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1/16/2020 9:48:49 PM
Posted: 1/1/2007 6:10:03 PM EST



do you do it..is it worth it if you don't have a lot of things to deduct like say under $1000 worth???

plus any Tax return horror stories?
Link Posted: 1/1/2007 6:14:55 PM EST
Link Posted: 1/1/2007 6:18:43 PM EST

Originally Posted By Zhukov:
If you only have $1000 to deduct, then no. Your personal exemption (Don't know what it is for this year) is much higher than that. You'd be screwing yourself royally.

Generally, if you have a mortgage and/or property taxes, you have more then enough deductions to itemize.

The easiest way to figure it out is to get a program like Tax Cut or Turbotax and let it figure it out for you.

Typical deductions:
1) Property taxes
2) Mortgage interest
3) Cash contributions to church/charity
4) Charitable donations of items to Goodwill


thats what I thought but i wanted to check as Im no tax expert...
Link Posted: 1/1/2007 6:21:15 PM EST
[Last Edit: 1/1/2007 6:23:34 PM EST by DriftPunch]
It depends on what you make and where your are. If you make enough money AND live in a high tax state (or a low tax state with any form of income tax), the state tax deduction alone may get you over standard. Interest being deductable, having a mortgage or decent sized (owner occupied) equity loan will typically push you way over the standard deduction as well.

If you don't have a business, don't make much (that state income tax), or don't live in a high tax state (property etc...), or don't have a mortgage/equity loan you won't likely have enough to even come close.
Link Posted: 1/1/2007 6:21:56 PM EST

Originally Posted By Zhukov:
If you only have $1000 to deduct, then no. Your personal exemption Standard Deduction is much higher than that. You'd be screwing yourself royally.


Fixed.
Link Posted: 1/1/2007 6:23:02 PM EST

Originally Posted By BURN:


do you do it..is it worth it if you don't have a lot of things to deduct like say under $1000 worth???

plus any Tax return horror stories?


If you have less than your Standard Deduction, it isn't worth it... IIRC, the 'standard deduction' is 5K for single or married-filing-separate, and higher for married-filing-joint

If you want the 'easy' route, use the IRS's free electronic filing system or get a copy of TaxCut or TurboTax - these programs will automatically recommend which route you should go...

Far better value than HR Block or similar...
Link Posted: 1/1/2007 6:23:34 PM EST
Turbo tax DELUXE. Do the itemized deduction. Turbo tax will get the best refund for you.
Link Posted: 1/1/2007 6:24:52 PM EST
[Last Edit: 1/1/2007 6:25:50 PM EST by DriftPunch]

Originally Posted By Dave_A:
get a copy of TaxCut or TurboTax ...

Far better value than HR Block or similar...


TaxCut is produced by H&R Block, but I know you mean 'going to' H&R.
Link Posted: 1/1/2007 6:27:31 PM EST

Originally Posted By Zhukov:
...

Typical deductions:
1) Property taxes
2) Mortgage interest
3) Cash contributions to church/charity
4) Charitable donations of items to Goodwill


So just to clarify, this list does not include prostitution?
Is it all inclusive?
Link Posted: 1/1/2007 6:28:39 PM EST
Link Posted: 1/1/2007 6:30:11 PM EST

Originally Posted By CARFan:


So just to clarify, this list does not include prostitution?
Is it all inclusive?


that would go in the "business entertainment" category.
Link Posted: 1/1/2007 6:30:16 PM EST
If you make more than min wage and have a mortgage, and do not itemize, you are throwing money away.

Turbotax is your friend.
Link Posted: 1/1/2007 6:30:24 PM EST
[Last Edit: 1/1/2007 6:33:55 PM EST by CARFan]

Originally Posted By Zhukov:
Hahahahaha. Try it and see, then report back to us.



Hey!


I am asking the questions here!
Link Posted: 1/1/2007 9:03:21 PM EST
Don't forget medical expenses if they're over some certain percentage (don't know what percentage offhand) of your income.

If you moved to take another job you might be able to deduct moving expenses.

