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SHOULD I ITEMIZE? A LOOK AT ITEMIZED TAX DEDUCTIONS AND HOW THEY CAN HELP IN 2020 D o I need to itemize? to know your tax situation and weigh both choices
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Knowing when and how to itemize your carefully before completing your federal return. expenses is key to maximizing your tax situation The standard tax deduction and your federal refund. The standard tax deduction is the easier of the two,
Here’s a look at itemized tax deductions and how to as it’s a set amount based on your filing status. know if itemizing is your best option before the filing For the 2019 tax year – for which you file in 2020 – deadline which this year is July 15th. standard deductions amount to:
What are itemized tax deductions? $12,200 if you file as Single or Married filing
An itemized tax deduction is any expense you can separately use to reduce your taxable income and, by extension, $18,350 if you file as Head of Household your federal tax bill. When you choose to itemize, all $24,400 if you file as Married filing jointly or as a deductions you qualify for are reported on Schedule A qualifying widow or widower with a dependent child of Form 1040 and subtracted from your adjusted gross And because the standard deduction is adjusted income (AGI) to lower what you owe. each year for inflation, those numbers will climb to
Ultimately, the amount itemized tax deductions will $12,400 (Single & Married filing separately), $18,650 reduce your 2019 federal income tax depends on your (Head of Household) and $24,800 (Married filing tax bracket and filing status. jointly) for the 2020 tax season.
Do I itemize or claim the standard deduction? Itemized tax deductions
Knowing when to itemize vs. when to claim the When the amount of allowable expenses is more standard deduction means understanding which than the lump sum standard deduction, itemizing option makes the most impact on your federal tax bill. your taxes is likely the best way to go. A seasoned tax Because you can only claim one or the other, it’s crucial preparer can help you sort through your expenses,
Ryan Dodson has a Masters in Accounting from North Carolina State University. He worked in public accounting with Deloitte and Arthur Andersen. He and his wife Tiffany own and operate Liberty Tax Service.
405 East Dixie Drive•Asheboro, NC 27203 (336) 629-4700
determine what is tax deductible and ensure you choose the option that benefits your family the most.
Itemized tax deductions fall into several key categories: • Home mortgage interest • Mortgage insurance payments • Charitable donations • State and local taxes • Medical expenses • Losses resulting from casualty or theft
Note that the IRS updates the list of available itemized deductions each year.
Of course, you’ll want the option that saves the most money. But itemizing your expenses tends to be more work than claiming the standard deduction, something to note as you prepare to file.
What do I need to itemize my taxes?
Reporting expenses as itemized tax deductions means keeping track of all records, receipts and documentation that can validate your claims and prove everything is on the up-and-up.
If you plan to itemize, it’s important to have a number of tax documents at the ready, including: • Check stubs • Bank statements • Medical bills • Insurance bills • Property tax statements • Charitable donation receipts
Collecting and organizing expense receipts and records is paramount to itemizing and can make it much easier to tally up deductions when completing your return.
Common itemized tax deductions
There are many expenses that qualify for itemized tax deductions. Some of the more common include:
Mortgage interest
If you have a mortgage on your home, the interest you’re paying on that loan may be tax deductible. The total mortgage tax deduction is available on the interest paid on the mortgage’s average principal balance during the tax year up to $750,000 ($1,000,000 if the mortgage was secured prior to December 16, 2017) and allowed for two homes per taxpayer.
Private mortgage insurance
Thanks to the Further Consolidated Appropriations Act (2020), private mortgage insurance (PMI) premiums are now deductible up to the end of the year. This allows you to itemize any PMI premiums you paid during the 2019 tax year – as well as any PMI payments you make in 2020.
Additionally, the PMI itemized tax deduction may also be applied to the 2018 tax season, meaning you might be able to claim it by amending your 2018 tax return.
Charitable donations
Any contributions you made to qualifying charities in 2019 may be allowable itemized tax deductions, such as cash or property donations made to your favorite nonprofit.
In many cases, charitable gifts of up to 100% of your AGI can be used to lower your tax burden, though different types of gifts face different AGI limits.
State & local taxes
The state and local tax deduction is one of the major incentives for itemizing, simply because state income taxes are only deductible when you itemize deductions. Those who paid a hefty state and local tax bill in 2019 may find considerable relief from this popular tax advantage.
And if you own your home, you may also deduct any property taxes you paid during the year (prepaid taxes are not tax deductible).
For 2019, the deduction for state and local taxes is limited to $10,000 ($5,000 if married filing separately.
Medical and dental expenses
Medical and dental expenses ate itemizable, though in a pretty limited way. Currently, you may only claim medical expenses exceeding 7.5% of your adjusted gross income, a relatively high threshold making it difficult for many to qualify.
Tax deductible medical expenses may include anything from necessary surgery and medical insurance premiums to prescription costs, physical handicap costs, doctor’s fees and medical-related transportation and more.
Casualty losses
Passage of the Tax Cuts and Jobs Act (TCJA) limited the casualty and theft loss deduction to losses incurred due to natural disasters happening in federally declared disaster areas (as declared by the U.S. President).
What’s next?
Sorting through expenses and itemized tax deductions can get frustrating in a hurry, particularly with so many different rules and limitations on what you can deduct and what is out of bounds.
