IRS tax deductions reduce a taxpayer’s taxable income, which lowers their tax liability. A deduction subtracts from your gross income to reach your Adjusted Gross Income (AGI) or taxable income. This effectively reduces the amount of income the government can tax.
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Nov 16, 2020If you have out-of-pocket job expenses, you can do so on your tax return. This will be located on Form 2106. However, prior to tax year 2018, taxpayers can deduct unreimbursed expenses that exceed 2% of their adjusted gross income. This is located on Schedule A for your itemized deductions. Due to the Tax Cuts […]
adminNov 16, 2020Spousal support (alimony) is fully taxable in the hands of the former spouse or common-law partner. Beginning in 2019, if a divorce or separation agreement was executed after Dec. 31, 2018, the alimony is no longer included in a spouse’s income or deductible. It also applies to separation agreements that were modified after Dec. 31, […]
adminJul 2, 2018You can deduct casualty and theft losses for both personal use property and income-producing business property. Prior to tax year 2018, you did not have special limitations. However, you can only report a loss caused by a federally declared disaster. Destruction of property by fire, storm, shipwreck, or other casualty and theft by larceny, embezzlement, […]
adminJun 28, 2018The tuition and fees deduction, which allow a maximum deduction of $4,000, expired after the 2020 tax year. This means you cannot claim this specific deduction for tax years 2021 and later unless Congress extends it again. For Tax Years 2020 and Prior The tuition and fees deduction is still applicable for the tax years 2020 and […]
adminJun 28, 2018Form 2106 is currently used for employees to deduct employee business expenses as an Armed Forces reservist, a qualified performing artist, a fee-basis state or local government official, or an employee with impairment-related work expenses. Employees who do not fit into one of these categories may not use Form 2106 due to the suspension of this […]
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