subject: Four Ways The U.s. Economy Is Setting Trends For Irs Deductions [print this page] Four Ways The U.sFour Ways The U.s. Economy Is Setting Trends For Irs Deductions
The economic status of the United States is constantly changing. If the economic conditions are great then you will see more requests for tax cuts or credits. If the economy is in very bad shape then sometimes taxes are raised to meet the budget costs that are estimated for the new year. In either case you should try and spot the trends to take advantage of deductions you can use on your tax returns. Here are four ways that the economy sets trends for deductions.Car industrySince the car industry is not doing well, the federal government has come up with incentives to get you the consumer to purchase a car. If you buy a new car then you'll get a tax break. They have recently tried the cash for clunkers program with much success. It has done so well that your federal representatives are asking for an extension to the program.Real Estate IndustryThe banking industry tanked and interest rates shot through the roof. No one was buying houses. People couldn't afford the high interest rates on their homes so many were foreclosued upon. There was a glut on the housing market. To spur sales tax credits were created to first time home buyers. This did help to reduce the amount of available houses on the market, but they weren't selling fast enough. So another credit was created. This time for those that wanted to purchase a second home. Job CreationTo improve the economy in bad times people need jobs. If there is no income coming in then the taxes collected are not sufficient to pay for all the funded government programs. Therefore, package deals and incentives are provided to companies and businesses that create jobs. You are constantly bombarded via all the media outlets about the ways top officials are bringing jobs to their region. Noone wants to have the highest unemployment rate. The offers get better and better as the unemployment rate increases.Green EnergyThe price of oil has gone up. It is constantly in a state of flux. Never again will we see gas prices under $1.00 per gallon under the current crude oil system. As people pay more for gas they have less to spend for other items. If no money is flowing to other industries the economy gets stagnant. There have been many tax credits that have arisen from green energy from tax credits for more fuel efficient cars, to solar heating for your home. There are new companies that are being created everyday to make our lives better for less money that will also be good for our environment.When people think of trends they generally think about fashion, or business. However, even the IRS cannot escape the economic trends and how they affect the way taxes are created or eliminated. The housing sector, real estate industry, and unemployment rate will always be key factors to set trends. The economic situation whether good or bad will always determine what types of IRS deductions we have.
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