Deductions Feed

Photo by Nataliya Vaitkevich from Pexels Hello, ultimate tax procrastinators. You now have just a week to finish your Form 1040 and get it to the Internal Revenue Service. A piece of cake for all y'all who push thing to the last minute, right? Ooooh-kaaaay. It's your tax life … and possible tax costs if you mess up anything or, yikes, miss this due date. But just in case you're open to a little at-the-wire tax filing advice, here are six questions, and some answers from me, to ask yourself in these last seven days until Oct 15. 1. Do... Read more →


As the fight continues on Capitol Hill over how to pay for President Joe Biden's economic and infrastructure plans, property taxes are getting a lot of attention. In one case, it's the real and continuing battle by some lawmakers to repeal or at least revise the itemized deduction limit on state and local taxes, including income and real estate levies collected at those governmental levels. In the other, it's a false claim about a new, nationwide real estate tax. SALT deduction change: First, a look at the real taxes, the state and local taxes, or SALT, collected by almost every... Read more →


If you have it in your heart, and bank account, consider donating to your favorite charity. It could help many through a difficult year, and also might provide you an enhanced tax deduction. 2021 has been, to put it as nicely as I can, one heck of a year. We commemorated the 20th year since the Sept. 11 foreign terrorists' attacks. We've had major and deadly natural disasters. We're still dealing with the COVID-19 pandemic. And we've got 3½ months to go. All these events, and the possibility of more (hurricane season, for example, lasts until the end of November),... Read more →


The IRS has decided that home COVID-19 tests are allowable medical expenses. This Tuesday was the week from hell, mainly due to dealing — again! — with medical insurance issues. I won't bore you with my personal, and continual, battles with insurance companies over paying for my health care procedures. I will say that even with the coverage, the hubby and I have been able to itemize our — and by our, I mean mostly my — medical costs over the last few years and claim them on our taxes. We're in the minority, both in itemizing and claiming medical... Read more →


Updated, Monday, Sept. 13, 2021, to add just-announced Hurricane Ida relief for some Pennsylvania taxpayers. Just two weeks ago, we were awaiting Hurricane Ida. Since then, Hurricane Larry went spinning into the North Atlantic and Tropical Storm Mindy rushed across parts of Florida and Georgia. Today. Sept. 13, Tropical Storm Nicholas is heading toward a Texas Gulf Coast landfall, after which it will send more rain into already water-logged Louisiana. But we're still dealing with Ida's deadly fallout in states beyond landfalling Louisiana. After coming ashore near New Orleans as a category 4 on Aug. 29, she moved northeastward across... Read more →


Damage in the Galliano, Louisiana, area from Hurricane Ida as seen by U.S. Coast Guard overflight on Aug. 30. (Photo courtesy U.S.C.G./VIRIN: 210830-G-G0108-1006M) Hurricane Ida went from Tropical Depression 9 to a category 4 hurricane that slammed coastal Louisiana on Aug. 29 in just about three days. The Internal Revenue Service has reacted just as quickly. Today, the IRS announced that its offering tax relief to Ida victims. That includes pushing the Oct. 15 extended filing deadline (and other tax dates) to Jan. 3, 2022. The tax relief applies to any area designated by the Federal Emergency Management Agency (FEMA)... Read more →


Records, tax and financial, are often among the property damaged or destroyed in a natural disaster. If you're lucky, you might be able, like this woman, to salvage some of the documents. If not, you'll need to recreate them to take advantage of tax-related storm relief. (Image courtesy Louisiana Law Blog) We're heading into peak Atlantic hurricane season, which means much of the United States could face disastrous circumstances like those already being dealt with coast-to-coast. In major disasters, various types of tax relief are available, including claiming storm-related losses as an itemized deduction. One of the key considerations here... Read more →


The devastating Haitian earthquake. Deadly flooding in Tennessee and North Carolina. Tropical Storm Henri damage in the Northeast. Drought-fueled destructive wildfires in California. Add the global Delta surge that's exacerbating the COVID-19 pandemic and it does seem, as my grandmother would say, that the world is going to hell in a handbasket. If you've managed to avoid any or all of these disasters and want to help those who are less fortunate, thanks. Here are some ways to do so. Myriad mechanisms to give: The standard big dog nonprofits, American Red Cross and the Salvation Army, remain the go-to donation... 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 →


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 →


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 →


UPDATE, Oct. 5 , 2021: Yes, you are experiencing tax déjà vu. But if you're one of the millions of taxpayers who got an extension to file your 2020 return back in May, and then put off doing so until now, literally just days until the final Oct. 15 due date, then you need this reminder. As you finally fill out your Form 1040, don't make any of these dozen tax filing mistakes. 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... Read more →