Deductions Feed

You're working on your tax return and discover you owe Uncle Sam more than you expected. It happens. And in most cases, you're stuck with that larger Internal Revenue Service bill. After all, the 2019 tax year is long gone. It's too late to make those year-end moves that could have helped cut your tax bill. But wait! In a couple of instances, you still might be able to reduce last year's taxes with some tax saving moves that are allowed as late as the April 15 filing deadline. You can make a potentially tax-deductible contribution to a traditional IRA.... Read more →


Thanks to a 2018 Supreme Court ruling, many other states have joined Nevada in accepting bets on sporting events. But casino operations like this one in Las Vegas still get plenty of action on days like Super Bowl Sunday. Happy Tuesday to everyone who skipped work yesterday. I hope you've fully recovered from your Super Bowl hangover. I also hope that at least some of your prop bets on the NFL championship game also paid off. So does the Internal Revenue Service. All your Super Bowl LIV winnings, as well as any other gambling proceeds are taxable income. Yes, even... Read more →


Yes, I bought a ticket for the Jan. 29 Powerball. I always do when the jackpot of that and the other national lottery, Mega Millions, gets into the, well, mega million-dollar range. No, I didn't win. Again. Last night's Powerball payout, which had climbed to $396.9 million, is going to the lucky person who bought the winning ticket in Florida. Yes, I am contacting my Sunshine State friends and relatives! In addition to the one big winner, three other Powerball tickets worth $1 million each went to ticket holders in Ohio, Virginia and, again, Florida. If you're one of the... Read more →


Even before the Tax Cuts and Jobs Act (TCJA) greatly increased the standard deduction amounts, most people opted to claim 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 because. 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... Read more →


The birth of the Rev. Dr. Martin Luther King, Jr. has been officially celebrated as a federal holiday on the third Monday of January for more than three decades. For 25 of those years, it's also been a Day of Service, during which we're all challenged to transform the King Holiday into a day of citizen action volunteer service in honor of the slain civil rights leader. There are various ways to honor Dr. King on his holiday. One recommended by the Corporation for National and Community Service is to volunteer on #MLKDay and beyond as a tutor or mentor... Read more →


You just read my post on tax filing requirements (thanks!) and discovered you don't have to file a Form 1040 this year. So, as fictional television attorney (though not a tax specialist) Jimmy McGill might say, "'S'all good, man." Right? Not necessarily. Sometimes even if you don't have to file a federal tax return, it's to your benefit to do so. Here are 10 situations when you should send the Internal Revenue Service a return: You're due a refund. This often is the case if you had federal income tax withheld. The only way to get any of that prepaid... Read more →


The individual tax filing season doesn't officially open until Jan. 27, but you're ready to file your taxes. Or are you? Tax filing, whether you do it yourself via tax software that you buy, use online or access via Free File or hand off the annual task to a tax pro, requires its own specific preparation. You've got to have all your tax-related documentation before you can start filling out that Form 1040. Here's a checklist of forms and documents you'll need to complete your taxes, as well as a look at tax situations you need to consider before filing.... Read more →


Photo by Kristina Paukshtite from Pexels A staple feature each New Year's Day is the fixation on babies born just after the clocked clicked past midnight. For the families, it's usually a joyous event, with their new bundles of joy being showered with first baby themed gifts from local merchants. Tax professionals, even those with families, however tend to see such celebrations as a tad misplaced. Or, as Jerry Gaddis, an Enrolled Agent in Florida, describes it, "bad tax planning." Am I the only one who sees this and thinks "bad tax planning"? #EnrolledAgent — Jerry Gaddis. EA, MBA (@TropicalTax)... Read more →


via GIPHY If you used your car for business purposes last year, you probably did the same thing I did on New Year's Eve. You took a quick look at your auto's odometer and jotted down the miles. Keeping track of your annual miles driven and those specifically attributable to business travel can help you reduce taxes on your self-employment income. There are a couple of ways you can track this travel, either by keeping good records of your actual business-related auto usage (more on this in a minute) or by claiming the optional standard mileage amount. That standard amount... Read more →


Paying property tax bills by Dec. 31 used to be a surefire way for many filers to bump up their Schedule A deductions enough to make itemizing more advantageous than using the standard deduction. That's no longer the case thanks to the Tax Cuts and Jobs Act (TCJA). In addition to capping state and local real estate tax deductions at $10,000, the tax reform bill also nearly doubled prior tax law's standard amounts. So fewer folks are worrying about paying tax bills that may be due later, like the end of next January here in the Austin area, by year's... Read more →


"Do nothing" has long been the derisive descriptor attached to the U.S. Congress. Actually, though, the House and Senate could more accurately be described as a legislative body that does things that don't have any chance of becoming law. That's the case most recently with a bill that would eliminate, at least temporarily, the $10,000 cap on tax deductible state and local taxes, referred to by the acronym SALT. Cutting SALT in the tax diet: The House last week narrowly passed, by a 218 to 206 margin, H.R. 5377, dubbed the Restoring Tax Fairness for States and Localities Act. The... Read more →


