itemized vs. standard deductions

Even with the $10k limit, it still was worth my money to itemize. But I really did get slammed by that limit, losing another $11k of deductions that I would otherwise have been able to take.

There’s no $10K limit when itemizing.

There’s a $10K limit for property taxes

This is the first year since 1982 that I won't be itemizing. Even though my property taxes and state income tax are both high, I don't have a mortgage anymore, and my other deductions (medical, contributions) are negligible. (Plus I'm over 65, so my standard deduction is even higher: $13,600.)

I've been doing volunteer tax preparation for the past five weeks through the AARP Foundation's Tax-Aide program. Many people have been surprised to discover that they aren't going to be itemizing. However, quite a few can still itemize for California state income tax purposes. .

[quote]There’s a $10K limit for property taxes

No. The $10K limit applies to ALL state and local taxes: property, income, etc.

I am meeting with my accountant on 3/25 so I don't know yet. My taxes are complicated.

I used the standard this year. I rent and have phased out of the student loan interest deduction (which is a really unhelpful deduction anyway).

The standard deduction is higher so many people will choose to take that instead of itemizing, which is the point.

Not sure if the $10,000 limit to deduct for property taxes only matters if you itemize or if it’s a separate allowable deduction

R7, I am not clear on your question, but the $10,000 limit to deduct for property taxes only matters if you itemize. I don’t see it mattering otherwise.

r7 and r8 Again, the limit is not on PROPERTY TAXES. It's on ALL state and local taxes.

OP, I am itemizing again this year. I have a mortgage with interest, and high medical expenses.

Here’s a tax tip for folks: if you are in recovery for alcoholism, and go to what are called “Roundups”, which are essentially conventions for such people, usually in nice locations, be mindful that the tax code treats it as a medical expense. You can deduct the costs for the taxi to and from the airport, both at home and at the destination. The airfare cost is also deductible. Deduct the Roundup registration fee. The hotel costs are limited to a deduction of $50 per night. I forget if meals are deductible, read the tax code.

I think the only requirement is to get your doc to write a Rx for the event. I didn’t know a doc could write an Rx for something that was not a pill, but he can.

It is no different from going to a medical convention on Hoskins Disease, or whatever.

It is only of value if all your med costs, added together, are more than 10% of your income, and you itemize your deductions .

Med deductions include what you pay aftertax for medical insurance premiums (usually not if through your employer), and aftertax payments for long term care insurance.

Massages are also covered if for a legit medical condition. Ask your doctor for an Rx for it, to be safe.

Of course, prescription medication is covered, too.

I went to a medical “symposium” once, for a medical condition I have. I deducted the mileage for my car, as I drove. I deducted the registration fee. I bought the speaker’s book and may have deducted the cost for it. All as medical expenses.

I got my doctor to write an Rx for it. (It was his symposium.) Just make sure you save your receipts in case you are audited.

Yeah, good luck with that one.

Which “one”, R12? I’ve read the IRS Publication 502 on tax deductions and it’s pretty clear.

Incidentally, if you have a Flexible Spending Account at work, the deductions in R10 can be used for the FSA. If you submit an unusual claim, it helps if you include the page (or reference it) from IRS Publication 502 with your receipts.

I’ll add that I never had an FSA claim denied.

Who pays taxes?

Always itemized - couldn’t this year. I lost $20,000 of deductions this year - primarily real estate taxes. Fuck Republicans. They literally lifted over $6,000 from my pocket this year. As if I didn’t hate them enough already.

We got fucked over. One of the reasons we finally bought a house was for "all the tax benefits." Well, those went out the fucking window because of the Rethugs.

Last year we got a $3,000 refund. Absolutely nothing changed and this year we OWE $8,000

FUCK FUCK FUCK

r13 I guess you didn't read this part.

[quote]Medical ConferencesYou can include in medical expenses amounts paid for admission and transportation to a medical conference if the medical conference concerns the chronic illness of yourself, your spouse, or your dependent. The costs of the medical conference must be primarily for and necessary to the medical care of you, your spouse, or your de-pendent. The majority of the time spent at the conference must be spent attending sessions on medical information.The cost of meals and lodging while attending the conference isn't deductible as a medical expense.

Thank you, R18. I appreciate your effort to find the reference.

I find nothing incorrect in R10 except that that lodging at $50 per night or any amount is not allowed. I think that was a change or clarification to the tax code and it was allowed, say, in 2005-2009 somewhere, when I looked at it last. Meals are also not allowed, I see. But the rest is correct, to my reading.

There is such a roundup-convention in the Miami area in March, soon, so it’s relevant.

R18, is that agreeable now? I am curious because, of course, words are subject to interpretation and I don’t know what you might think. It seems clear enough to me, as the medical community considers alcoholism a disease.

Under “Trips”, IRS Pub 502 also says this:

[quote] You can include in medical expenses amounts you pay for transportation to another city if the trip is primarily for, and essential to, receiving medical services. [bold] You may be able to include up to $50 for each night for each person. [/bold] You can include lodging for a person traveling with the person receiving the medical care. For example, if a parent is traveling with a sick child, up to $100 per night can be included as a medical expense for lodging. Meals aren't included.

This is what I was thinking of. So, the IRS publication is not clear about lodging. My interpretation is that $50 per night of lodging is deductible. If you’re audited, I suppose it depends on the auditor.

Lodging Ricky.

Ignore Lodging Ricky. Thank you.

I heard that Biden may suggest eliminating investment income tax rates and taxing investment gains at regular tax rates instead. Then I heard that this would pay for free tuition for everybody.

Investment tax rates today are 0% on the first $9000 or so, then 15% on the rest. I think there is another one or two brackets, but I never make enough to trigger those higher rates.

Personally, I’d first like to see Trump’s tax breaks reversed. And raise the dynasty tax (aka inheritance tax). Then dedicate half (or some portion) of other tax increases towards paying-down the debt, before funding new programs.

Besides, I think college should cost the student some money. It can’t be free, or it will be abused. Subsidized education, I can agree with, but not free.

Did not itemize. I'm 66, so, like R3, got the $13,600 standard deduction. I made charitable contributions both to give charity and to decrease my potential tax burden. I'm clueless about how to handle future charitable contributions.

Itemized on federal, didn’t net me too much ($100 refund). But itemizing my federal helped with my state and gave me an extra $1000. Otherwise I would be paying $200 in federal and $2000 in state if I took the standard.

R23, they recommend bunching deductions. You delay making deductions like charitable donations one year (and property tax payments, mortgage payments, etc.). Then you go all-in the next year. Then you delay again the next year. It’s a f’d-up process, but in theory, you make the same donations and payments, just at different times.

(For the property, you may want to accelerate the payments the initial year, so you don’t get dinged for a late payment. Also, you can only pre-pay January property bills in December. You probably can’t pay February bills. My city irritatingly sends property bills so they are received Jan 2. I sometimes pay in December anyway.)

I see my tax guy next week. I’ll be glad to get them completed.

[quote] And raise the dynasty tax (aka inheritance tax).

States have inheritance taxes. The Federal government has an ESTATE tax.