Deductions Feed

After 14½ hours of debate, the U.S. Senate early on Saturday, Dec. 2, approved 51-49 its version of tax reform. Now the hard work starts. (C-SPAN2 screenshot; click image to watch video of the full debate and votes) It's alive! Tax reform, or at least tax cuts (for a while, for some people) survived a marathon session in the Senate, with that chamber approving its Internal Revenue Code revisions early Saturday, Dec. 2, morning. Now the real fun begins. Since the House version (H.R. 1, the Tax Cuts and Jobs Act) passed on Nov. 16 is different from the Senate's... Read more →


Ho, Ho, Ho, hoss. It's the most wonderful time of the year. The holidays and year-end tax moves are here! (Photo by Kay Bell of a scene at Marble Falls, Texas' annual Walkway of Lights along the lake) Hello, holidays! We're so happy you and your good cheer have finally arrived. But the arrival of December also means 2017 is almost over, giving us only 31 days to take care of tax tasks that could save us money when we file our returns next year. This year, it also looks like Congress might actually make some tax changes, if not... Read more →


Feeling generous? Good. It's Giving Tuesday. This philanthropic effort, usually seen as #GivingTuesday on social media, began in 2012 as a counter to the frantic shopping on Black Friday, Small Business Saturday and Cyber Monday. Giving Tuesday's goal is to fight the commercialization and consumerism of Christmas and other end-of-year holidays. Instead of buying more goods for family, friends or yourself, Giving Tuesday organizers urge gifts to nonprofits. Such donations, the Internal Revenue Service reminds us, could produce a gift for you — a tax deduction — when you file your annual tax return next year. As noted in a... Read more →


A crush of shoppers rushes to start their Black Friday quest for bargains. (Photo via Diariocritico de Venezuela/Stan Honda/Flickr CC) Black Friday, the day-after-Thanksgiving kickoff to the holiday shopping season, may have lost some of its luster in recent years, but plenty of shoppers still hit the stores today to bargain hunt. If you're among the frenzied shoppers, hang onto your receipts if you buy a lot or big-ticket items. They could bump up your itemized tax deduction. And your 2017 tax return might be the last time you'll be able to take advantage of this deduction. Tax reform deduction... Read more →


Republicans continue to work on their tax reform bills. The House plans/hopes to vote on its bill this week, while the Senate's version, released Nov. 9, is still being analyzed. One area getting a lot of attention is the two bill's differing treatments of pass-through entities. Income from these businesses — which include sole proprietorships, partnerships, limited liability companies (LLC) and S-corporations — is passed through to the business owners, who then report it on their personal tax returns. The issue confronting lawmakers is that these earnings currently are taxed at ordinary income tax rates. Under the new tax reform... Read more →


One of the surprise differences in the Senate tax plan as compared to the House bill is in the treatment of state and local taxes, referred to by tax geeks (guilty!) as SALT. Both the House and Senate tax bills would eliminate the deductions for state and local income and sales taxes. The Senate, however, makes no accommodation for real estate taxes. That hard tax line also was originally taken by the House. But GOP leaders there, facing backlash from their members in districts where voters pay big real estate tax bills, acquiesced. The House bill revision allows the property... Read more →


The tax dueling has officially begun. The Senate on Thursday, Nov. 9, released its answer to the House's H.R. 1, officially title the Tax Cuts and Jobs Act. UPDATE, Thursday, Nov. 16, 2017: The House passed H.R. 1. Prospects for the Senate's tax reform bill, however, are muddier. While resolving difference in the two doesn't demand quite as many steps as in the 10 Duel Commandments outlined in the still incredibly popular Broadway (and touring company) musical Hamilton, it's still going to be one of the biggest face-offs in recent Washington, D.C., legislative history. Here's a look at some of... Read more →


$13 billion. That's how much nonprofits say Republican-proposed changes to the tax code could cost them each year. Even though the GOP's Tax Cuts and Jobs Act would keep the itemized deduction for charitable donations, it's one of just a handful that will remain on Schedule A. In exchange for the elimination of most itemized write-offs, the House tax reform proposal calls for almost doubling the standard deduction. That shift in federal tax deduction strategy could pose a major problem for the thousands of U.S. nonprofits that rely on contributions. Fewer itemizers = less donations: Now, about a third of... Read more →


House Speaker Paul Ryan (R-Wisconsin) get serious in discussing what Republicans say are the middle-class benefits in their latest proposal to rewrite the tax code. The most detailed plan yet was released Thursday, Nov. 2. (Screenshot of C-SPAN video; click image to watch clip.) Remember that Capitol Hill adage that all politics is local? It can be easily shifted to tax reform. Whether you're for or against a tax law change will depend in large part on how much it helps or hurt you. When it comes to the men and women who propose and/or make those changes, their votes... Read more →


UPDATE, Nov. 2: Good news. It looks like most of the Republican tax reform plan, according to the bill's legislative language, "shall apply to taxable years beginning after December 31, 2017." That means we will close out 2017 under current tax law, so these tips still apply. I'm working on a post about the proposed tax changes and will get it up here on the ol' blog shortly. it's now published! My mind boggles at the number of Thanksgiving pumpkin pies that can be made from this collection! It's just a small part of the Dallas Arboretum and Botanical Garden's... Read more →


