Tag: itemized deduction

Posts Tagged ‘itemized deduction’

Prepare for the 2019 Tax Season!

Posted by Manisha Hansraj on November 5, 2018
Last modified: November 5, 2018

tax cuts and jobs act

2018 is coming to an end.

It seems like the year went by so quickly. Now, are you ready for the new tax season? The 2019 tax season brings in a variety of changes that will ultimately affect how you file and Form 1040.

Read below to find out steps you need to take for your 2018 tax return.

Check your withholding

Due to the Tax Cuts and Jobs Act (TCJA), taxpayers may receive a lesser refund or a tax bill because of their decreased withholding. We advise that you should definitely check your withholding if you have a two-income family, work multiple jobs or part of the year, have children to claim the Child Tax Credit or older dependents, you itemize your deductions on prior year returns, receive high tax refunds or tax bills for the prior year or high-income taxpayers in general. Be advised that if you don’t have enough income tax withheld from your employer, you can be subject

If you did not fill out an updated W-4 for 2018, click here to find out if you should adjust your withholding with the IRS Withholding Calculator.

The standard deduction increases

The TCJA doubles all filing status’ standard deduction. Below you will find out how next year will be different. (more…)

Itemized Deductions vs. the Standard Deduction

Posted by admin on November 29, 2016
Last modified: January 5, 2017

What is the difference between claiming the standard deduction and itemizing deductions?

In general terms, a deduction is a certain amount you are allowed to exclude from your income. This means that you are taxed on a lower amount of income, and thus pay less in taxes. While not as valuable as tax credits – which directly decrease your tax liability – deductions can still reduce your tax burden significantly.

There are two ways to claim deductions.

  1. Itemize deductions. Add up all of your allowable expenses and subtract them from your income.
  2. Claim the standard deduction. Deduct the basic amount available to everyone.

While preparing your taxes you need to figure out whether you get a bigger tax break from itemizing your deductions or claiming the standard deduction. Most people end up claiming the standard deduction, but some people have enough allowable expenses to make it worth their while to itemize deductions.

The Standard Deduction

The standard deduction is a fixed dollar amount that reduces the amount of income on which you are taxed. The amount of the standard deduction depends on your filing status and whether you can be claimed as a dependent on another return. For the 2013 tax year, for example, the standard deduction is
(more…)

Can I Deduct Overlooked Expenses from Previous Years on This Year’s Taxes?

Posted by Michelle O'Brien on October 26, 2016
Last modified: December 21, 2016

Lumping overlooked tax deductions in with this year’s return is hardly an option.

Generally speaking, you cannot deduct expenses from a previous year on this year’s tax return. You can only deduct expenses in the year that you paid for them.

Each tax return reports finances for its own year and each of those years needs to be kept separate. Deductions, income or anything else from a previous year cannot be claimed with the current year’s tax information.

*Note: One of the exceptions to this rule is the tuition and fees deduction. This tax break allows you to claim qualified education expenses from the previous year as long as they were for school sessions that began in January-March of the tax year you are currently filing for.

File an amended return if you can

If you’re completely gung ho on finding a Plan B, we may have a solution for you. You can file an amended tax return if you discover a tax deduction you missed in a previous year. What’s the catch? It needs to be a completely legitimate expense. On top of that, it needs to be within the three-year time frame from the deadline date the original tax return was due.

To file an amended return, here’s what you should do: (more…)