The IRS Deductions Blog

Posts Tagged ‘deduction’

Question: Does my car purchase qualify for Obama’s stimulus (deduction of sales tax?)?

While buying a new car this weekend, I found out I can deduct the sales tax on my 09 taxes. This past June I bought my wife a new car. Arizona only charged me $260 in sales tax (diff between trade in and new) but now that its being registered in California the DMV wants to collect $2800 in sales tax.

Answer: Your sale documents will reflect that the vehicle was purchased in Arizona which will limit your deduction to what was paid/collected to AZ. As for the taxes that CA will be charging you for registering the vehicle in CA, you will only be able to claim those taxes if you are itemizing your deductions for the year and the CA taxes were paid during 2009. Deductions can only be claimed for the year in which the fees were actually paid.

Items on Amazon Right Now for Tax Deduction For New Car Purchase:

Retirement Tips For Generation-X

Gen-X investors don’t have to let economic disappointments derail their plans.

NEW CAR TAX BREAKS

Question: What kind of tax credit/deduction should i take for education expenses ?

My wife will be graduating from college this spring. She has 20K in debt. She does not work while I work making 70K/year.

Answer: Your wife should have received a 1098-T from the college she is attending for all tuituion and fees paid in 2007.

Generally, the Hope Credit/Lifetime Learning Credit is the most advantagous since it reduces your tax liability dollar for dollar, however you could choose to take the Tuition and Fees deduction instead.

Use Form 8863 to take the credit. Fill out this form using the amounts from the 1098-T your wife received.

You can not deduct or claim a credit for the cost of the GMAT test because that is not considered qualifying tuition and fees at an eligible educational institution. See the instructions for Form 8863 for definitions.

As far as paying off her debt, if the 20K is in the form of student loans, the interest paid each year is deductible ($2,500/yr max) on Line 33 of Form 1040 – Student loan interest deduction.

Items on Amazon Right Now for Tax Education Deduction:

It’s not too late to take advantage of college tax credit

This tax credit is part of the American Recovery and Reinvestment Act of 2009 and is available through Dec. 31, 2010. It can be claimed by eligible taxpayers for college expenses paid in 2009 and 2010.

Helping Parents Pay for Education

Question: Federal Income Tax question – Car donation for charitable deduction?

I am a 21 yr old full time college student who is still a dependent on my mom’s tax return (she itemizes). I would like to donate my car which has a Fair Market Value of $5,000, to take advantage of the charitable deduction on my taxes. I currently have $300 in deductions without the charitable deduction.

Answer: The first two people who answered the question are correct, but they missed one point. If the charity uses the car as part of its mission (A church providing a car for the minister, etc.), then the Fair Market Value is used, but if the value is more than $5,000 you need to have it appraised. The appraisal report (don’t forget to keep a copy) must be attached to the tax return.

Now, back to reality. Your Itemized Deductions must exceed $5,700 for you to get any benefit from them. Also, even if you have other deductions that total $5,700 (meaning that the $5,000 is fully utilized), you only save a fraction of the FMV. If you are in the 15% tax bracket, the $5,000 donation would save you $750 in taxes. In other words, you are better off financially if you sell the car.

Items on Amazon Right Now for Tax Deduction Car Donation:

Community Calendar: Library book sale kicks off with preview day on Tuesday

To list an event happening in Greater Haverhill, submit no later than 10 days before The Haverhill Gazette’s Thursday publication date. Listings run as space allows. thursday, Sept. 16 Zumba Gold: Class geared toward active Baby Boomers and seniors, led by certified instructor Stephanie Smith Thursdays at 9:30 a.m. at Citizens Center, 10 Welcome St., Haverhill. $5 per session.

Car Donations-Car Charity Donations-$500 Tax Deduction PLUS $1000 GIFT CARD

Items on Amazon Right Now for Cfc Tax Deduction:

1.3 Withdrawal of agent’s copies of some PAYE and SA forms

HMRC has notified the professional bodies that as part of the drive to save costs it plans to stop issuing copies to agents of some mail which is sent to clients.

Dual Resident Corporations Simplify Taxes

Question: what were the medicare premiums in 2009 for both A and B?

I’m preparing 2009 taxes for my father was was deceased in Jan 2010. He had many medical expenses in 2009, so I’m claiming them for deductions. In the grand paperwork shuffle, I cannot seem to find any paperwork denoting the premiums for Medicare part A & B for 2009…anyone know what the monthly or yearly costs were?
…he was not my dependent…I am filing HIS return, not mine. You are correct though that Medicare premiums are NOT allowable deductions…I misread the turbotax prompt.

Answer: Do you mean that he was your dependent in 2009? Are you claiming his medical costs as your out of pocket expenses?

The Medicare premium is deducted from his Social Security check before he receives it. Thats why you don’t see any paperwork. The amount was $96.40 per month and now it is $96.50 per month for one person. He also must have paid the 20 per cent that Medicare does not pay, or he may have had a gap insurance policy. That costs about $150 a month unless he had zero share of cost Medicaid which pays that.

I hope you are correct about using his out of pocket costs as a deduction on your tax return.

Items on Amazon Right Now for Tax Deduction Medical Expenses 2009:

Woman pleads guilty to falsifying tax returns

A woman who was a manager for Jackson Hewitt has pleaded guilty to aiding and assisting in the filing of false returns.

Tax Forms & Deductions : Can I Deduct My Pet’s Medical Expenses on My Taxes?