Congress played Santa this week, averting a government shutdown and approving a wide variety of anticipated tax breaks. Merry Christmas U.S. taxpayers. H.R. 1865, the Further Consolidated Appropriations Act, 2020, is now law. In a surprise move earlier this month, House and Senate negotiators cobbled together a massive bill that not only, as the name indicates, assures that the federal government stays open, but which also included some long-awaited (at least by those who will benefit) expired tax provisions. In addition, lawmakers corrected — and by corrected, I mean repealed — some obvious — and by obvious, I mean universally... Read more →


Congress just came up with more tax breaks to wind down 2019 than the number of ornaments we have on our upstairs' mini Christmas tree! (Photo by Kay Bell) Congress finally decorated its Christmas tree early this morning. The ornaments were myriad tax breaks. Or, in some cases, elimination of taxes. With Dec. 25 bearing down and special interest groups sending more requests to Capitol Hill than kiddos' letters to Santa, the House and Senate negotiators finally agreed on, among other things, what to do about those expired tax provisions popularly known as extenders. They OK'ed a handful of them... Read more →


Quick email question for you. Are you getting more online sale announcements or more requests to donate to good causes? It's close in my inbox, but charitable solicitations seem to be winning. That's not really a surprise. I'm not much of a shopper, in real life or online, so I don't generate enough of a cookie trail for e-tailers to follow. Plus, in the wake of the Tax Cuts and Jobs Act (TCJA) changes, charities are making concerted efforts to encourage donors. That means every nonprofit to which I've given over the years, as well as the groups they sold... Read more →


Yes, I know I'm a nag when it comes to year-end tax moves. I've posted about individual steps to take by Dec. 31 both at the beginnings of November and December, as well as looked at business tax moves to make now. But as happens all the time in life and taxes, I've come up with a few more year-end tax moves that didn't make the earlier lists, or at least were mentioned just in passing. So here goes with five more tax moves to make by Dec. 31 1. Don't miss the RMD deadline. You followed all the financial... Read more →


More offices are having holiday parties this year. Even better, the seasonal soirees — and small gifts for workers — could be tax free. Most holiday office parties aren't as raucous as the one portrayed in the R-rated 2016 movie "Office Christmas Party." That's probably good for bosses, workers and the tax collector trying to make sense of the deduction claims. (Screenshot of YouTube trailer) Offices are much more jolly this holiday season. More than three-quarters of businesses are planning parties this December. That 76 percent of companies throwing seasonal soirees is up more than 10 percent over 2018 count... Read more →


Congratulations! You made it through Thanksgiving. And Black Friday, Small Business Saturday and Cyber Monday. Are you ready for one more special day before the end-of-year biggies? I'm talking about today, Giving Tuesday. Giving Tuesday, a post-Thanksgiving fixture since 2012, is the unofficial kick-off of the annual end-of-year charitable season Today was designed as a global day during which folks are encouraged to give back to their communities and the charitable causes they care about. The timing fits right into the end-of-year solicitations by nonprofit organizations and the annual tax considerations of donors. Tax cuts also cut donor numbers: Over... Read more →


These carolers, dressed in Dickensian attire, are no doubt singing traditional Christmas tunes, not my reworked and tax-themed "O Tannenbaum." (Photo by Chris Waits via Flickr CC) O Tax Year-End (O Tax Year Moves) O Tax Year-End, O Tax Year-End, How are thy days so nearing! O Tax Year Moves, O Tax Year Moves, How are thy days so wearing! Not only in the wintertime, But even in young spring is thy prime. O Tax Year-End, O Tax Year Moves, How are thy days so nearing! Yes, that's my attempt at tax lyrics to the tune "O Tannenbaum," known here... Read more →


Current state and local taxes deduction limit on federal Form 1040 Schedule A. We're wrapping up the second full year of living with the Tax Cuts and Jobs Act (TCJA) but some things still feel unfinished. Treasury and the Internal Revenue Service continue to issue guidance on various provisions, tax forms still are being tweaked, economists can't agree on the tax bill's economic effects and a key legal battle is still raging. The courtroom drama is about, you guessed it, TCJA's $10,000 limit on state and local taxes itemized federal deductions. Fighting a low-SALT tax diet: In July 2018, New... Read more →


Happy Thanksgiving. This annual gathering of family and friends is supposed to be a happy time of reconnecting. Nowadays, though, that takes some work. So to help you enjoy this Turkey Day instead of dread it or worse, here are some tips. Some are even tax-related. Acknowledge your differences: Clashes between family members have been going on since humans appeared on this planet. Unfortunately, over-sized expectations during holidays tend to make them worse. Old arguments — be they political, emotional or otherwise — often resurface. Recognize this and be ready. You aren't going to change your relatives or the issues... Read more →