Tax Breaks for Taxpayers Who Itemize

Tax Breaks for Taxpayers Who Itemize

Many taxpayers opt for the standard deduction, but sometimes itemizing your deductions is the better choice - often resulting in a lower tax bill. Whether you bought a house, refinanced your current home, or had extensive gambling losses, you may be able to take advantage of tax breaks for taxpayers who itemize. Here's what to keep in mind: Deducting State and Local Income, Sales, and Property Taxes The deduction that taxpayers can claim for state and local income, sales, and property taxes is limited to a combined, total deduction of $10,000 - $5,000 if married filing separately. State and local taxes paid above this amount can't be deducted. Refinancing a Home The deduction for mortgage interest is limited to interest paid on a loan secured by the taxpayer's main home or second home....

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Filing a Tax Return: Avoid These Common Errors

Filing a Tax Return: Avoid These Common Errors

While not all mistakes on tax returns cause delays in refunds, as the April 18 deadline approaches, taxpayers are advised to steer clear of the common tax return errors listed below to ensure a timely refund. Not Using Electronic Filing While this isn't necessarily a mistake per se, electronic filing is the best way to cut the chances for many tax return mistakes while maximizing deductions to reduce the amount of tax owed. The reason for this is that the tax software your tax professional uses automatically applies the latest tax laws, checks for available credits or deductions, does the calculations, and asks taxpayers for all required information. Due to the backlog of returns related to COVID-19, processing paper tax returns could take much longer than usual, and electronic filing is...

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Working Remotely Could Affect Your Taxes

Working Remotely Could Affect Your Taxes

When COVID-19 struck, many employers quickly switched to a work-from-home model for their employees. Many of them began working in a state other than where their office was located. While some workers have returned to their offices, as the pandemic drags on, more offices continue to work remotely with no back-to-office dates insight. If you're working remotely from a location in a different state (or country) from that of your office, then you may be wondering if you will have to pay income tax in multiple jurisdictions or whether you will need to file income tax returns in both states. Here's what you should know: Generally, states can tax income whether you live there or work there. Whether a taxpayer must include taxable income while living or working in a particular jurisdiction...

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What’s New for IRS Form 1040 This Year

What’s New for IRS Form 1040 This Year

If you’ve gathered your tax documents and are ready to tackle your tax return, there’s one more step you should take: becoming familiar with what’s new on the 2021 Form 1040. While the format of Form 1040 and its schedules remain similar to 2020, there are several changes. Many of these changes can be attributed to the American Rescue Plan Act of 2021 (ARP).

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Tax Tips for January 2022

Tax Tips for January 2022

Click on the links below to jump to each section in this article: Standard Mileage Rates for 2022 Why Using the Correct Filing Status Matters Tax Credits for Accommodating Disabled Workers Watch Out for Holiday Gift Card Scams What To Know About Keeping Good Tax Records Standard Mileage Rates for 2022 Starting January 1, 2022, the standard mileage rates for the use of a car, van, pickup, or panel truck are as follows: 58.5 cents per mile driven for business use, up 2.5 cents from the rate for 2021 18 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces, up 2 cents from the rate for 2021, and 14 cents per mile driven in service of charitable organizations. The charitable rate is set by statute and remains unchanged. The standard...

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