The IRS Deductions Blog

Posts Tagged ‘irs’

Question: Can the standard mileage deduction save me from taxes this year?

I receive a 1099- misc. I use my own vehicle and log about 30,000 business miles a year. My gross income is 17,500 a year. Will that save me from paying taxes? I used Turbo Tax and when I entered that figure the calculation went from owing 1,385 to a refund of 10.00. Can that be right? I have always used my actual expenses before and this year I purchased a new vehicle and was eligible for the standard mileage deduction. I have always had to pay about 1,000 each year and this was a shock. I re-did it several times and it came up the same each time. Can that really be correct. I do not want to mess up my taxes.

Answer: The mileage deduction for 17,500 miles is $8,489. If you are in the 15% tax bracket, this is a tax savings of $1,273. Plus, you will have reduced your income subject to self-employment taxes, for an additional savings of up to another $1,273.

So, your figures are very possible. With this much mileage, the per mile deduction is usually more advantageous than actual expenses.

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Question: Tax calculation and deduction help?!?!?

am interested in learning how to calculate my own Tax Deductions. I have some, I know that are deductible (i.e. daycare, mileage to and from work, student loans, gas receipts). I would like to find out if there is a way that I can calculate this to see what I might be getting back from taxes. My husband is military and he and I are planning on using his mileage and gas receipts as well for his commutes while he was TDY.

P.S. I was self-employed until July 2008 and I am a home-owner. If this helps any.

Thanks.

Answer: For daycare and student loan interest, you don’t even have to itemize. If you qualify for a child care credit, and you probably do, you fill out form 2441 with your return.

If you are paying on a student loan. you can probably deduct some or all of the interest you paid for the year, and again this has nothing to do with itemizing. You deduct it in the Adjustment section at the bottom of page 1 of your form 1040 or 1040A.

Gas or mileage expenses (it’s one or the other, not both) get more complicated. Commuting expenses, mileage to and from work, are NOT deductible so you are out of luck there.

Without knowing what Itemized Deductions you might have, hard to be more specific on how to fill out Schedule A. On a joint return, you get a standard deduction of $10,900, so there’s no point in itemizing unless your itemized deductions are more than that.

Your self employment income will introduce some complexity to your return also.

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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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Question: what is the tax deduction percentage if we give commission to our commission agents at our land brokerage?

Answer: Under what country’s tax rules are you working? Are the commissions paid to the commission agents a fully deductible business expense (dumb question perhaps, but the agents could be your children, or they might be a non-profit organization, etc.)?

If they are a legitimate business expense and you are in the U.S, they would be a 100% deduction against the proceeds of the sale or the commissions that you receive.

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Question: Can I claim my girlfriends kids as dependents, and let her claim them for the EIC?

I live with my girlfriend and her two kids. She made $12,000 in 2009, so I know that I cannot claim her as a dependent, however I supported all of them throughout the year. Can I claim the kids as my dependents, to get the standard deduction for them and the child care credit? And then have her claim them for the EIC, as non-dependents, so that she will reap the benefit of the EIC due to her low income?

Answer: No.

You can’t claim them because their mother’s income is over $3650 for the year.

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