Mike
Link Posted: 1/2/2007 6:41:51 AM EST
YOu need to beat the standard deduction first (which is around 5000 or so for singles)

Most people do that with a mortgage interest deduction
If you tithe, you probably beat that too. (remember, charity payments can't be deducted if you don't itemize)

other taxes also, but those are the two big ones that ge tyou over the top
Considering my modest mortgage has usually around 10k in interest each year, yeah it makes a big difference.

medical costs are tough, you can only deduct them to the extent that are over 7% of your AGI
that's a lot of medical costs. A big operation might do it, but usually pretty tough

SEE AN ACCOUNTANT

Link Posted: 1/2/2007 8:14:43 AM EST
Let's clarify:

An exemption is different from a deduction. The exemption is $3,300 per person.

The standard deduction for 2006 is $5,150 (single) and $10,300 for married, widow/er

You can choose to take either the standard deduction, or you can itemize. If your total itemized deductions are greater than the standard amount (5,150), then it makes sense to itemize. The tax prep programs will ask various questions about itemized amounts, and if you cross the threshold of $5,150, the program will automatically use you itemized deductions.

Medical expenses; Let's assume your medical expenses are $5,000. Let's also assume that your adjusted gross income is $30.000. The first 7.5% of AGI does NOT qualify for the deduction. $30,000 X .075 = $2,250. Therefore, the balance (5,000-2,250 = $2,750) is deductible on Schedule A.

Schedule A items include: Medical expense, state and local taxes, real estate taxes, investment interest, mortgage interest, casualty and theft losses, unreimbursed job employee expenses (these have a threshold of 2%--think of medical expense example), donations to charities (must be a charitable organization, not your buddy). The IRS is now requiring that you have documented proof of the donation(s).

For a cheap tax prep software, go to taxact.com. You can prepare your return real cheap there.
In review, take the itemized deduction when it is greater than the standard deduction. Everyone gets one exemption. (Caveat: People that earn big bucks start getting a phase-out of of exemptions and a graduated reduction of allowable itemized deductions.) Tax returns for 50% of the population are real easy to prepare. I can prepare most of these returns in 5-10 minutes. I have prepared returns that took an entire day, but that client had numerous investment accounts. So, if you use the right software, it will be cheap and easy. If you have any investments or complicated transactions involving real estate, etc, you should contact a professional. Using a preparer is only beneficial when you begin to accumulate wealth and you need the tax planning necessary to avoid high taxation.

Ric Honsa
CPA candidate (I get my CPA license this year-I've passed the CPA exam)
Link Posted: 1/2/2007 10:48:23 AM EST
I started using www.taxact.com/]TaxACT last year and love it. It asks you questions and walks you through everything. It can tell you whether to itemize or take the standard deduction.
Link Posted: 1/2/2007 11:02:05 AM EST

Originally Posted By CARFan:

Originally Posted By Zhukov:
...

Typical deductions:
1) Property taxes
2) Mortgage interest
3) Cash contributions to church/charity
4) Charitable donations of items to Goodwill


So just to clarify, this list does not include prostitution?
Is it all inclusive?


Here is the form you fill out for itemized deductions. It's called schedule A.
Link Posted: 1/2/2007 11:12:07 AM EST
I have used TaxSlayer for years. It pretty much confirms what I have already figured out, and it's $9.95 to file both Fed and State. Refunds come back quick...

Now, since the NFA stamp is a tax, can I deduct it under the "Other Taxes" section of my Itemization???


Woody
Link Posted: 1/2/2007 11:16:40 AM EST
Rick_45, or anyone else that may know;; can I deduct my child's medical expenses and her day care expenses, even though the ex-wife will be claiming her as the dependent? When my ex-wife finally went back to work, I lost my daughter as the dependent deduction (it was written into our divorce agreement). But, I still pay her medical expenses/insurance and pay my ex-SIL for after school child care.
Link Posted: 1/2/2007 11:18:13 AM EST
I'd suggest that you skip filing your returns for a few years so you can build up your itemized deductions.
Link Posted: 1/2/2007 11:21:24 AM EST
I can't afford not to itemize. Last year wasn't too bad, this year ought to be a kick in the ass.
Link Posted: 1/2/2007 11:25:02 AM EST

Originally Posted By WWoodworth:
I have used TaxSlayer for years. It pretty much confirms what I have already figured out, and it's $9.95 to file both Fed and State. Refunds come back quick...

Now, since the NFA stamp is a tax, can I deduct it under the "Other Taxes" section of my Itemization???


Woody


If it is an excise tax, no (see Internal Revenue Code 164). I believe it is an excise tax.
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