Deductions Feed

The 2020 tax return filing deadline for most U.S. taxpayers literally is just days away. If you're scrambling to meet the May 17 due date, don't be in such a hurry that you cheat yourself out of some tax savings. You can claim deductions, either by itemizing if that gives you more than your standard deduction amount or by claiming some income adjustments, most of which are still referred to (by me, at least!) as above-the-line deductions, that reduce the amount of income that's taxed. There also are tax credits, which are even better because they directly reduce what you... Read more →


July has become a big month for the Internal Revenue Service. Last year, in the heart of the COVID-19 pandemic, July 15 was the delayed regular tax return filing deadline. This year, July 15 is the kickoff date for Advance Child Tax Credit payments and resumption of some IRS collection and enforcement efforts. This summer month also a welcome time for folks who early in 2021 filed tax returns reporting all their 2020 unemployment benefits. The IRS announced today that around 4 million of those taxpayers are about to get refunds for their tax overpayments. Where the IRS has taxpayers'... Read more →


Cleaning up after customers. (Photo by RODNAE Productions from Pexels) Some businesses reopening after the lifting of COVID-19 pandemic restrictions have struggled to hire workers. The big debate is whether coronavirus relief, primarily Uncle Sam's added unemployment benefits, or low wages is why so many jobs are going unfilled. That argument is likely to continue, along with the Congressional battle to raise the federal minimum wage. Earlier this year, the effort to increase it from $7.25 per hour to $15 an hour failed. Some state, city minimum wages hiked: Wage increase advocates, however, have had more success at other governmental... Read more →


Even though Tax Day 2021 has come and gone, the Internal Revenue Service has decided to give some storm-struck West Virginians in the western part of the state more time to file their 2020 tax returns. Even after skies clear, flood waters remain. (Photo courtesy FEMA Facebook page) Sometimes even the Internal Revenue Service runs a bit late. That's the case with its announcement today, May 27, that some West Virginians now have a little more than a month to file their 2020 taxes. Until June 30, to be precise. Yes, Tax Day this year was May 17, almost two... Read more →


President Joe Biden this week reinstated a long-standing White House tax tradition. Biden and the First Lady, as well as the Vice Presidential couple, made public their annual tax return filings on Tax Day, May 17 this year. (White House Facebook image) Monday was Tax Day 2021. Yes, it was just more than a month later than usual. But one tax thing did return to normal this year. The President and Vice President of the United States released their tax returns to the public. Tax sharing by Biden: The 2020 tax year joint filing by President Joe and First Lady... Read more →


Tax Day 2021 has moved to Aug. 2 for Tennessee taxpayers in 23 counties that were hard hit by tornadoes, other storms, and flooding. Satellite view from GOES-16 showing the storm system responsible for the tornado outbreak across much of the southern United States on March 25, 2021. (Image courtesy National Oceanic and Atmospheric Administration via Wikipedia Commons) As we enter the final weekend of the regular tax-filing season, millions of taxpayers have yet to file their returns. Some are simply uber-procrastinators. Others, however, don't have to worry about meeting Monday's May 17 deadline thanks to extra time granted by... Read more →


Health insurance policies with lower premiums are always popular, whether the medical coverage is offered via a workplace plan or bought separately by individuals. Those who opt for such coverage are willing to take smaller out of pocket premiums each month in exchange for larger deductibles for their overall coverage. Part of that choice is based on the opportunity to set up a companion savings account to cover those higher deductibles. These aptly and obviously named high deductible health plans, or HDHPs, work well for folks who don't have chronic medical issues, but want to make sure they have coverage... Read more →


Reviewed and updated May 15, 2021 Tax Day 2021 for most U.S. taxpayers is just a week away. Procrastinators' focus obviously is on finishing up those 1040s. But there are some other tax tasks that, if they apply to your tax situation, you should take care of or at least consider by May 17. 1. Contribute to an IRA: Putting as much as you can into an individual retirement arrangement, or account as most of us call it, is always a smart move. The IRA will grow over the years, giving you some cash when you're ready to call the... Read more →


Even before 2017's Tax Cuts and Jobs Act (TCJA) greatly increased the standard deduction amounts, most people chose to use the standard deduction amount. But one thing that the latest tax reform law didn't change is the ability for many to get some added deductions without itemizing. These used to be called, at least by the tax community, above-the-line deductions. They got that moniker because pre-TCJA they appeared in the last section of the old long Form 1040, just above the last line of that form's first page where your adjusted gross income (AGI) was entered. (A handful also were... Read more →


You need to follow your doctors' practice of keeping track of your medical records. Your documentation of your health care treatments and costs could pay off as valuable tax deductions. Most taxpayers used the standard deduction even before 2017's Tax Cuts and Jobs Act made it even more appealing by essentially doubling the amounts. Still, millions of filers every year find that claiming itemized deductions gives them a better tax result. And medical expenses tend to be a big reason why they opt to itemize, especially when they know and claim all the possible health-related expenses. Annual deduction choice: You're... Read more →


Severe storms in late February produced flooding in Franklin County, Kentucky, shown here, as well as other parts of the Bluegrass State. That led to a major disaster declaration and associated tax relief. (Photo by National Weather Service) We Texans, especially here in the usually more temperate central-to-southern part of the state, learned a hard lesson in February from Mother Nature. She can be as bad as she wants, whenever and wherever she wants. We Lone Star Staters are not alone in dealing with the weather truth. Since our devastating winter storm, severe weather has raged across much of the... Read more →


