Thread: Tax break??

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    Default Tax break??

    Does anyone else know about the supposed Volunteer Responder Incentive Protection Act (H.R. 1405)?
    here's the link.. www.nvfc.org/leg/hr1859.html
    This was posted on the nvfc's site 11/05 and nothing else has been heard about it.
    This would be a great benefit to all volunteers.

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    Quote Originally Posted by markh03
    Does anyone else know about the supposed Volunteer Responder Incentive Protection Act (H.R. 1405)?
    here's the link.. www.nvfc.org/leg/hr1859.html
    This was posted on the nvfc's site 11/05 and nothing else has been heard about it.
    This would be a great benefit to all volunteers.
    Current Status.

    It's in the Ways and Means Committee.

    Why should volunteers get tax breaks on income? I don't agree with it?
    Politics is like driving. To go forward select "D", to go backward select "R."

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    Quote Originally Posted by scfire86
    Current Status.

    It's in the Ways and Means Committee.

    Why should volunteers get tax breaks on income? I don't agree with it?
    im a vollie, and i agree with that. career should get it too,
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    There are a few threads on it already.

    I wouldn't mind it (mainly because I volunteer ) but good points have been brought up against it.

    What are the requirements to get it? Who is a volunteer? Paid per call? Just volunteers? Just fire? EMS?

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    We'd be much better getting rid of more tax loopholes, rather than creating new ones for the special interest group du jour.

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    Quote Originally Posted by Dalmatian190
    We'd be much better getting rid of more tax loopholes, rather than creating new ones for the special interest group du jour.
    Thanks Dal. I agree. Every tax exemption is a subsidy for the group it affects.
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    It is not really a tax loop hole or exemption. It is just saying that tax exemptions provided by a state or local municipality should not be considered income. If a tax is not imposed on someone in another state in the first place, why should you getting a break on it from you local government count as income toward the federal government when it does not for the guy in the other state?
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    Then I'll be more specific. I don't believe there should any tax exemptions for income for volunteer (or career) firefighters at the local, state, or federal levels.
    Politics is like driving. To go forward select "D", to go backward select "R."

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    Ok, it's not what I thought it was on the surface...

    However...

    The subject can be more complicated.

    Local real estate and personal property taxes, as long as they're based on value, are generally deductible from your Federal Taxes.

    If I owe my Town $2,500 /year in property taxes...and I'm real close to that...I can deduct that from my Federal Income Taxes, which in turn reduces my federal tax liability by about $700.

    If the Town gave me, say, an abatement of $1,000 as some programs near me do...

    I only pay the Town $1,500 and that only reduces my federal tax liability by about $420.

    Am I being taxed on the $1,000 the town abated? Or is it simply that expense no longer exists to be deducted?

    Now, further complicate things, how does this interact with the standard deduction for people who don't itemize? I think that's where the IRS looks to treat it as income -- most people don't benefit from it, so it's not figured into the standard deduction calculations.

    If the Town paid you $1,000 that is taxable income.

    If the Town simply says you can keep $1,000 in your pocket in exchange for services you provided why wouldn't that be taxable likewise?

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    Quote Originally Posted by Dalmatian190
    Ok, it's not what I thought it was on the surface...

    However...

    The subject can be more complicated.

    Local real estate and personal property taxes, as long as they're based on value, are generally deductible from your Federal Taxes.

    If I owe my Town $2,500 /year in property taxes...and I'm real close to that...I can deduct that from my Federal Income Taxes, which in turn reduces my federal tax liability by about $700.

    If the Town gave me, say, an abatement of $1,000 as some programs near me do...

    I only pay the Town $1,500 and that only reduces my federal tax liability by about $420.

    Am I being taxed on the $1,000 the town abated? Or is it simply that expense no longer exists to be deducted?

    Now, further complicate things, how does this interact with the standard deduction for people who don't itemize? I think that's where the IRS looks to treat it as income -- most people don't benefit from it, so it's not figured into the standard deduction calculations.

    If the Town paid you $1,000 that is taxable income.

    If the Town simply says you can keep $1,000 in your pocket in exchange for services you provided why wouldn't that be taxable likewise?
    If town A taxes a property worth $100K at a rate of 1% and town B taxes a property worth $100K at a rate of 2%, is town A paying its property owners $1000?
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    Not talking about the choices people make where to live.

    A valuable item exchanged for labor. Common sense says that's taxable income.

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    Quote Originally Posted by Dalmatian190
    Not talking about the choices people make where to live.

    A valuable item exchanged for labor. Common sense says that's taxable income.
    So should you pay taxes twice on the deduction you get for dependents? Having dependents is generally a matter of choice to one degree or another.
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    I'd like a tax break for being a volunteer firefighter.
    I'd like a tax break for being a volunteer EMS provider.
    I'd like a tax break for being a volunteer softball coach.
    I'd like a tax break for being a volunteer T-Ball coach.
    I'd like a tax break for being a volunteer helper with American Cancer Society events.
    I'd like a tax break for being a volunteer BSA/GSA helper.

    Where does it stop?

    (PS - I don't think this tax break plan is a good idea)
    "This thread is being closed as it is off-topic and not related to the fire industry." - Isn't that what the Off Duty forum was for?

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    Oklahoma has a $200 tax credit for volunteer fire-fighters. The way it is setup is that in order to qualify for the tax credit you have to send in proof that you completed a certain amount of hours worth of training. You have to send in your tax-credit form to the state firefighter council and they will vertify that your training qualifies for the credit (Sitting in the recliner at the station won't fly). They will sign off on your paperwork and forward it to the tax-commision. Its a nice little incentive for people to keep up with their training I think.

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    So should you pay taxes twice on the deduction you get for dependents? Having dependents is generally a matter of choice to one degree or another.

    I'm not even sure I can figure out what that was supposed to say.

    If I barter services, that's taxable.

    My town's LOSAP program is structured so that the payments received upon "retirement" are taxable.

    If I say "I'll dig that ditch in exchange for you giving me that car" that's taxable as income.

    So it simply comes down to the local community bartering your time volunteering in exchange for a tax abatement.

    It's a pretty simple concept, and pretty consistent with other income tax regulations.

    Except where there's a lot of political manipulation, the general test is if a specific service or item of value is received, it's taxable.

    If I donate $10 to the fire company, that's a tax deductible donation to a 501(c)3 charitable organization.

    If I "donate" $10 to the fire company for a Chicken BBQ dinner, that's not tax deductible because I received an item of value.

    Property taxes, based on the value of my property and uniformly assesed in the community, are deductible when they go into a general pool of government services.

    HOWEVER, when they're for a specific improvement to a property or area, they're not -- i.e. if your tax bill has a line item like "Sidewalk Construction" you'd be on thin ice taking that as a deduction without the advice of a tax specialist.

    Items like differences in tax rates between communities or multiple children aren't looked at as some sort of income since they're not done in exchange for a specific service.

    But within a community, if you begin to abate taxes whether it's to attract a new company, or for a volunteer firefighter, or to provide elderly a work-in-lieu of taxes problem the IRS starts to look to make sure it's handled as taxable income since it is a specific service in exchange for a valuable item. And that means it's either a reduction in your deductions if you itemize, or it's added as income if you don't itemize.

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    I get to take a federal tax deduction for local real estate taxes i pay. That's pretty simple.

    If the municipality gave you no property tax break, and instead gave it to you as income, you'd get the full deduction and report the income. Kind of puts it in the same position as current.

    Tax simplification is never simple.

    earl

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