The IRS Deductions Blog

Posts Tagged ‘deductions’

Question: what is maximum limit of IT for senior citizen/retired defence officers?

I Tax Deductions AT SOURCE

Answer: income up to 2,40000 rupees is exempted from income tax under indian rules according to my knowledge

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IRS provides tips, points out pitfalls

For 26 years, Frieda Fulmer has volunteered to help senior citizens fill out their income tax returns. During that time, she said she has often been asked the same question: At what age do people no longer have to pay income taxes?

Benefits of Filing a Tax Return : Tax Preparation Services Canada

Question: irs.gov: Line 39a, by checking yes: born before 1942, what effect on the standard deduction?

Re. 39a, by checking yes to born before 1942, what effect does it have on my choice of the standard deduction…more or less than the 5,150

Answer: It will increase your standard deduction to $6,400. For full details check the instructions for form 1040 at the IRS website below. Page #35

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Tax news you need to know

March means that winter is finally coming to an end and the 2010 tax return filing deadline is a month away. Now is the time to gather all of your W-2s and 1099s to determine what income can be included on your 1040 and go through your checkbook and credit card statements to see what may deductible.

Charity & Christian Doctrine : How Do Charitable Tax Deductions Work?

Question: Mom and I sold our condo, how do we each report the taxes?

My mom and I owned a condo for 1 yr and 9 months in WA state. We sold it and we’re trying to figure out how to split the resulting profit (approx $40K total). We each received wire transfers from the escrow company for $20K. Now it’s tax time and we’re trying to figure out what deductions are available, and how to report any applicable taxes and what the proper forms for this might be? In particular, we are wondering if we can include the closing costs we incurred as an adjustment to our cost basis and ultimately reduce the portion of the $20k that is taxable. Also, as I changed jobs 6 months after we bought it (bought in June 2004, sold in Feb 2006). Wondering if I can take a partial exclusion on capital gains due to having job location changes in Nov. 2004, and again in July 2006). Neither job change was out of state but did effect length of my commute. Thanks so much!

Answer: The first answer is incorrect in the final paragraph. You can, indeed, claim a partial exclusion provided you meet certain conditions. See the link below, in particular page 15. The issue I see is that you changed jobs in Nov 2004 but did not sell it until Feb 2006. That might be viewed as an excessive length of time to hold the property after changing jobs.

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Ten tax tips to save you money

Millions of Canadians pay more tax than they should. Moneyville’s weeklong continues with the sorts of tips that will help you avoid the same fate.

Homebuyer tax credit information

Question: What IRS form do you use/How do you file to deduct stock losses?

If overall your stocks lost money in a year (these are short term trades, closed and realized all in 2006), how do you get the fullest tax deduction from the IRS?

Answer: You use Schedule D. It is the same form for reporting gain. You can deduct as much loses as you have against your gains for the year. BUT!! You can deduct only $3000, if you are married, against your earned income. It has been the same amount for over 50 years that I know of. That was back when $3000 was equivelent to $30,000 today. You can carry forward your losses for 2 addional years, no more.

You get the fullest tax deduction by selling all the loosers to offset as many gains as you can before year end. If you have too many realized loosers at year end then you can be in serious trouble. As were those dot com speculators in 2000.

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Your tax questions answered: Investments

Late last year you caught a break. Congress reached a deal that extended the Bush-era tax cuts for two years and renewed perks like the sales tax deduction and the tuition write-off for non-itemizers.

Senate Session 2011-02-01 (17:44:02-18:48:18)

Question: Is Turbo Tax really that easy to use?

I see the commercials on just about every channel on how easy it is to use. I wish they would actually show what type of questions are asked in details to give me a good idea. I am self employed from home and have to manage personal and business related info for deductions, and I really do not trust that my CPA is doing all she can to give me the best discounts (especially since I make little money but owe thousands of dollars in taxes per year). After taxes are paid I hardly have any money left which doesn’t seem correct to me. Plus I have created my own script that sorts out all of my business expenses by category, so all of the numbers are added up already and just have to be inserted into the tax fields so I am sure I should be able to do that.

However I am afraid to risk doing it myself if there is something I do not understand, since such a mistake could cost me thousands of dollars. I am located in TN, USA btw.

Answer: turbo tax is probably the worst tax program out there on the market, even the known credits that most people are entitled to, it will short change people on their refunds not just by a few dollars but hundreds.

If your not pleased with your CPA then why not look for someone else? If you do not make quarterly tax payments you might want to consider it.

Your right even a simply mistake can causes you thousands of dollars not to mention an audit which can take up valuable time.

A tax program is only as good as the persons knowledge of tax, there are many deductions that these tax programs do not point to for a lack of a better word, if you do not already know your allowed to take them.

Im pretty sure you can try turbo tax for free, just get your refund amount and compare that to what your CPA comes up with. Its also true some CPA just want the money and don’t try to make their customer happy, but that can be said for other tax preparers.

Ask your CPA questions, audit your return, even though a CPA does your return, ultimately your responsible for what goes on there.

Federal tax doesn’t make a difference of what state you reside, state taxes are the only thing that differs from state to state.

Go with God.

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Senate approves tax code changes

SALEM — You may want to hold off on doing your taxes this weekend if you added an adult kid to your health plan last year, paid college tuition or are a teacher who paid for classroom supplies from your own pocket. For the tens of thousands of Oregonians who …

Creating A Deduction Category