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Nov 20, 2020Qualified Plug-in Electric Drive Motor Vehicle Credit
You can report your plug-in electric motor vehicle to receive a credit by the IRS. Previously, this credit was only applied to passenger vehicles and light trucks and vehicles purchased after December 31, 2009. The good news is that this credit for qualified two-wheeled plug-in electric vehicles is now able to cover vehicles acquired in […]
adminNov 19, 2020Education Credit
You can qualify for an education credit if you paid the cost of higher education. It reduces the amount of taxes you owe on your return and could lead to a refund. There’s two education credits; the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC). You can claim an education credit if […]
adminNov 19, 2020Earned Income Credit (EIC)
The Earned Income Tax Credit (EITC or EIC) is a tax benefit for taxpayers with low to moderate income. It can either give you a tax refund or reduce the tax you owe. In order to qualify for this credit, you must have earned income. This can be from working, owning a business and meeting […]
adminNov 18, 2020State & Local Taxes
You can deduct up to $10,000 ($5,000 if married filing separately) in state and local taxes when you itemize your deductions. You can report taxes for general sales, real estate, personal property and foreign taxes. However, you can’t deduct both general sales tax and income taxes. When deducting general sales tax, you can use your […]
adminNov 16, 2020Qualified Business Income Deduction (QBI)
The qualified business income deduction (QBI) is a tax deduction that allows small businesses to deduct up to 20% of their business income on their tax return. Taxpayers can begin to claim this deduction on their 2018 taxes onward. However, the income must be qualified business income. Eligibility A business operated as a sole proprietorship, […]
adminNov 16, 2020Net Operating Loss (NOL)
A net operating loss (NOL) is when your deductions exceed your taxable income. It can reduce your taxable income in future years as well as your income tax. Due to the Tax Cuts and Jobs Act (TCJA), the NOL has undergone some changes. In order to have an NOL, your loss must be caused by […]
adminNov 16, 2020Home Mortgage Interest & Points
You can deduct your home mortgage interest on the first $750,000 of indebtedness. If you’re married filing separately it’s the first $375,000. However, if you are deducting mortgage interest from indebtedness before December 16, 2017, there are higher limitations. It stands at $1 million and $500,000 if married filing separately. For the tax years prior […]
adminNov 16, 2020Medical & Dental Expenses
If you are itemizing your deductions (using Schedule A), you can report your medical and dental expenses. The amount of your total medical expenses must exceed 7.5% of your adjusted gross income. The IRS states that all medical care expenses include payments for the diagnosis, cure, mitigation, treatment, or prevention of disease, or payments for […]
adminNov 16, 2020Charitable Donations
You can only claim your charitable donations if you are itemizing your deductions. However, your organization must qualify for a tax deduction. To find out if it qualifies, use the IRS tool by clicking here. That being said, you must keep a record of cash, check or other monetary gift contributions. For example, you will […]
adminNov 16, 2020Standard & Itemized Deductions
There are two deductions that you can take when filing your tax return. You can either take the standard deduction which is based on your filing status and set annually due to inflation, or itemize your deductions by reporting your expenses (located on Schedule A). The standard option reduces your income before income tax. The […]
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