Deduct Everything!. Eva Rosenberg. Читать онлайн. Newlib. NEWLIB.NET

Автор: Eva Rosenberg
Издательство: Ingram
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isbn: 9781630060480
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      Tip #41:

      Personal property taxes. Typically, these are the annual fees you pay to your state’s department of motor vehicles based on the value of your auto, boat, ATV, Jet Ski–type things, motorcycles, snowmobiles, and other such toys and vehicles. If the fee is not based on value but is simply a processing-type fee—the cost is not deductible. Often your license fee includes such base fees or special fees for vanity plates. Those costs are not deductible either. Incidentally, in the many decades that I have been preparing tax returns, this is one of the most often overlooked deductions. For some folks, it may not be much. But for others, when you look at all the vehicles . . . it adds up. Especially since motor home and RV licenses can be deducted on this line (line 7 Schedule A). Note: If you use the car for business, only report the personal use percentage of these taxes. For instance, if you use the car 80 percent for business, and the tax is $75, only report $15 on Schedule A.

      Tip #42:

      Sales taxes. Although these aren’t around-the-house-type taxes, let’s talk about them anyway—especially since we buy things for the home and pay sales taxes. There’s a strategy to use with these deductions. If at all possible, deduct your sales taxes instead of your state income taxes. Why? There are several reasons:

       • When you deduct your sales taxes, you don’t have to report your state income tax refund as income on the following year’s tax return.

       • You don’t have to track all the sales taxes you paid. Just use the IRS’s Sales Tax Calculator: https://www.irs.gov/Individuals/Sales-Tax-Deduction-Calculator.

       • Your tax software might even have the information for your state—just add in the extra sales tax percentage your county or parish charges.

       • In addition to the sales tax tables, where the tax is based on your AGI, you can add the sales taxes paid on big-ticket items like cars, boats, RV, expensive electronics, Rolex watches, and so on.

       • Some states don’t even have income taxes, so sales taxes are your only option.

      Note: The sales tax deduction is one of those tax provisions that have been expiring every year. This is now a permanent part of the Internal Revenue Code as Section 106 of the PATH Act of 2015. Please see Bonus Tip #270 for more details.

      Tip #43:

      State income taxes. Naturally, if your state income taxes are much higher than the sales taxes you paid, use this deduction. When you end up getting a refund on your state tax return, after itemizing the taxes on Schedule A, you will need to report all or part of your state refund as income. Why only part of it? Well, if you didn’t get any benefit from the state income tax deduction, you don’t need to pay taxes on refund, either. There are detailed instructions for line 10 of Form 1040 (https://www.irs.gov/instructions/i1040gi/ar01.html#d0e3584). Generally your software will do this computation for you if you give it enough information about last year’s tax return.

      Tip #44:

      Good news: if you did not itemize in the year for which you received your refund, the state refund is not taxable. For instance, let’s say you filed several years’ tax returns in 2015—you filed 2012, 2013, and 2014. Suppose you didn’t itemize in 2012 and 2013, but your state refund is $10,000. None of that refund is taxable. But let’s pretend that you itemized in 2014 and got the full benefit of your state income tax deduction. In that case, the $5,000 refund you received for 2014 is income to you in 2015 even though you may have a received a total of $15,000 in state refunds during 2015.

      Tip #45:

      Here are three commonly overlooked state tax deduction opportunities:

       • If you were making state-estimated tax payments, remember the January payment for the fourth quarter. Even though the payment you made in the tax year you are filing was for last year, you get to deduct it. Why? You paid it in the current tax year.

       • Did you have a state overpayment on your tax return that you applied toward the following year’s taxes? That’s considered a payment you made in the current year. For instance, you applied your 2014 state tax refund to your 2015 state taxes. That payment is considered made in 2015.

       • Did you pay a balance due to the state when you filed your tax return? Remember to add that to your total state taxes paid. For instance, you paid your state $532 when you filed your 2014 income tax return in April of 2015. That payment is made in 2015. Oh, and do remember to add it to your total estimated payments for 2015. A lot of people forget to include that.

      Tip #46:

      Here are two more “state” tax deductions that most people don’t know about at all:

       • Taxes imposed by Indian tribal governments are deductible. Though I would bet that people living on reservations know this one applies to them, an excerpt from IRS Publication 17 reads:“Indian tribal government. An Indian tribal government recognized by the Secretary of the Treasury as performing substantial government functions will be treated as a state for purposes of claiming a deduction for taxes. Income taxes, real estate taxes, and personal property taxes imposed by that Indian tribal government (or by any of its subdivisions that are treated as political subdivisions of a state) are deductible” (https://www.irs.gov/publications/p17/ch22.html#en_US_2014_publink1000173139).

       • Foreign income taxes paid are deductible. You may have paid them as deductions from dividends, from your pension, or from the foreign equivalent of Social Security income. Be sure to convert the foreign currency to US dollars. You can look up the IRS’s approved currency conversion rates on their website here: https://www.irs.gov/Individuals/International-Taxpayers/Yearly-Average-Currency-Exchange-Rates. Or you can use the Oanda site to get values on specific days or averages for a year or so: http://www.oanda.com/currency/.◦ Incidentally, you have a choice about those foreign taxes. You may take them as a deduction here on Schedule A or you may choose to take them as a tax credit using Form 1116, Foreign Tax Credit.◦ What if you are not reporting your foreign income at all because you are working overseas? If you have the privilege of using Form 2555, the Foreign Earned Income Exclusion, then you may not use any foreign taxes you pay as either a deduction or a credit. After all, if you don’t pay taxes in the United States, you don’t get any US tax benefits.

      Enough about taxes! Let’s move on to more interesting things. Like . . . interest!

      Tip #47:

      Mortgage interest paid. This looks pretty simple, doesn’t it? Yet I managed to teach an entire two-hour course on the subject (http://www.cpelink.com/self-study/home-mortgage-interest-deductions/6097). The IRS publishes a 17-page booklet on the subject—IRS Publication 936 (https://www.irs.gov/pub/irs-pdf/p936.pdf). Let me just give you the high points here. First, the good news: the bad news I am about to give you probably won’t impact you. OK, here’s the bad news: your mortgage interest deduction is limited in several ways.

       • You may only deduct the interest on acquisition debt—the amount of the mortgage you took out when you bought the house. Plus any mortgage you took out to pay for repairs or remodeling.

       • In addition, you may deduct the mortgage up to another $100,000 of