Category Archives: Personal Tax Deductions

Articles and tips related to personal tax deductions by James E. George, CPA

Don’t overlook these end of year tax saving moves!

Don’t overlook these end of year tax saving moves!

The end of the year is drawing close and we are getting many calls for ideas on how to save on 2019 income taxes. Not every idea below may apply to your situation, but the following moves collectively could save you significant tax dollars!

Parents may qualify for more childcare credit if they prepay January’s childcare costs in December. Any parent who has not reached the limit of $3,000 per child in 2019 should consider this move.

If you are considering redeeming savings bonds, you may want to split the redemption and cash half of them in December and half in January 2020. This will split the income over two years and may prevent you from moving into a higher income tax bracket.

You can gift up to $15,000 to any one person without reporting it and the recipient will not have to pay any income tax on the money. After January 1, 2020 you may gift them another $15,000. This is a per person, per year limitation. A married couple can each donate $15,000 to their child for a total of $30,000 in 2019.

In 2019 you may deduct charitable donations up to 50 percent of your adjusted gross income. We emphasize this is a deduction and not a dollar for dollar credit. Your tax savings will only be a percentage of the value of the money or goods donated.

Parents of college students may want to prepay the January semester tuition in December. If you have not already paid in excess of $4,000 per student dependent, you could recognize a higher tax credit on your personal income tax returns.

If you have not already funded your HSA to the 2019 limit for your filing status, $3500 for singles and $7,000 for a family, you may want to before January 1. Any unspent money may be rolled over to future years. This money goes in pre-tax and can accumulate earnings tax deferred while in the plan. Over time, this can function as an additional pension.

The majority of taxpayers will find these year-end moves applicable to their circumstances. We appreciate the opportunity to share these ideas with you, and wish you all a happy and healthy New Year’s.

The IRS does not care what your Divorce Decree says!

The IRS does not care what your Divorce Decree says!

Every year at tax time, we encounter a variety of situations relating to divorced spouses claiming their children. In prior years, there were various ways used to justify who claimed which child. Sometimes the spouses agreed who claimed who and sometimes they didn’t. For years, the state court systems would approve divorce agreements that specified… Continue Reading

Casual gamblers may lose big under new tax code

Casual gamblers may lose big under new tax code

The new tax law will cause many casual gamblers to incur bigger losses than before! Prior to 2018 you could deduct your losses up to the amount of your winnings. You did this by claiming your losses as itemized deductions. The new tax law for 2018 doubles the standard deduction. This will cause many taxpayers… Continue Reading

New Tax Laws and your Home Equity Loan or Credit Line

New Tax Laws and your Home Equity Loan or Credit Line

The 2018 Tax Cuts and Jobs Act limits the deduction for home equity loans and home equity credit lines. The media has done a poor job of informing the public about this issue. Many of the newspaper and radio accounts have indicated there is no provision for deducting interest paid on equity loans and credit… Continue Reading

Employees’ Business Expenses Must be Documented

Employees’ Business Expenses Must be Documented

A deduction is available for money an employee spends to perform their duties in the course of their employment if they are unreimbursed by their employer. This includes mileage, licenses, union dues, education and out of pocket expenses. The expenses must be incurred as a condition of employment or utilized in the performance of the… Continue Reading

Claiming Dependents

QUESTION: Dear Taxman – My Daughter graduated from college in May of this year. She started working in September and expects to make about eleven thousand dollars this year. Can we still claim her as a dependent for this year? ANSWER: Dear Reader: To claim her as a dependent in any year, she must have been a… Continue Reading

Donations to Non-Profits

QUESTION: Dear Taxman – I donate money to different non-profit organizations. Every year my Tax Preparer deducts some but not all of them. I thought donations to all non-profit groups were tax deducible. ANSWER: Dear Reader – Non-profit groups don’t pay income taxes on money you give them. That does not mean you get a… Continue Reading

Charitable Deductions

QUESTION: Dear Taxman – Every week I place cash in the collection plate at church. I recently heard I cannot deduct it since I have no banking record. Is that true? ANSWER: Dear Reader – As of August 16, 2006 a receipt from the donee organization or a bank record such as a cancelled check… Continue Reading