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Questions tagged [tax-deduction]

To be used for any question related to tax deductions.

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104
votes
13answers
23k views

Isn't “I bought [blank] as a tax writeoff” complete nonsense?

There's a trope in movies where people do something to keep from being bumped into a higher tax bracket (For example, in The Big Lebowski: "I'll have to check with my accountant, but it might bump me ...
88
votes
5answers
19k views

I have sole custody of my child but the child's father's brother claimed him as a tax deduction

I have court papers showing that I have full and sole custody of my son and that he was with me like 99% of the year. I let my son's father have him a few weekends last year but only a handful. My ...
50
votes
6answers
9k views

Why are businesses allowed to deduct expenses from their income, while individuals generally cannot?

In general, it's an accepted principle that businesses should be allowed to deduct expenses. How did this principle come about? And why doesn't it appear to apply to individuals to the same extent? ...
48
votes
8answers
17k views

Tax on gambling winnings with social security number

My roommate told me that he met someone at an MGM casino who won $100,000. That person told my roommate that he does not have a social security number to turn his winnings into cash. He made a deal ...
36
votes
4answers
5k views

Deducting charitable donations under new U.S. tax law

I usually donate about $20k to charities every year, and I don't have many other deductions to claim. Given that the new tax law doubles the standard deduction to $24k, I effectively don't get tax ...
34
votes
8answers
23k views

How can I achieve a 13% U.S. Federal tax rate?

MSNBC just had a segment explaining how Bernie Sanders paid 13% in federal taxes. This year my income changed significantly, and I'm making a little less salary than Sanders's ~$200k. However, unlike ...
23
votes
6answers
6k views

Is the Standard Deduction better than Itemized when both are the same amount?

For 2018 the standard deduction is $12,000 for individuals, $24,000 per household. If someone's itemized deductions equals the standard deduction, or is very close, which one is better to take? For ...
23
votes
4answers
2k views

Is it worth saving HSA funds until retirement?

I recently discovered that there is no lifetime limit to contributing to an HSA account - provided that you don't contribute more than the limit per year. Assuming that an individual makes a decent ...
22
votes
8answers
12k views

Why did the federal government ever allow taxpayers to deduct their state taxes from their federal taxes? [closed]

At the end of 2017, President Trump signed into law the Tax Cuts and Jobs Act with among other things eliminated the federal tax deduction for state taxes paid. Essentially, the federal government ...
20
votes
3answers
3k views

Tax benefits of recycling

Today I spent 15 minutes of my time to drop off burnt-out incandescent light bulbs at the only place in town that accepts them. I was charged $1/bulb for helping the planet. The cashier told me to ...
19
votes
2answers
5k views

What's my tax situation if I earned $20k, age 22, and live with parents?

I'm a bit confused about what to expect when I file tax returns. I heard my parents can't claim me as a dependent because I earned more than $6k for the year. What's the situation if I live with them ...
19
votes
2answers
3k views

Should I choose Itemized or Standard deduction?

I see I am saving more when I choose Itemized deduction, even though its less than standard deduction. Is that normal? And in this case should I choose itemized and disregard recommendation of Turbo ...
19
votes
1answer
4k views

Can I expense when buying my own lunch

I am organized as a single member LLC. And I work from home. I see that some corporations buy their employees lunch and expense it. My question is... Can I order lunch or go out to eat by myself and ...
18
votes
3answers
3k views

Why would a previous year's tax deductions affect the current year's taxes?

For the first time in several years, I'm preparing the income tax filing for my family. Since a professional did the preparations last year, we had no electronic records to directly load into the ...
18
votes
1answer
3k views

Will I owe any taxes if I can write off every cent?

Does anyone know if I will owe any taxes for my small business if I can write off every cent? My business is based in the United States. I started a small web design business this year and anticipate ...
17
votes
8answers
3k views

How does giving to charity work?

The title of this question is hopelessly vague, but here is what I'd like to know: I've always heard that even if you don't have much money, you should give to charity. It is tax-deductible. I'm ...
17
votes
2answers
4k views

If I donate depreciated stock to charity, can I deduct both the market value and the capital loss?