Welcome to Part 4 of the ol' blog's series on 2018 inflation adjustments. Today we look at changes to some popular credits and deductions. You can find links to all 2018 inflation posts in the first item: Income Tax Brackets and Rates. Note: The 2018 figures apply to 2018 returns that are due in 2019. New tax laws also have altered some of the 2018 amounts and are noted in the post below. For comparison purposes, you'll also find 2017 amounts to be used in filing 2017 returns due next April. Millions of taxpayers depend each year on tax deductions... Read more →


Welcome to Part 2 of the ol' blog's 2018 series on tax inflation adjustments. We started on Oct. 19 with a look at next year's — if there isn't tax reform or cuts by or before then — income tax brackets and rates. Today we look at standard and itemized deductions, personal exemptions and limitations on these tax situations that apply to some wealthier taxpayers. Note: The 2018 figures apply to 2018 returns that are due in 2019. New tax laws also have altered some of the 2018 amounts and are noted in the post below. For comparison purposes, you'll... Read more →


Congress hopes to move beyond talk and have tax reform details in writing by mid-November. The Senate Budget Committee released its 2018 budget blueprint on Sept. 29, setting the stage for up to $1.5 trillion in tax cuts over the next 10 years. That's an astounding, alarming, amazing, pick-your-adjective amount. But the figure that caught my eye, and which earns this week's By the Numbers honor, is 13. As in Nov. 13. That's the date set in the Senate budget resolution by which it wants some legislative flesh attached to the framework of a tax reform that Republicans released on... Read more →


Shelley Long and Tom Hanks confront one of many (MANY) problems of homeownership in 1986's "The Money Pit." (Click image to view full MovieClips.com scene.) How expensive is owning a home? So expensive that many homeowners view "The Money Pit" as a documentary. But, we console ourselves, at least we get some nice tax breaks for our piece of the American Dream. In many cases, though, the reality of buying a house is, at best, a wash economically. Some folks would be better off financially renting. Ah, but emotionally, there's little that can beat the feeling of having your own... Read more →


House Ways and Means Chairman Rep. Kevin Brady of Texas, surrounded by his Republican colleagues, displays a postcard tax return his Party says will be possible under the tax reform framework released today. (Screenshot of C-SPAN video; click image to watch tape.) And so tax reform 2017 begins. Unfortunately, it begins vaguely. The Republican Party today released its "Unified Framework for Fixing Our Broken Tax Code." That long title, which is in dramatic all capital letters on cover of the nine-page document, belies the amount of information it provides. In fact, there are fewer tax details in this latest GOP... Read more →


Real estate taxes, along with other now-deductible state and local levies, could be eliminated as part of the forthcoming Republican tax reform plan. One thing is true when it comes to tax law changes. Some people win and some people lose. The big question as we await the Trump Administration's tax reform proposal is who will end up in which group. One segment seen as a potential big loser in the proposal Republicans will release on Wednesday, Sept. 27, are the Americans who pay state and local taxes. These include income, sales and property taxes, all of which currently can... Read more →


If compassion fatigue hadn't set in after the back-to-back-to-back hurricanes that roared across the Atlantic, laying waste to much of Texas, Florida, Georgia and many Caribbean islands, it probably did when Mexico got rocked within two weeks by two massive and deadly earthquakes. A group of American tourists were literally rocked when their Sept. 19 Mexico boat ride was interrupted by a 7.1 magnitude earthquake. Click image to watch full YouTube video. Many of the small tropical islands were particularly hard hit by Hurricanes Irma and then Maria. Both were major hurricanes. Both covered wide areas. The mass of the... Read more →


Donald J. Trump is Tweeting about tax reform. He's also holding bipartisan dinners at the White House to talk taxes. West Virginia Democratic Sen. Joe Manchin was pleased steak was on the menu. The White House website has a video explaining how the tax code is broken. House Speaker Paul Ryan says Congressional Republican's tax reform plan outline will be released in a couple of weeks. Meanwhile, pundits have been honing their prognostication skills, attempting to tease out tax possibilities and their potential effects. But despite all this action, the bottom line is that it's still just a big tax... Read more →


Aside from the damage that hurricanes cause, one of the biggest problems is that they often, especially in September, effectively come back to back. Hurricanes Katia, Irma and Jose (left to right) lined up earlier in September. (National Hurricane Center radar image) That's what happened with Hurricane Irma. The angry sister of Hurricane Harvey walloped all of Florida three weeks after coastal Texas was gut-punched by Harvey's historic flooding. The back-to-back U.S. landfalls was a first for Category 4 storms. The only good news here, at least tax-wise, is that the Internal Revenue Service has a Harvey template for Irma... Read more →


Photo by The Explorographer via Flickr CC Sixteen years ago, the unthinkable happened. Terrorists struck on U.S. soil, leaving 2,977 dead in New York City, Washington, D.C. and outside of Shanksville, Pennsylvania. This Sept. 11, residents of Florida, Texas, U.S. territories in the Caribbean and neighboring island nations are struggling to recover from Harvey and Irma, two deadly hurricanes that are among the strongest ever to make landfall. There is no comparing these tragedies. Each is heart-wrenching and horrific in its own way. But they share one important attribute. Today, as on Sept. 11, 2001, people are reaching out to... Read more →