Taxes

New 2020 Tax Numbers Released By IRS For Filing 2020 Income Taxes in 2021

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mileage rate irs traffic

Now that the April 15th deadline is behind us, the best personal finance advice you can take is to start planning for your 2020 Income Taxes now. That way, you will be ready to take advantage of all the 2020 tax tricks, tips and deductions you can. Sure, last minute tax advice and finding those hidden tax deductions during crunch time is great, but to really save money on taxes, you have to plan all year long. Start watching now for expenses that you can deduct from your taxes and start keeping records and receipts for all of those possible tax deductions that might be usable to lower your taxes if you meet certain requirements or minimum thresholds. Most importantly, start keeping your contemporaneous records of important deductible expenses like business mileage, unreimbursed expenses, training and education expenses, and medical expenses. IRS 2020 Standard Mileage Deduction Rate The standard mileage rate for 2020 is 57.5 cents per mile for business reasons. The 2020 standard mileage rate for miles driven for charitable purposes is 14 cents per mile. You can deduct all unreimbursed mileage driven for business reasons and most charitable reasons as long as you have written documentation of the …

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What Is Still Deductible

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Trump’s new tax law has caused a lot of confusion. One of the big areas of confusion is that many of the so-called “itemized-tax deductions,” won’t really count for most American taxpayers anymore. It’s not that those deductions are gone, it’s just that triggering the threshold where itemizing tax deductions saves you more money than taking the standard tax deduction has moved. New “Smaller” Tax Forms Politicians are always lying and claiming victory when they have achieved no such thing. One thing many politicians tried to take credit for with the new Trump tax law was making taxes simpler. They did… kind of… sort of… My favorite part of the new tax law is that you can “file your taxes on a postcard.” <insert super eyeroll> You know, if you use both sides of the postcard… with no space for any sort of address for mailing it… and if anyone still used postcards, which the IRS does not recommend for filing your taxes. The official IRS 1040 form would indeed fit on an non-mailable postcard. If you printed it front and back. Sound dumb? It is. Still, here we go, the official IRS Form 1040. Wait a minute. That IS …

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IRS Form 1040 – 2018

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postcard sized tax form

The 2018 IRS Form 1040 has been out for a while now. Unfortunately, more than a little bit of the new tax law is on shaky ground while the government is shutdown and the IRS is playing catch up with its remaining staff. That being said, it’s time to take a quick look at the 2018 Form 1040. Check out my look into Credit Karma. IRS Form 1040 Simpler – Sort Of One of the points of the new tax law was to make filing taxes easier. The supposed goal was a tax form so simple it could fit on a postcard. While the main 1040 could indeed fit on a postcard, a lot of taxpayers are going to need to add one or more “schedules” to calculate the values that go on that postcard. But, since when did a bit of reality clog up the pronouncement of politicians The 1040 Schedules The usual schedules from previous years are still here, including Schedule A if you are itemizing your deductions, Schedule C for small business owners and the self-employed, Schedule D for capital gains/losses, and so on. New Schedules making their debut so that the 1040 can be artificially small …

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New Section 199A Business Tax Deduction

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It’s time to dig into how the new Republican tax law is actually going to affect you and yours this coming tax season. While it has been a while since the law was passed, it takes some time for the IRS to iron out the actual rules. Plus, you have to wait for the year to go by before you file your taxes. So, here we are, heading into 2019, and we’ll be doing our 2018 taxes. There are a lot of changes, but one of the biggies is Section 199A. I’m going to take a quick look at the Section 199A Deduction as it applies to a freelancer, or someone who owns their own side business. Section 199A Tax Deduction As noted at the time, the Republican tax bill of 2017 was passed quickly in order to keep any opposition from building up and stopping its passage. As a result, it wasn’t very well thought through, and chances are that there are more than one or two bugs in the system. The IRS itself tried to iron some of those out as it created definitions, and rules and regulations, but there is still a lot of uncertainty about exactly …

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How To Deduct Property Taxes

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Property taxes can be an important tax deduction for many home owners. Real estate taxes, in particular, can be a significant tax deduction.