Every tax-filing season is different. One thing is constant, though. Taxpayers, and sometimes even the tax preparers they hire, make mistakes on 1040 forms. Hey, we're only human. But there are some common tax filing errors that we all need to be aware of and do our best to avoid. Here are 12, collected from my personal experience, talks with tax professionals and the Internal Revenue Service. They're in no particular order. Some might seem insignificant. Others obviously are huge. Either way, each and every one could, at best, slow down the processing of your tax return and subsequent refund.... Read more →


Bernie Madoff leaving a court hearing in 2009. Bernard "Bernie" Lawrence Madoff died on April 14 in a federal prison medical facility where he was being treated for terminal kidney disease. The 82-year-old had been in jail since 2009 for orchestrating the world's largest Ponzi scheme. Madoff pleaded guilty on March 12, 2009, to 11 federal crimes, including operating the financial fraud that bilked as many as 37,000 people in 136 countries over two decades. He was sentenced three months later to the maximum 150 years behind bars and ordered to pay restitution of $170 billion. At the time of... Read more →


It's April. You know what that means. Major League Baseball is back! Yep, the return of The Boys of Summer takes top billing this month since the Internal Revenue Service pushed the usual April 15 Tax Day to May 17. I'll be spending this Opening Day doing what I do every year when the professional baseball season starts: watching games. All 30 MLB teams are in action today, so that's a lot of innings to occupy my time. Update: Today's meeting of my East Coast team, the Baltimore Orioles, at the Red Sox's Fenway Park is postponed until Friday due... Read more →


As COVID-19 continues to control to at least some degree our lives, federal and state tax officials are offering tax benefits to those who take steps to control and lessen the effects of the persistent pandemic. Photo: Anna Tarazevich from Pexels If you still itemize deductions, the Internal Revenue Service today announced that you can count a few more purchases toward your Schedule A medical claims. Of course, the additions are because of COVID-19. Specifically, the IRS says in Announcement 2021-7 that the costs of personal protective equipment, aka PPE, purchased for the primary purpose of preventing the spread of... Read more →


Image by Maxime Duprez via Twitter Happy National Pi Day 2021. Or as usurping marketers in the United States also call it Pie Day, even though there is a day designated for the food. Go ahead, get your bargain-priced sweet or savory pies today. But March 14 actually celebrates the mathematical constant pi, or π in the Greek alphabet. In case it's been a long time since math class, that's the ratio of a circle's circumference to its diameter. The trillion-digit ratio is rounded to 3.14. You can find more about pi in one of my earlier March 14 blog... Read more →


With the expansion of available COVID-19 vaccines, many workers are looking forward to shutting down their home offices and soon heading back to their offices. Others, however, have left the workforce for good. Unfortunately, the work status change for some recent retirees didn't happen quite as they had planned. More than two-thirds, or 68 percent, of individuals who responded to Allianz Life's 2021 Retirement Risk Readiness survey said they retired earlier than expected. That's a significant increase from the 50 percent who took early retirement last year. The coronavirus pandemic has underscored that much of life is beyond our control.... Read more →


March 1 has arrived. Or, as some coronavirus pandemic weary wits have dubbed it, March 2.0 or March 366. Yes, we've been dealing with COVID-19 for a year now. And yes, the virus and its myriad disruptions continue. But the development of multiple vaccines and prospects for expanded distribution of the shots give us reason to hope that the coronavirus after-times are within sight. Another COVID-19 relief package, dubbed the American Rescue Plan, also is closer to reality. The House passed the measure over the weekend, and the Biden Administration is pushing the Senate to hammer out its differences with... Read more →


A panoramic view of Positano, Italy, the famously vertical town where actor and food/travel show host Stanley Tucci found the highly-desired Amalfi Coast lemons. (Image courtesy Italia Agenzia Nazionale Turismo) Tonight, the hubby and I will watch our latest favorite television series, Stanley Tucci: Searching for Italy. The CNN show is part travelogue, but with routes determined by Tucci's tastes, which are so far spectacular. The award-winning actor, director, screenwriter, Instagram bartender and cookbook author (you're not surprised, are you?) essentially is eating his way through Italy, the county from which both sides of his family hail. He started in... Read more →


Winter can be gorgeous. It also can be disastrous, as all us Texans more accustomed to heat waves than winter storms found out last week. (Photo by Kay Bell) It's been near 80 degrees for the last two days in my part of Texas. This time last week, we were in the teens during the day, after single-digit overnight low — and record-breaking — cold temperatures. This surprisingly strong cold snap left a lot of damage. People lost power and water. Freezing pipes in freezing houses burst. Food was spoiled. Many are looking at weeks to even get repairs underway... Read more →


Much of Texas got record snowfall on Feb. 14-15, with around 6 inches covering our backyard. Thank goodness for some much welcome sunshine today, but it's still below freezing, meaning our heater is working overtime! (Photo by Kay Bell) We have sunshine here in Central Texas! Still, the high temperature today in the greater Austin area is not expected to break the freezing mark. That means my home's heater is still in overdrive. And that means my next bill is going to be ginormous. The only consolation, is that I can count part of that heating bill as a home... Read more →