The IRS Deductions Blog

Posts Tagged ‘deductions’

Question: Can I change my state tax return to standard deduction from itemized even though I didnt change my federal?

I am being audit for state tax and they are requesting my doc and receipts for my Itemized Deductions…I did not keep anything…can I just take the standard for my state instead of itemized like i did for my federal. This is for NC state return

Answer: If you change your state return, the NC Department of Revenue will notify the IRS about the changes.

Your best bet is to go back to the charities, etc. and ask for duplicate receipts. If you paid by check or credit card, go through your bank records.

It is unusual for NC to audit your itemized deductions without anything from the IRS first.

Suggestions for the future:

1. Keep all receipts in a box or envelope.

2. Get a scanner and scan the important documents. Use an on-line service (Mozy at Home, SugarSync, etc.) to keep copies in case of a hard drive crash.

Many taxpayers itemize their deductions on their federal return but take the standard deduction on their state tax returns because after subtracting off their state income taxes, their deductions are below the standard deduction for the state.

I hope this helps.
Gary

Items on Amazon Right Now for Tax Itemized Deductions:

CPAs year-end tax-savings tips

The Queens/Brooklyn Chapter of the New York State Society of Certified Public Accountants (NYSSCPA) recommends these Year-end Tax Tips for consumers:

Tax Tuesday – Itemized deductions

Question: Can someone please explain this better for me?

Maybe I’m just slow, but I’ve read this a few times and it’s just not “clicking.”
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Deduction of state and local sales taxes: The measure allows citizens who do not pay state income taxes to deduct the amount of sales tax they pay over a year from their federal income tax for two additional years. States that benefit include Texas, Nevada, Florida, Washington and Wyoming. The measure would cost taxpayers $3.3 billion.

http://www.cnn.com/2008/POLITICS/10/02/bailout.pork/

Answer: It means that if you live in one of the few states that do not have a state income tax, then you can deuct what what you pay yearly in state sales taxes from your net income, before figuring your Federal Income tax.
Example: Net Income =$50,000,000.00
State Sales Tax Paid= $500.00

50,000,000.00 – 500.00=49,000,500.00

So you would only have to pay Federal Income Tax on $49.000.500.00.

You’d’ probably save about $45.00.00 in taxes. Whooopie!

It’s one of those deals that sound a whole lot better than they actually are.

Good Luck

Items on Amazon Right Now for Sales Tax Deduction Federal Taxes:

Debt & Taxes: Will America Grow Up?

Two new proposals to get serious about the deficit collide with the same old politics, say Peter Coy and Heidi Przybyla

#128 – Ask A Reformed Socialist – Wrecking American Culture – Federal Sales Taxes

Question: Is Turbo Tax easy to use?

I have always gone to HR Block and paid around $200 bucks. My return is fairly simple (married with 1 kid). My deductions are charity, mortgage interest, and a few other simple things.

Do you recommend?

Answer: Yes, IF you have some concept of what income tax returns are all about. People get in trouble using tax software because they don’t understand what the program is promptly for and enter the wrong information.

Items on Amazon Right Now for Turbo Tax Charity Deductions:

2010 donations end soon

In this season of giving, you may have visions of plum Tax Deductions dancing in your head. Let’s be honest — sometimes we give because it’s a good cause or just the right thing to do. But sometimes it’s because we look at the calendar and realize the year is almost over and we need some more write-offs.

Get Your E-File On-Turbo Tax Rap

Question: by claiming 0 deductions do you get more tax refund?

Answer: Yes, but you get a smaller paycheck in exchange for that interest free loan to the government.

I’m assuming that you are referring to withholding allowances on your W-4 at work. When you claim 0 your employer takes out more money from your pay. You get the excess back when you file your tax return. All that you are doing is giving the government an interest free loan for up to 16 months.

If you’re talking about $0 in Itemized Deductions then that would LOWER your refund since your taxable income would be higher. If your itemized deductions are less than your standard deduction you would normally take the standard deduction since that would lower your tax and increase any refund that you are getting.

Items on Amazon Right Now for More Tax Deductions:

Tax trouble no cause for alarm: Phoenix

The chief executive of Wellington Phoenix FC says the latest tax trouble the club is facing is no cause for alarm or rash reactions

Finding More Tax Deductions for Small Business Owners in 2010, 2011

Question: Would you be in favor of individuals and businesses paying one flat tax with no deductions? ?

This would be payable to the Federal Government. They would give each state and local government a percentage.This would eliminate all other taxes including local, state and sales.

Answer: One needs the details. At 15.3%, the FICA tax takes in almost as much as income tax. So, 15.3% FICA plus about 15-16 “income” tax. We’re talking about 30+% minimum.

I believe the states have a constitutional right to raise their own taxes, so this couldn’t affect state tax.

Still, at that, 30+% tax, there will be some winners (high income earners) and some losers (the poor, big time). Perhaps something like the earned income credit, to refund some of the tax to the low income workers?

Need more details.

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Student’s tax claim upheld by High Court

Hundreds of thousands of youth allowance recipients will be able to claim their education costs as Tax Deductions as a result of a landmark High Court judgement delivered today in Canberra.

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