The IRS Deductions Blog

Archive for August, 2010

Question: I cant make sense of this FAFSA question and all the help provided refers to US tax forms…?

What was your parents’ adjusted gross income for 2008 (question 86)?

How much did your father/stepfather earn from working (wages, salaries, tips, etc.) in 2008 (question 89)?

So far i think the first question does not include taxes…but then if my mother does not work, the second question would be THE EXACT same answer as the first ! That sounds weird – does that mean that the second question is actually after income tax deduction ?

help!
Then that means that the wages, salaries, tips are greather than or equal to AIG because its the same thing as AIG except for the deductions ?

Answer: Adjusted gross income (AGI) is income *minus deductions.*

How much someone earns is not the same because deductions haven’t been figured yet.

Items on Amazon Right Now for 2008 Tax Deduction Tips:

For some, tax season not yet over

You filed your federal tax return, cashed your refund check and likely aren’t thinking about ta

Tips from the IRS – 2008 tax return–don’t miss out on free money!

Question: What are the tax consequences to taking on a roommate?

I am contemplating renting out the 2nd bedroom in my new home; roommate will share all common space, including kitchen, w/d, living areas. How do I 1) Minimize taxable income? I’d like to avoid raising my AGI: what are the situations, if any, that a roommate is considered a boarder and not a tenant, and in that event, would her monthly “rent” still be taxable? Intuitively I know this must all be considered [taxable] income no matter what legal label you give the roommate but then does this mean every renter on CraigsList who doesn’t report their monthly rent received is committing tax evasion?
2) If this MUST be a l.l/tenant relationship, then what are other tips for maximizing deductions? I know if I rent out a residence in which I also live I am limited in my schedule E deductions to a certain amount. Do my HOA fees become [partially] deductible if and when I’ve converted my primary residence into a rental? What is the best among methods for depreciation? Other expenses?

Answer: well, if your renter is claiming the rent she pays to you, you will have to claim the income you receive from her. You don’t pay more taxes, you just don’t get as big of a tax break. But, I live in MI, it may be different in your state

Items on Amazon Right Now for Depreciation Expense Deductible:

Toromont Announces Results for the Second Quarter of 2010 and Increases Dividend

TORONTO, ONTARIO–(Marketwire – 08/12/10) – Toromont Industries Ltd. (TSX: TIH – News ) today reported financial results for the three and six-month periods ended June 30, 2010. ————————————————————————— Three months ended June 30 Six months ended June 30 ——————————————————- $ millions, except per share amounts …

Collecting Holly Berries

Items on Amazon Right Now for Deductible Educator Expenses:

Community Calendar

Business

Question: Can u rollover Personal Tax Deductions into the next year? Or can only businesses do this?

I was wondering if u can save tax deductions from year to year to make sure that u are paying in the most optimal tax bracket? I have hear of businesses doing this… But I want to know if this is possible for individuals. Please post links that i can read up on for more information. Your answers are appreciated. Thank you.

Answer: Yes, in a way. You can move deductions by changing when you pay them. For example, make all your charitable contributions in January and December of even years, give nothing in odd years. If you have medical bills at the end of the year, but not enough to deduct, pay them in January and maybe you will have enough to deduct in the next year. If your real estate taxes are paid in installments and one or both of them are due near the end of the year you may be able to do a similar thing (if you pay them directly).

Items on Amazon Right Now for Individual Tax Deductions:

Kitco News

(Kitco News) — A movement is afoot in the U.S. Congress to revise or repeal a portion of the health-care act, passed earlier in the year, that critics say has costly implications for bullion and coin dealers and also raises privacy concerns.

IRS Self Employed Tax Deductions & Write Offs 2010, 2011

Question: I’m having troubles with turbotax 2009?

I have used turbotax for three years now, and loved it. This year, it’s much less user friendly. I can’t “live chat”, and I have some questions. It’s not allowing me to do “standard” deductions for medical expenses. It’s not allowing me to itemize work expenses, gas, etc. Most importantly, it’s not allowing me to enter my rent…which has doubled since last year. Also, I’m nervous, bc my divorce papers say my ex is supposed to claim my son until he’s “emancipated”, and I’m supposed to claim my daughter. However, my son has not seen my ex in a year and a half. so it seems to me I should claim both. What happens if he claims my son, even though he hasn’t seen him in so long, and so do I? What happens ifwe both claim one of the children?

Answer: There is no “standard deduction for medical expenses” or rent or work expenses. You itemize or take standard deduction. Pick one. General rule (works 90% of the time): If you aren’t buying a house, you take standard deduction.

IRS could care less about your divorce agreement. The parent who provides the majority of the child’s support is entitled to the exemption. If two people claim the same child, the one whose return is processed first will sail through then IRS will sort out who is really entitled to it. This question shows up regularily in Tax Court and the custodial parent almost always wins the fight.

Items on Amazon Right Now for Itemized Deduction Medical Expenses:

Saving on Taxes in a Lousy Economy (The Tax Guy)

The upside of the gloom? Some valuable tax breaks.

Baucus Bill Insurance Mandate: Tax on Sick to pay for Healthy