My FY2010 Tax Breaks

2010 was a momentous year for me.  In September, I started graduate school in California, requiring me to move halfway across the country.  (And also making my returns for 2010 much  more complicated than any other year.)  The government provides two tax breaks, one for education expenses and another for moves of greater than 50 miles, that were thus directly applicable to me.  After giving it a lot of thought, I decided to only take one of them.

[Update: I meant to file this on April 15th.  Better late than never.]

I decided not to file my moving expenses – $700 of shipping charges, ~$450 of hotel expenses, and another couple hundred for gas – against my 2010 income. As a rule of thumb, I feel that the government uses the tax code way too much to achieve spending goals, and I do not think subsidizing movers is a worthwhile spending goal.  I’m all for labor mobility, but I find it hard to believe that taking 10-35% off the cost of it actually changes the calculus of anyone contemplating such a dramatic life change.  If you need a job, or only get into graduate program, you’re going to move.  Even if the moving tax credit does not cost much money, it should be eliminated on principal alone.

I did, however, submit my book expenses from my first two academic quarters to the IRS.  The federal government offers to subsidize education by making qualified education expenses (basically any material or fees required to complete classes) deductible from taxable income.  Higher education is expensive and, on net, society gains from its consumption, so I think encouraging it is a worthwhile goal.  Moreover, America is generally much less friendly to college students than European countries: in Europe, its common for most institutions to have separate price levels for students.  In America, it’s pretty rare to pay less as a student, so I will take those opportunities where I can get them.

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• Tax Breaks for the Rich/Cuts for the Poor (hahayourefunny.wordpress.com)
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