I have stock that's depreciated in value since I bought it. Just to make up some numbers, I paid $8000 for it, and it's worth $1000 now. If I donate the stock to charity, can I take the charitable ...
17
votes
3answers
2k views

Moving from full time to contractor

For many reasons I am moving from full time employee to a contractor with an associated company in a different city. Everyone I have spoken to says contracting is great except for the taxes and lack ...
16
votes
4answers
11k views

Minimize taxes now that I earn more

Background I recently received a hefty promotion for $350k (plus stocks and bonuses) with the same company. Now that I can finally start to pay down my debt, I'm not so happy that suddenly 45% of my ...
16
votes
8answers
4k views

Mortgage or not?

I am 57, spouse 53. I lost my 30+ year business in 2009, declared personal bankruptcy and now have only $4K in retirement accounts. The positive news is that I am employed; my income is 110K, hers is ...
16
votes
12answers
4k views

Why is paying mortgage interest considered by some to be beneficial?

When discussing buying a home I often hear people say they like having a mortgage because they get the benefit of writing off the interest. Am I misunderstanding something? My simple thought is if ...
16
votes
2answers
4k views

How will getting married before the end of the year impact this year's taxes?

My fiancée and I plan on getting married in December of 2018. She wants to go to the courthouse this month and get legally married immediately, so we can work on an adoption process with her child. ...
16
votes
7answers
2k views

In US, is it a good idea to hire a tax consultant for doing taxes?

I am going to start working in a software development company in Colorado, United States very soon. I am also single. The tax system here seems pretty complex to understand as well. Do employees in ...
15
votes
2answers
3k views

Can I deduct child's charitable deduction from my taxes?

My five year old daughter negotiated $20 in back allowance (we hadn't paid her allowance in a while, and she's a better negotiator than me) and then donated that money at her school to a charity for ...
14
votes
3answers
12k views

Can I deduct a 2013 donation to charity on my 2014 tax return?

In 2013 I made a donation to a charity. In early 2014, I included a copy of the donation receipt with all the paperwork I sent to my CPA. When he filed my 2013 tax return, he forgot to deduct the ...
14
votes
5answers
2k views

What are the common income tax deductions used by “rich” salaried households?

With one of the hot election topics in the U.S. being increased taxing of the so-called "rich" (those with a household income > $250,000), I'm curious about the options such households have for ...
14
votes
4answers
3k views

What home improvements are tax deductible?

Specifically, do odor removal and air duct cleaning count as tax-deductible home improvements?
14
votes
3answers
3k views

Is the UK 'Cycle to Work' scheme worthwhile?

There is a cycle to work scheme my work is offering which works roughly like so: Change some of your pre-tax salary into vouchers to use to buy a bicycle, and bicycle equipment (helmets, lights etc). ...
13
votes
5answers
5k views

Does the IRS reprieve those who have to commute for work?

Consider someone who for either family or affordability reasons is unable to live in San Francisco, where they make their living. Their daily commute is long. The cost of the commute is nontrivial, ...
13
votes
1answer
3k views

Does the Affordable Care Act (Obamacare) require insurance to be paid with pre- or post-tax dollars?

I would like to continue paying for health insurance with pre-tax dollars. But, according to this Washington Post article, buying healthcare through the Affordable Care Act (Obamacare) requires post-...
12
votes
3answers
12k views

If I pay someone else's property taxes, can I use it as a deduction on my income tax return?

I'm planning on paying the property taxes of a home my mother-in-law owns. She owns the house, but I live there. As part of the bargain, I agreed to pay the property taxes. If I write the check ...
12
votes
2answers
106k views

Will I have to pay taxes in India when I transfer money from a US bank to an Indian savings account?

I am currently in US, and would like to transfer some amount from my US Bank account to a savings account based in India on a monthly basis through a third party like Xoom or Transfast. If I'm going ...
12
votes
1answer
4k views

Can pretax lottery winnings be donated to charity?

Can pretax lottery winnings be donated to charity in the US simultaneously creating a deduction of the taxable lottery winnings and putting pretax proceeds to a productive cause?
12
votes
5answers
35k views

Deductible expenses paid with credit card: In which tax year would they fall?

