getting what you want while taking advantage of the home purchase tax credit.
The way the tax credit for buyers mainly works earn credit when filing your taxes state. This is totally independent of the federal incentives. When filing tax credit will be applied during three years.
When you are eligible will be awarded ten thousand dollars in three years of credit and deposit will be divided. If you have to pay when you file the incentive will help reduce your payment.
If you do not expect to pay taxes, you will continue to receive credit earned, do not be alarmed. Finally, time is a vital piece of information you need. Buy your home and close between 1 May and 31 December 2010 is the deadline you need to qualify. Despite two hundred million dollars were approved not wait until it is too later.
Adoption tax credit to pay penalties for early withdrawal?
I wonder if you could use the tax Adoption the remaining credit to cover the withdrawal of my TSP early penalties. If yes I would do if the credit does not goto waste. Then I could put that money into an IRA next year and reap the tax benefits.
Approval of credit would be entered on line 54 of your 1040, you noted other taxes and credits from line 57. The early withdrawal penalty is not established until after line 60, so no, the credit Adoption can not be used against the early withdrawal penalty. It may be used against any income tax due to the withdrawal, however, not only on the sentence.
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