Can I deduct union dues? Can I deduct my gifts to charity, or mileage to work, or my dog? These are questions that are asked frequently during the tax return preparation process. Our goal with this page is to answer some basic questions about itemizing deductions on your annual Form 1040.
Start with the video below. It covers all of the information written on this page. Right below the video is a a downloadable PDF worksheet that will help you compile necessary information for your annual income tax return.
On your tax return, you are allowed a ‘Standard Deduction,’ but you can also ‘Itemize’ your deductions. If the total of your Itemized Deductions is more than the Standard Deduction, then you can take that deduction instead. The main itemized deductions are home mortgage interest, state/local taxes (including property taxes), charitable donations, and medical expenses.
It does not make sense for everyone to Itemize their deductions. People who do not own a home and didn’t make large charitable contributions or incur large medical expenses usually do not benefit from Itemizing their deductions. However, if you paid on a home mortgage, made large charitable contributions, and/or had major medical expenses, then Itemizing deductions might benefit you.
For Itemized Deductions to provide a tax benefit, they must be more than the Standard Deduction:
Medical expenses are deductible only if they are more than 7.5% of your income. For example, if you have an income of $100k, the first $7,500 (7.5% of $100k) of medical expenses are not deductible, but any medical expenses that you incur in excess of that threshold can be deducted as an itemized deduction.
The following miscellaneous itemized deductions have a couple limitations:
If you paid child care expenses so that you could work, then you might qualify for this credit. To claim the credit, we will need the provider’s name, address, phone number, EIN/SSN, and the amount you paid them.
If you or one of your dependents had post-secondary (college) education expenses, you might qualify for an education credit. Tuition expenses are typically reported on Form 1098-T.
Making retirement contributions can be a great way to get a tax deduction while paying your future self!
If your employer offers a retirement plan (for example, a 401(k)), any applicable tax deduction will be subtracted from the taxable income on your W-2, so there is nothing you need to do to get this deduction.
You can also contribute $6,000 to an IRA for 2022 and $6,500 for 2023 (plus an additional $1,000 if you are 50 years old or older at the end of the year). These contributions are reported on Form 5498. There are two general types of retirement contributions that you can make:
If you paid on student loans, you might be able to deduct the interest portion of the payments on your tax return. This is reported by your student loan provider on Form 1098-E.
If you were a teacher, you can deduct up to $250 of unreimbursed classroom expenses on your tax return.
There are various tax credits for energy efficient improvements to your home and for purchasing electric vehicles. If you are interested in one of these credits, talk to your tax professional.
We have created the following resources to help you understand what we will need to complete your tax return:
Our primary appointment method is going to be virtual due to continued COVID-19 restrictions. However, each tax professional (Joel, John, and Matt) have opted to individually chart their own course in regards to in-office appointments. John’s circumstances allow for no in-office appointments. Matt and Joel will make themselves available for in-office appointments on a limited basis to clients with special circumstances and needs. We ask our clients to work with us again this year and use the resources we have provided. If you desire an in-office appointment, please contact our office. We can be reached by phone at 909-797-3140 or by email at firstname.lastname@example.org.
No appointment is necessary. You can drop off documents any time during normal business hours. Or you can upload documents to your online Client Center account any time. If you need to explain your situation or tax documents before we get started, just let the Prospect team know and we will arrange for a phone call before your project gets started.
The Client Center is our online client portal. You can use the Client Center to:
Part of our new process includes a Virtual Appointment (phone or web meeting) with you after the initial preparation of your tax return. Since most of the busy work will be done, we will use all of our time to review your taxes together, ensure nothing has been missed, answer your questions, explain the next steps, and do some planning for the coming year. The goal is for you to leave this meeting feeling great about your tax return and completely in control of the process! Of course, if questions come up before you sign, just let our team know so they can connect you with your Tax Pro.
Yes! If you would like to schedule your Virtual Appointment (phone call or web meeting) in advance, please call our office at 909-797-3140 or use the following links: john – www.caIendIy.com/johnhopkins JoeI – www.caIendIy.com/joelhendriks Matt – www.caIendIy.com/mattkaiser
If you haven‘t scheduled an appointment in advance, we will contact you as soon as your documents are received by our office.
All Individual income tax returns can be signed electronically. The IRS doesn‘t allow electronic signature for Corps, Partnerships, Trusts, or Estates. When your tax return is complete, you will receive an email that walks you through the process. We use a service called SafeSend Returns to assist with these final steps of the tax return process.
Once your tax return is signed and we’ve received your signed documents, we will electronically file your income tax return. There is nothing left for you to do except pay your invoice to us and track your refund (www.irs.gov/refunds) or pay your balance due (www.irs.gov/payments).