If I paid my business expenses with a credit card during the month of December, which year can I deduct them from my taxes? 2011 (when the purchase was made) or 2012 (when I paid off the credit card)? ...
11
votes
6answers
15k views

Why should one only contribute up to the employer's match in a 401(k)?

On a recent edition of Jim Cramer's Mad Money, he urgently (does he do things otherwise?) recommended that you ONLY contribute up to the employer's match in your 401(k) and put the rest of what you ...
11
votes
2answers
56k views

Donation Value Of “One Bag Of Clothing”

Early last year, I donated some clothes to Goodwill and received a donation receipt for "one bag of clothing." I have no memory or documentation of exact contents to calculate an amount. Given only ...
10
votes
1answer
2k views

Can I use the new tax law to help with private school?

We live in a city that has a very low rated school system, therefore we have been enrolling our 2 children in a private school that costs $12,000 per year per child. This comes with quite a bit of ...
10
votes
3answers
737 views

What are the ins/outs of writing-off part of one's rent for working at home?

Suppose I rent a 100 square foot apartment (just to keep the numbers easy). Now suppose I use a 30 square foot area exclusively for working-at-home. In that 30 square foot area there'a desk ...
10
votes
1answer
2k views

Are student loans tax deductible in US?

If I have a student loan from finishing my graduate degree, can I deduct its interest payments from salary for tax purposes? Is there any education related tax credit that can be applied for payments ...
10
votes
1answer
147 views

If the IRS asks for a proof for a medical expenditure, can we provide a scan, or do we have to provide the original receipts?

In the United States, one can deduct part of the expenses a taxpayer paid for medical and dental care for themselves, their spouse, and their dependents. In case the IRS asks for a proof, are scans of ...
10
votes
1answer
2k views

Points paid on purchase of principal residence - tax deductible?

I bought a house last year (in Colorado) and have now received a Form 1098 from the mortgage company showing the mortgage interest I've paid. Line item 2 on this form is Points paid on purchase of ...
10
votes
1answer
302 views

How to take advantage of a no-income year (taxwise) when you could sell stock with capital gains?

I didn´t have much income this year, so I was thinking of selling any stock with capital gains. The purpose of this sell is to take advantage of the standard deduction and the 0% tax on capital gains ...
10
votes
1answer
168 views

Can you deduct membership to a doctor's office as a medical expense?

In the US, I'm trying to figure out if membership to my doctor's office is deductible. My office charges a $149 annual fee for access to the office, which allows them to provide good online tools, ...
9
votes
5answers
5k views

Borrowing money to buy shares for cashflow?

I currently have lots of equity in my house in Sydney. I am holding 2 investment properties that are negative and really draining my cash flow as we have young kids and wife only works part time. I ...
9
votes
3answers
5k views

Buying a more expensive house as a tax shelter (larger interest deduction)?

I've heard that some people buy a more expensive house as a tax shelter. In my simple mind I imaging the scenario: Pay 10,000 annual interest on the mortgage 50,000 annual income = 40,000 taxable ...
9
votes
6answers
77k views

First salary in the UK not being taxed

I just started working in the UK for the first time and received my first payslip. Another colleague of mine got his second payslip here, from the same company. We were surprised that in the detail ...
9
votes
5answers
15k views

Do I owe taxes if my deductions are higher than my income?

My total income this year was $16,604 (wages, interest, and business income). My deductions (including IRA, personal exemption, standard deduction, and self employment tax) was $17,404. TurboTax ...
9
votes
3answers
293 views

Is there any advantage to using a FSA instead of claiming medical expense on tax returns?

Using my FSA is pretty annoying. I have to submit claims and scramble to use it or lose it. Is there any advantage (aside from perhaps cash flow) of using an FSA over just claiming my medical/...
9
votes
6answers
15k views

Are COBRA premiums deductible when self-employed?

Been Googling all day and can't find anything definitive. I left my job in January of 2010, and have been working on a 1099 basis since then (as a sole proprietor). I have been paying COBRA premiums ...
9
votes
2answers
2k views

Is the Personal Exemption included in the Standard Deduction?

My question is: do the numbers below include the personal exemption? I found this tax data for 2016: Table 2. 2016 Standard Deduction and Personal Exemption (Estimate) Filing Status ...