That’s where we come in. At Liberty Tax®, our seasoned tax pros are committed to helping you navigate the tax code and claim the deductions you need to maximize your tax 2019 refund. We help identify which tax deductions work best for your situation and ensure your return is in the best shape before the filing deadline.
Give us a call at 336-629-4700 or come by and visit us at 405 E. Dixie Drive, Suite J in Asheboro two doors down from Jimmy Johns. asheboromagazine.com | 13
ASK THE EXPERT YOUR FEET
THE DOS AND DON’TS FOR CHOOSING THE RIGHT FLIP-FLOPS
The temperature is rising, which means you’re ready to start wearing your favorite spring and summer footwear: Flip flops!
Whether you are digging them out of the back of your closet or hitting the mall in search for a new pair, keep in mind the following tips when it comes to making sure your flip-flops aren’t a huge flop: • Do shop for a flip-flop made of high-quality, soft leather. Leather minimizes the potential for blisters and other types of irritation. • Do gently bend the flip-flop from end to end, ensuring it bends at the ball of the foot. Shoes of any kind should never fold in half. • Do ensure that your foot doesn’t hang off of the edge of the flip-flop. • Do wear a sturdy pair of flip-flops when walking around a public pool, at the beach, in hotel rooms and in locker room areas. Walking barefoot can expose foot soles to plantar warts and athlete’s foot. • Don’t re-wear flip-flops year after year. Inspect older pairs for wear. If they show signs of severe wear, discard them. • Don’t ignore irritation between toes, where the toe thong fits. This can lead to blisters and possible infections. • Don’t wear flip-flops while walking long distances. Even the sturdiest flip-flops offer little in terms of shock absorption and arch support. • Don’t do yard work while wearing flip-flops. Always wear a shoe that fully protects feet when doing outside activities such as mowing the lawn or using a weed-eater. • Don’t play sports in flip-flops. This practice can lead to twisting of the foot or ankle, as well as sprains and breaks.
For more information about keeping your feet healthy or to make an appointment with one of the podiatrists at the Triad Foot & Ankle Center, visit www.triadfoot.com or call 336-375-6990.
Dr. Titorya Stover graduated from Clemson University with a Bachelor of Health Science degree before attending Barry University in Miami Shores, Florida, earning her Doctor of Podiatric medicine with a dual master’s degree in Public Health and Biomedical Science. Dr. Stover is Board Certified in foot surgery by the American Board of Foot and Ankle Surgery.
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Please make a note of our new location: 600 W. Salisbury St., Suite D Asheboro, NC 27203
To make an appointment call (336) 375-6990
Visit triadfoot.com for more information and to request an appointment online
ASK THE EXPERT DENTAL
KEEPING YOUR SMILE, AND YOU, HEALTHY
These are definitely strange and sometimes scary times we are facing. I know a lot of people have a lot of questions about this Pandemic and are concerned and wanting to keep themselves and their families safe and healthy.
One area where individuals may have the most concern is when receiving health care, including dental services. I want to assure you that we feel it is safe to receive dental care given the infection control measures we have practiced for decades, in addition to the new measures we have put in place due to the Covid 19 Pandemic.
Since the early 1980’s, dentistry has led the way in infection control among private practice health care providers due to the close contact we have with our patients. For decades, the standard of care to prevent infection for patients and staff has been the use of autoclave sterilization of instruments, barrier protection and sterilization of chairs and equipment used in the treatment rooms as well as the use of masks, gloves, and barrier gowns for Dr. and staff.
With the onset of Covid 19, these measures have been augmented and strengthened. In our office, we have implemented the use of N95 masks covered with a surgical mask, disposable gowns and face shields for Dr. and staff. Additionally, at the beginning of each workday, the staffs’ temperature and blood oxygen levels are screened.
Moreover, contact between patients has been greatly reduced and patients are screened for symptoms of Covid 19 before entering the practice. In addition to screening questions, patients’ temperatures and blood oxygen levels are taken before the patient leaves their car. Anyone with a temperature of 99 F or a blood oxygen level below 90 is not allowed in the practice. Only scheduled patients are allowed in the practice and patients use hand sanitizer immediately upon entering. Rarely are patients in the waiting room, but rather are taken directly to their treatment room, and patients enter through the front door and exit through the back door of the practice. We have also implemented the use of medical grade HEPA air filtration units.
These precautions have been implemented for patient and staff safety and have been used in our practice since the onset of the Covid 19 spread in the USA. We did not at any time shut our practice down but rather saw emergencies only for the month of April and are now beginning to bring dental hygiene patients back into the practice in phases on a most needed basis. Having not shut down, I am proud to say we have not had a single case associated with our office for staff or patients.
We want to address any additional questions or concerns you may have, so please feel free to contact our office or your current dental office, if any arise. We look forward to seeing you soon and keeping your smile, and you, healthy.
Dr. Edward Wenda attended UNC Chapel Hill for his undergraduate studies, graduating in 1996. He then studied dentistry at UNC School of Dentistry at Chapel Hill, earning his DDS degree in 2000. He purchased Dr. Henry Vruwink’s dental practice in 2018. He is a member of the ADA, North Carolina Dental Society and Randolph County Dental Society
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