Having assisted in tax preparation in the inner city in the mid-1990s, I discovered that there are many areas of tax that hit the middle class and working families the hardest. With COVID-19 coming to the USA and displacing millions of workers, now is the time to innovate the tax code temporarily.
- Allow any person who was forced to work from home to claim a home office credit where all home workers should also be able to claim 25% of their rent as an expense.
- Allow any workers who paid for food, education, and child care while working from home to claim it as an expense.
- Tax filers should be able to choose any state for residence to pay tax if displaced or in the hospital for more than 30 days in 2020.
- Subsidized universities must charge in-state tuition prices to any students who were displaced due to COVID-19. Thus, all tuition should be charged at an in-state rate for 2020 and 2021, if students are forced to attend hybrid or online courses.
- Real estate owned by business and individuals should be able to take a casualty loss against state and federal tax for each day a governor or mayor declared the business to be unsafe.
- Teachers or doctors who provided free services during 2020-2021 during COVID-19 should be exempt from state taxes during that period of work.
- Students and young workers under 27 years old who worked to provide for their family during COVID-19, should be exempt from state and federal income taxes up to $20,000 dollars.
- Those who did not receive any money from the CARES Act or COVID-19 Relief may claim a “one-time tax deduction” against their income of $5,000 dollars.
- Any small business that didn't receive any assistance during the COVID-19 pandemic may also claim a “one-time tax deduction” of $5,000 dollars. If they had no income, they can carry the credit forward for up to three years.
- Anyone who lost their money on a cancelled trip, flight, or hotel room and did not receive a refund, shall be able to claim a “dollar for dollar tax credit”.
- Anyone who paid membership dues to any gym, public club, or association and had no access to those facilities for more than a month shall be able to claim a full casualty loss of 3 months of dues or fees paid.
- All states should continue to be classified as a “Presidential Disaster Area’ in order for any worker or business owner to claim a casualty loss for being displaced or having work premises contaminated. Thus, if your building was not allowed to receive customers, a taxpayer can claim a casualty loss based on the average monthly gross income of that business.
- Any farmer who sustained losses of crops or livestock should be able to receive a full presidential disaster loss to apply against income or carry forward.
While these are just suggestions, Congress or the president should be able to be bold and assist working families and students with relief without paying any money out directly, but using tax deductions, credits, and casualty losses to help working families offset the financial carnage caused by the pandemic, mayors, and governors of respective states.
George Mentz JD MBA CWM Chartered Wealth Manager ® is a licensed attorney and CEO of GAFM
® global education, which is an ISO 29990 Certified professional development company operating in over 50 nations. Mentz is an award-winning author and advisory board member to several companies around the world in education, charities, and FinTech Companies.
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