Personal Finance & Money Stack Exchange
Personal Finance & Money Stack Exchange

Questions tagged [tax-deduction]

A tax deduction is a deduction that lowers a person’s tax liability by lowering his taxable income. Deductions are typically expenses that the taxpayer incurs during the year that can be applied against or subtracted from his gross income in order to figure out how much tax is owed.

A reduction of the income subject to tax, for various items, especially expenses incurred to produce income.

Deductions are used by the policy makers to encourage various behaviors based on the policy goals.

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Isn't "I bought [blank] as a tax writeoff" complete nonsense?

There's a trope in movies where people do something to keep from being bumped into a higher tax bracket (For example, in The Big Lebowski: "I'll have to check with my accountant, but it might bump me up to another tax bracket"). The thing is, that…
Lord Farquaad
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I have sole custody of my child but the child's father's brother claimed him as a tax deduction

I have court papers showing that I have full and sole custody of my son and that he was with me like 99% of the year. I let my son's father have him a few weekends last year but only a handful. My son's father told his brother that he should claim…
neubert
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Why are businesses allowed to deduct expenses from their income, while individuals generally cannot?

In general, it's an accepted principle that businesses should be allowed to deduct expenses. How did this principle come about? And why doesn't it appear to apply to individuals to the same extent? Now I understand that businesses can't willy-nilly…
Jay
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Tax on gambling winnings with social security number

My roommate told me that he met someone at an MGM casino who won $100,000. That person told my roommate that he does not have a social security number to turn his winnings into cash. He made a deal with my roommate to share the winnings 80-20. My…
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Deducting charitable donations under new U.S. tax law

I usually donate about $20k to charities every year, and I don't have many other deductions to claim. Given that the new tax law doubles the standard deduction to $24k, I effectively don't get tax benefits from my charitable donations anymore…
painter48179
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How can I achieve a 13% U.S. Federal tax rate?

MSNBC just had a segment explaining how Bernie Sanders paid 13% in federal taxes. This year my income changed significantly, and I'm making a little less salary than Sanders's ~$200k. However, unlike him, I found that all the deductions I…
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Is the Standard Deduction better than Itemized when both are the same amount?

For 2018 the standard deduction is $12,000 for individuals, $24,000 per household. If someone's itemized deductions equals the standard deduction, or is very close, which one is better to take? For example, my understanding is if you itemize, then…
jimp
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Can I expense when buying my own lunch

I am organized as a single member LLC. And I work from home. I see that some corporations buy their employees lunch and expense it. My question is... Can I order lunch or go out to eat by myself and expense it? It seems only fair because I'm an…
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Is it worth saving HSA funds until retirement?

I recently discovered that there is no lifetime limit to contributing to an HSA account - provided that you don't contribute more than the limit per year. Assuming that an individual makes a decent salary that covering their max-out-of-pocket for…
Michael
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Someone offered tax deductible donation as a payment method for something I am selling. Am I getting scammed?

Context: I am selling a camera on facebook marketplace and someone proposed the following: Person: Would you consider a fully tax deductible Donation to a San Francisco arts non-profit? Me: Wait what does that mean? I can get all of that money from…
Tinker
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Why did the federal government ever allow taxpayers to deduct their state taxes from their federal taxes?

At the end of 2017, President Trump signed into law the Tax Cuts and Jobs Act with among other things eliminated the federal tax deduction for state taxes paid. Essentially, the federal government allowed taxpayers to remove whatever they already…
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The Government might have seized my investment assets, how do I treat them on my tax return?

I had money invested in Russia during 2022 through the ETF FLRU. At the beginning of the year when the Russia/Ukraine conflict start the government seized a bunch of Russian assets including this ETF. Now the question is what do I do about these…
Dragon Creature
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Tax benefits of recycling

Today I spent 15 minutes of my time to drop off burnt-out incandescent light bulbs at the only place in town that accepts them. I was charged $1/bulb for helping the planet. The cashier told me to keep my receipt for "tax purposes", but was unable…
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What's my tax situation if I earned $20k, age 22, and live with parents?

I'm a bit confused about what to expect when I file tax returns. I heard my parents can't claim me as a dependent because I earned more than $6k for the year. What's the situation if I live with them and have most of my expenses paid by them? They…
btrballin
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If I donate depreciated stock to charity, can I deduct both the market value and the capital loss?

I have stock that's depreciated in value since I bought it. Just to make up some numbers, I paid $8000 for it, and it's worth $1000 now. If I donate the stock to charity, can I take the charitable deduction (if I itemize) of $1000 and the capital…
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