Home Office Tax Deduction

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home office tax deduction teddy bear

One of the best deductions for self-employed people who work from home is the home office tax deduction. Basically, you take the square footage of your home office and compare it to the total square footage of your home, and then you get to deduct a similar percentage of certain house expenses as a business deduction. It’s one of the ways to take a little bit of the sting out of self-employment taxes. How To Claim Home Office Deduction Like most self-employed small business tax deductions, you take the home office tax deduction on Schedule C. You’ll need Form 8829 Expenses for Business Use of Your Home to calculate and file your deduction. If you use tax prep software like TurboTax, it will do this for you. (You’ll need one of the small business editions to take this deduction, but it’s most likely going to save you a lot more money than you pay for a more expensive version of TurboTax.) To qualify for the home office deduction, you have to use a specific area of your home exclusively, and on a regular basis. In other words, it has to actually be your office where you do your work for …

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IRS Phone Call Lawsuit Scam

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irs phone calls publication 594

I used to be a Certified Financial Planner. My wife is an attorney. I’ve dealt with finance, and business, and courts, and the legal system, as both a professional and as a writer. And still, when I get a call and the voicemail says, “This is the IRS…” I still can’t help but tense up. Phone Calls From the IRS Of course, then I remember that these phone calls from the IRS are a scam. Look, the IRS making phone calls is expensive. You have to put someone in a room with a desk, and a computer and a phone. This is confidential government data we’re talking about, plus there are rules, laws and regulations that govern how the IRS is allowed to interact with taxpayers. In other words, we aren’t talking about room full of $10 an hour temps dialing for dollars. It’s way cheaper and more efficient to have a computer crank out thousands of letters than to have people cold calling taxpayers on their home phone numbers. Besides, by law, the IRS must notify you, BY MAIL, IN WRITING, of just about anything that could vaguely be interpreted as negative happens to you. So, why did I …

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When To Throw Away Taxes

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destroy old tax records

Congratulations on filing your taxes. I hope they were too bad this year. Now, it is time to shred some taxes and their associated documents. Tax Shredding Time How long do you have to keep your taxes? Well, it’s the IRS, so the answer is of course, complicated and convoluted. However, for the most part, the answer is three years. But, before you fire up that shredder, and destroy your tax records, let’s look at the exceptions. I’ll tell you when you can just skip a section so it doesn’t get too tricky. Skip this section if you have never filed or paid late: If you paid the tax late, you may have to keep your tax documents longer. The rule is that you must keep your taxes for two years from the date your paid the tax or filed your return, but no less than three years. In other words, you can shred your 2012 and earlier taxes during 2016 (you just filed and paid your 2015 taxes), but only if you actually filed and paid your 2012 taxes in 2012. If you were late, you have to keep them for two years after you paid them. If you pay …

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Avoid IRS and Tax Scams

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tax scams and crimes

The IRS is used as a way to scam Americans out of money every year. Some the tax scams are very sophisticated. Others, seem like they would defy common sense. This year, the IRS put out a list of the Dirty Dozen tax scams for people to look out for. Here are some of them. Promises of Big Refunds – This is where the complexity of the tax code bites the unwary. Yes, there are a lot of deductions, and tax credits out there, and yes, some of them can be pretty unknown, but don’t believe that you’ve been way overpaying your taxes all these years, if only you’d known about a tax loophole. Research and be sure you understand before you sign your name to any weird forms. IRS Phone Call Scams – Remember, the IRS is legally required to send you notifications of most actions before you get some phone call. Ask them to put it in writing. Also, IRS agents don’t threaten to arrest people out of the blue. Arrest, garnishment, and property forfeiture all require a court proceeding. Real IRS agents won’t tell you that this is your last chance and that you have to send money …

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Standard Deduction 2011 and 2011 Tax Brackets

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Current Standard Deduction and Tax Brackets The IRS has announced new 2011 tax numbers regarding the standard deduction for single filers and for those married filing jointly, as well as the 2011 value of the personal and dependent deduction. By law, these standard tax numbers are adjusted for inflation each year. As a result, these tax deductions can increase or decrease depending upon how prices change. What Is the Standard Deduction for 2011 There was a small adjustment higher in most IRS tax numbers due to inflation. That means that most taxpayers should benefit from higher income limits and wider tax brackets than they had on their 2010 income taxes. Standard Deduction 2011 Taxpayers must choose whether to itemize their deduction or take the standard deduction on their income taxes. For most taxpayers whose income comes primarily from a job as a regular employee, the decision about whether it is better to itemize or claim the standard deduction on income taxes comes down to how much mortgage interest they pay. Basically, if the mortgage interest deduction available is higher than the standard deduction amount, then itemizing makes sense. The new standard deduction amount for 2011 is $11,600 for married couples …

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