The IRS Deductions Blog

Posts Tagged ‘itemized deduction’

Question: I’m having troubles with turbotax 2009?

I have used turbotax for three years now, and loved it. This year, it’s much less user friendly. I can’t “live chat”, and I have some questions. It’s not allowing me to do “standard” deductions for medical expenses. It’s not allowing me to itemize work expenses, gas, etc. Most importantly, it’s not allowing me to enter my rent…which has doubled since last year. Also, I’m nervous, bc my divorce papers say my ex is supposed to claim my son until he’s “emancipated”, and I’m supposed to claim my daughter. However, my son has not seen my ex in a year and a half. so it seems to me I should claim both. What happens if he claims my son, even though he hasn’t seen him in so long, and so do I? What happens ifwe both claim one of the children?

Answer: There is no “standard deduction for medical expenses” or rent or work expenses. You itemize or take standard deduction. Pick one. General rule (works 90% of the time): If you aren’t buying a house, you take standard deduction.

IRS could care less about your divorce agreement. The parent who provides the majority of the child’s support is entitled to the exemption. If two people claim the same child, the one whose return is processed first will sail through then IRS will sort out who is really entitled to it. This question shows up regularily in Tax Court and the custodial parent almost always wins the fight.

Items on Amazon Right Now for Itemized Deduction Medical Expenses:

Saving on Taxes in a Lousy Economy (The Tax Guy)

The upside of the gloom? Some valuable tax breaks.

Baucus Bill Insurance Mandate: Tax on Sick to pay for Healthy

Items on Amazon Right Now for Federal Itemized Deduction Worksheet:

Medical Expenses: What Can and Can’t Be Written Off

You may be surprised to find the following are Deductible Medical expenses, which can save you a lot of money. 

Tax Credits With Solar Energy DIY Solar

Question: Rental property – how to report Mortgage interest paid and insurance paid?

If I have a rental property, when I file the income tax return, for the mortgage interest and insurance paid, should I report under (1) “Rental Real Estate”, 1040, line 17, or (2) Schedule A, Itemized deduction?

Answer: How many days have you rented the home? Have you used the home for personal use.

If strictly a rental property then report on Schedule E.

Items on Amazon Right Now for Itemized Deduction Mortgage Interest:

Learn from your tax return

Whether you eagerly completed your taxes in late January or will just slip in under the April 15 deadline, savor the relief you feel once your return is finally in Uncle Sam’s hands.

Question: Do contributions to the Oregon state 529 Plan count as an itemized or standard deduction?

I’m trying to figure out what the tax savings are if I set up a 529 plan through Oregon College Savings and make a $2000 contribution each year. This will help me decide if this is a better or worse option than setting up a 529 through Vanguard whose 529 plan is with the state of Nevada.

Answer: You do not get a deduction on your federal return for contributions to a 529 plan. The benefit of the 529 plan is when the money is withdrawn. If it is used for education purposes, the earnings in the 529 plan is tax free for federal tax purposes.

Depending on the state, there may be current tax benefits, but that depends on the state, and it also typically requires you to be resident in that state. For example, I live in NY. If I contribute to the NY 529 plan, I can deduct the amount of the contributions, up to a maximum of $10,000 per year, on my NY state return. I do not get the deduction if I contribute the money to any other state’s 529 plan, it has to be NY.

Items on Amazon Right Now for Itemized Deduction State Tax:

Miscellaneous Tax Deductions

These catch-all expenses offer another way to cut your tax bill, but only if you have enough of them.

Budget close to being finalized