The IRS Deductions Blog

Posts Tagged ‘articles’

Question: How do deductions work?

In the 2010 tax year I will be, for the first time ever, itemizing and not using standard deductions. I’m going to have many deductions, from moving expenses, to job finding expenses, to job-related depreciation expenses for cell phones and desks. I will also qualify for the first time home buyer’s tax credit. How do deductions affect tax obligation?

Answer: They reduce your taxable income. Whether itemizing will be more advantageous than claiming the standard deduction is an unknown until you “run the numbers” both ways.

Tax credits are a separate thing. A tax credit directly reduces your total tax owed.

Items on Amazon Right Now for Standard Deductions 2010:

Remedent Reports Fourth Quarter and Year End Results and Remedent to Host a Conference Call at 11:00 A.M. EST, Tuesday …

DUERLE, BELGIUM–(Marketwire – July 15, 2010) – Remedent, Inc. ( OTCBB : REMI ), an international company specializing in research, development, and manufacturing of oral care and cosmetic dentistry products, reported results for the final quarter and for the year ended March 31, 2010 (in US Dollars).

Standard Deduction 2010, 2011

Question: I need to know if 1 point paid to my lender and the closing cost on the house purchased is tax deductible?

For a new home owner, what are tax deductible, besides 1 point and closing cost………how about downpayment,
how about the fees paid for the inspection of the house, lock changed

Answer: No downpayments are not deductible on the Schedule A

The only thing that might be deductible if you are Itemizing rather than taking the Standard Deduction is
\
Points/Loan Origination Fees
PrePaid Mortgage Interest
Prepaid Real Estate Taxes

See Publication 936 and 530 for more Information

http://www.irs.gov/publications/p530/index.html

http://www.irs.gov/publications/p936/index.html

Update

Inspection Fees are not deductible nor is the lock change

Items on Amazon Right Now for Tax Deductible Points:

HSN, Inc. Reports Fourth Quarter and Full Year 2009 Results

For the Fourth Quarter 2009:

ACCEPT – Russian Roulette

Question: Tax question: Lawyer Fee Deduction?

I had to pay a lawyer to help me get an Inheretance IRA, the lawyer obtained that i was a benificiary and handled getting me the money.

I understand that legal fees paid to obtain taxable income are deductable. Can you tell me if this is correct and explain.
Thanks

Answer: Yes, it’s correct. The deduction is not taken directly against the taxable IRA distribution, though. The distribution is reported on Form 1040. The deduction is taken on Form 1040 Schedule A under ‘Miscellaneous expenses’. Unfortunately, any miscellaneous expenses are subject to the 2% rule. You have to subtract 2% of your Adjusted Gross Income from Form 1040 from your total miscellaneous Schedule A items, and you get to deduct whatever is above that 2%. In many cases, the 2% wipes out any tax savings. Unless your legal fees were substantial, you may not benefit, But it’s worth figuring.

Items on Amazon Right Now for Lawyers Tax Deductions:

Obama urges Dems to pass health care overhaul

WASHINGTON (AP) — Casting health care overhaul as a legacy for the American people and failure as politically unthinkable, President Barack Obama on Sunday rallied Senate Democrats to deliver on their party’s half-century quest to expand the social safety net by providing access for all.

Tax Deductions