Get your taxes done using TurboTax

It’s so much fun to speculate.  Will the IRS go simple or difficult?

 

Option A (difficult and time consuming):  The IRS could choose to effect change to AGI with the unemployment income deduction.  This would cause all other deductions, forms, instructions, and calculations that use AGI as a base, to be affected as well.  

Option B (simple and straightforward):  The IRS could simply add a new line to the Form1040 right after the standard/itemized deduction line, “unemployment compensation deduction” and be done.  This change would be in line with the intent of simply reducing the tax burden on the unemployed without opening the AGI can of worms.

 

If they had months to implement this change and thought it would become a permanent adjustment to taxes, they would probably go with Option A.  Since SO many unemployed have already filed that are affected by this change in tax code, I think they will go with Option B.

 

Has our government ever opted for simple over complex?  This may be the first time.  We will find out soon enough.