I promised my wife we could buy a new house if it passed. I never thought it would actually make it into the bill even. We bought our current house in December of 2007 and had to do major renovations to it just to make it livable. We moved in March 2008 and didn't finish the remodel until June. I've been so pissed over not being eligible for any credit.
If you went to college last year make sure you apply for the Hope Credit or Lifelong Learning Credit. Hope is max $1,800 this year.
"Would you look at those morons... I paid my taxes over a year ago!" <object width="512" height="296"><param name="movie" value="http://www.hulu.com/embed/hUZ8eH3SXzaiPdqn4HA0Gw"></param><param name="allowFullScreen" value="true"></param><embed src="http://www.hulu.com/embed/hUZ8eH3SXzaiPdqn4HA0Gw" type="application/x-shockwave-flash" allowFullScreen="true" width="512" height="296"></embed></object>
How much would your medical expense be before you can get a tax break? Is it 7% or 10% of your taxable income?
That would be your AGI, not taxable income. Taxable income is after personal exemptions and standard/itemized deductions. We just missed qualifying for a medical deduction. Most people only get a deduction if they have to pay for their own private insurance out side of an employer's cafeteria plan.
So if you spent 7.5% of your AGI on medical expenses, that can be deducted? Just wondering about next year because me and my girlfriend are spending quite a bit on her pregnancy so she might be able to deduct it next year.
You can deduct the amount if you itemize, and you can only deduct the medical expenses that exceed the 7.5% of your AGI. Very unlikely that you will be able to. Chances are you won't itemize even(I recall you saying you did not own a house, so no mortgage interest, or property taxes currently).
CPA explained it as an electronic filing is easier for the system to red flag, whereas a hand audit is subject to not only human error, but human laziness.
I'm really disappointed, we bought a house in 2008 (3 weeks too early to get the $7500) and I had always heard that being a home owner/buying a house, was great for your tax return, but I still owe. We paid like $8500 in interest, $2500 in real estate tax, student loan interest, the whole bit and I still owe!?!?! Is this right?
Man it all depends on how much withholding you did. Also the standard deduction is $10,700 so to get any real benefit from your interest and taxes you have to exceed that and it does not sound like you did. So the deductions from your house are not really helping you much- if any.
To tell if it's right or not, we would need to know your salary, tax withheld, additional income (capital gains, dividends, interest) along with other stuff you probably don't want to share. It is certainly possible to be a home owner and end up owing more tax than what was withheld.
There hasn't really been any data to support that belief. The articles I saw concerning the topic were going on a belief that the IRS only inputs 50% of tax returns, which is completely false. All returns are input, so all returns are subject to the same algorithm that determines audits. You have a 1% chance of being audited regardless of which way you file. I say it makes more sense that you would get audited earlier, not more often, if you efile. Earlier is better for you because you have less time to lose your records. This is my 6th tax season and I have seen zero evidence to believe e-filing causes you to be audited more frequently. My old firm e-filed everything, and my current firm paper files almost everything(the owners are on the wrong side of 65, and finally decided to get with the digital age this year). I've never had an audit of a return that I've prepared or reviewed.
Exactly. One of the main things I would change if I were in charge of the tax code would be how we report medical expenses.
