Only businesses classified as corporations can deduct charitable donations on their business tax return. These contributions to charity cannot be more than 60% of the adjusted gross income. Business owners for other types, including sole proprietorships and partnerships, can deduct charitable contributions on their own personal tax return.
Profit from the sale of a home will fall under capital gains and be taxed accordingly. If your property has increased in value significantly since the time of purchase, you may be hit with a large and unexpected tax burden. The difference of what was paid for the home initially and the selling price, less closing costs, real estate commissions, and other fees is considered capital gains. If you have lived in the residence for at least two of the past five years you can exempt $250,000 and $500,000 for married couples filing jointly. Any profit exceeding this amount can be subjected to the capital gains tax.
Filing for bankruptcy is a difficult decision, and one that should not be taken lightly. While under federal bankruptcy law this will stop creditors from chasing you, tax debt is treated differently being considered nondischargeable priority debt. With exceptions, bankruptcy will not eliminate this type of debt and it is given priority over other claims. If you have a tax lien against your property, filing for bankruptcy will not remove the lien and the IRS will still have a claim to your property until the debt is paid.
In 2018 the Tax Cuts and Jobs Act eliminated the ability for businesses to deduct entertainment and recreation expenses. However, the Business Meal Tax Deduction was not eliminated with this change. To qualify for this deduction the meal expense may not be lavish or extravagant, as subjectively determined. The taxpayer or an employee of the taxpayer must be present at the meal and the food and drink must be provided to a business associate.
Summer camp and daycare is tax deductible for children under age 13 or if the child is a disabled dependent. The tax credit may cover up to $3,000 in qualifying expenses for one child or up to $6,000 for two or more children. This includes money paid to a daycare center, babysitter, summer camp, or other provider offering childcare. Covered under the Child and Dependent Care Credit, this was created for working parents to offset the price for childcare. However, parents who are full-time students and those that are unemployed and actively looking for work may also qualify for this deduction
There are tax deductions for those that have dependents living full-time in their household, the most common of which is the Child Tax Credit and Child and Dependent Care Credit. To qualify as a dependent, this can be a child that is under age 19 or under 24 if they are a full-time student. If the child is permanently disabled, you can qualify for these deductions regardless of age. Caring for aging relatives that are living in your home may also qualify for a tax deduction as a dependent if you are financially supporting them.
Head of household tax filers can claim significantly more tax deduction than their single counterparts. To qualify for head of household status you must be unmarried or living separately from your spouse for at least six months of the year. Temporary absences for work or school are not considered living separately. The head of household must pay more than half of the expenses for the home, including rent or a mortgage, utilities, repairs and property taxes. You must have a qualifying dependent, such as a child or elderly parent, residing in the home the majority of the year.
Self-employed individuals can claim office supplies on their taxes. This includes printer ink, paper, pens and pencils and other everyday supplies that are used for business purposes. Individuals that work for an employer are not eligible for this type of deductions. Instead, you should be able to seek reimbursement from your employer for out-of-pocket expenditures for office supplies.
Retirement income is not immune to taxes. Taxes on required minimum distributions, including traditional IRAs and 401(k)s, are taxed on their gains and their pre-tax deductible contributions. However, because retirement is likely lower than when the individual was working this is typically taxed at a lower rate. The tax rate applied to this income is determined by the income of the recipient when the money is taken out. For the most recent tax year, this tax rate was capped at 37%.
If you have not yet received your tax refund, you can track this on the IRS’s web site at https://www.irs.gov/refunds You will need your social security number and the exact dollar amount of the refund that you are expecting. It isn’t unusual for refunds to be delayed, particularly those that were filed closer to the tax deadline. If there is a discrepancy on your tax return or missing documents, this will slow down your refund as the IRS works with the filer to rectify this.