Individual Tax Write-Offs

It is tax time again and you may be wondering what you can write off. Write-offs on your personal returns are considered itemized deductions usually. For more on itemized vs. standardized deductions, see our post here http://www.genesisaccountingsolutions.com/standard-deduction-2020/. Here are a list of common itemized deductions;

  • Home Mortgage interest
    • You will receive a tax document from your mortgage company if this applies.
  • Medical expenses
    • If you had out of pocket medical expenses including co-pays and medication, you may be able to write these off.
  • Charitable contributions
    • Whether you donate money or items, charitable contributions are tax deductible. If you donate, make sure to get a receipt from the organization you donated to for tax preparation purposes.
  • Investment Interest
    • If you made investments that you had to pay interest on you should receive a tax document from your investment firm that you can use to write off the interest on your returns.
  • Property, state and local income taxes
    • Talk to your tax preparer to find out if you can write off any of these type of expenses.

  • Self-employed business expenses
    • If you run a small business but have not yet incorporated, you can write your business expenses off on your tax return provided you have accurate documentation.
  • Business use of home
    • If you use a portion of your home to run your small business and are not incorporated, you may be able to write off a portion of your home expenses like rent and utilities.
  • Business use of vehicle
    • Similar to business use of home, if you use your vehicle for business purposes and are not incorporated, you may be able to write off your mileage or vehicle expenses.
  • Work related education
    • You must be self-employed, a qualified performing artist, a fee-based state or local government official or a disabled person with impairment-related education expenses in order to claim this itemized deduction.
  • Casualty, disaster and theft losses
    • If you live in an area that had a federally declared disaster such as a hurricane or tornado or if something was stolen from your property, you may be eligible for this deduction.

If you are looking for tax preparation services feel free to contact us contact@genesisaccountingsolutions.com. We offer tax preparation for businesses and individuals.

Standardized Deductions 2020

As we head into tax season it is beneficial to know about your itemized and standardized deductions. What is a standardized deduction? Your AGI or Adjusted Gross Income is the amount used to calculate what taxes you owe. To arrive at your AGI the sum of your earnings minus any deductions or tax credit is used. The standardized deduction is the minimum amount the IRS will allow you to deduct from the sum of your earnings to arrive at your AGI.

Itemized deductions & Tax credits

What is an itemized deduction? Itemized deductions are specific expenses that the IRS allows you to deduct from your income to arrive at your AGI. Tax credits are a dollar reduction in the overall amount you owe. For most people the amount of the standardized deduction will be more than the sum of all itemized deductions. You can take either the standardized deduction or the sum of your itemized deductions but not both.

2020 Standardized deduction List

  • Standard or Single deduction
    • $12,400
  • Married Filing Jointly
    • $24,800
  • Married Filed Separately
    • $12,400
  • Head of Household
    • $18,650

If you need someone to file your personal or business taxes feel free to email us at contact@genesisaccountingsolutions.com or call 800-572-4419 for a free consultation. We specialized in virtual bookkeeping and accounting services and also offer tax preparation and filing.

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