The IRS Deductions Blog

Posts Tagged ‘deductions’

Question: In New York State what are the allowable Tax Deductions for contributions to the NYS-sponsored 529 plan?

Answer: You’ll get a New York State income tax deduction of up to $5,000 ($10,000 for married couples filing jointly) for contributions if you are a New York State taxpayer. If you are a resident or taxpayer of another state, you should consider whether that state offers a 529 plan with tax advantages or other benefits that are not available through this Program.

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Tasum: expenses allowable as deductions under the head ‘income from other sources’

Question: Medical Tax Deductions ?

I know you can claim any amount of medical costs that exceed 7.5% of your gross income but – does that medical cost include the amount of money that is taken out of your paycheck each month from your employer to pay for health insurance. I looked on google a lot but havent seen anything that specifically says that it does. (although i assume it does).

Also on the same topic, i know you can claim the cost of modifying a car to accomidate a wheel chair. i.e. adding a wheelchair lift or ramp. But lets say you dont have the car yet and buy one that allready has a ramp/lift. Can you claim the entire cost of the 40,000$ van? HA! i assume not. But if not how do you figure the cost of the ramp/lift part of the car to claim just that part? (without getting audited the following year). Thanks – hope someone knows more on this than I.

Answer: 1) Generally, No. That amount usually comes out of your paycheck “pretax” so you have already received the tax benefit. In the highly unlikely event that it is deducted after tax, then you could deduct it.

2) Entire cost? No. However, you can deduct the difference between what the ramp installed van cost and what a non-ramp installed van would have cost.

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Question: Overpayment of Income Taxes for Tax Year 2004?

Dear All,

In prior years, I have been doing taxes using just the 1040 booklet and calculate all the numbers on my own. This year, I bought a software and to much of my surprised, I actually should have itemize my deductions vs. taking the standard deductions. This saved me about $500 in taxes.

I realized that I had overpaid 2004 taxes because I used standard deductions, rather than itemize my deductions. Can I amend my 2004 tax returns and use itemize deductions so I can get some refund back for both Federal and State(CA)?

If so, which forms should i use?

Thanks

Kaya

Answer: Yes you have three years from when you file to amend your taxes. You would file a 1040X. You can probably find it on the website www.irs.gov or go to a local H&R Block and have them do a FREE double check challenge. They only charge you if they get you more money back or save you more money on your taxes. If you do it on your own, then the 1040X is what you would file.

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IRS write offs

Question: What are some ways to minimize tax for self employed with 200k annual income?

I live in California, with 200k annual income from an online biz.
the only thing i know that i would qualify is the SEP IRA, which i can contribute up to approx 20% of my income to. Other than that and the usual biz expenses/deduction, what other ways i can do to minimize the tax for state and federal?

Answer: If you are making that kind of money in your own business I would hope that you would have hired an experienced accountant. You do not say if you are a S Corp, a LLC or if it is a sole proprietorship. Hire a good accountant to help you work through all of these details. You also didn’t say if you had sent in estimated taxes.

Congratulations on doing so well in your online business! It is past time to organize your profitable business.

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Herbst releases tax return, Thornton questions motive

First Selectman Timothy Herbst qualified for a $6,400 tax refund last year, spent more than $4,000 installing windows in his newly purchased home, and paid $110 in personal property tax on his six-year-old Ford Explorer. In a move more common among candidates for president than first selectman, Herbst released his 2010 tax return last week. He said the move was “in response to resident inquiries …

Self Employment Tax Tips : Debt Cancellation: Self Employment Tax

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