We can start filing the personal tax return in a few days, next Monday. (Note that the IRS STILL won’t have several forms ready to go until the end of next week. Thanks to retroactive changes in the law that Congress passed late last month.)
So, let’s go over what it can and can’t do.
Oh no you can’t!
Let’s start with what you used to do and can’t anymore.
Don’t bother to collect all the expenses from your employees that your boss never bothered to reimburse you. They are no longer deductible, whether or not they exceed 2% of your adjusted gross income. (Which is pretty cool, as many of you won’t be able to detail anyway.)
EXCEPT … (This is the tax code; there are ALWAYS exceptions)
If you are in the Reserves (i.e. the military, friends), have some form of disability and disability-based work expenses, are you a fee-paying state or local government official, or a performing artist qualified, then you can deduct those expenses related to these acts. You must use Form 2106 or 2016-EZ and add the calculated deduction to line 11 of Schedule 1 (Form 1040).
Now for those who never ever.
Travel is not deductible (unless, in a very limited sense, we are talking about the people mentioned above)
Lobbying is not deductible (that means even if you travel to Washington DC to convince someone to pass some legislation)
Campaign contributions (no, they’re never charitable! And advertising in a convention bulletin, dinner, or program at such events are your personal expenses, too).
Fines and Penalties (those traffic tickets, parking tickets, etc. are all your personal expenses for being a trickster)
Club fees (It doesn’t matter if you have business meetings there; only the cost of food is allowed, if genuine business is being discussed. This includes airline clubs, unless you actually conduct and document the business matters involved and deduct the Cost JOURNAL of the visit.)
Moving expenses. I have already written about this missing deduction. (Unless you are in the military and have moving orders, there is no way you can deduct your moving costs. Worse, your employer may have to report moving expenses paid on your behalf as taxable income. deduction and loss of the ability to spend the costs of looking for a new job, the historical migration of Americans has largely waned, as has the ability to find higher paying jobs, often requiring a “change of scenery.” .
Woo-hoo. They are back!
Congress (and TheDonald) retroactively amended the tax code in December with the budget reconciliation bill. In particular, this change can help many people reconsider whether they can itemize this year.
Medical expenses. As long as they exceed 7.5% of your adjusted gross income. The money spent below the threshold is all yours to spend; above the threshold is deductible. This includes fertility treatment, alcoholism treatment (inpatient, including meals and lodging), anti-smoking programs (but only prescription drugs, not nicotine patches), and service animals (purchase, training, maintenance). [including food!] they all count. Sorry, Weight Watchers, Nutrisystem, and the like do not qualify, UNLESS your doctor has prescribed a program (obesity or cardiopulmonary causes) for you. Neither are those cold remedies (and other over-the-counter medications except insulin) and certainly NOT cosmetic surgery.
For those special cases …
Gambling losses are deductible. More or less. As long as your earnings meet or exceed those costs. (In other words, you are mitigating the winnings of the game that you must report.)
Casualty and theft losses. Only for income generating properties. Like rental properties and vacant lots. Or, if you (God forbid) were affected among others in a Federal Disaster Zone. Also, if you trade gold and silver, yes, that could be boosted too. (You already deduct losses on stocks and bonds on Schedule D and Form 4797, to the extent of your earnings PLUS $ 3,000. Ponzi scheme people can also deduct losses from earnings. Therefore, that Loss of $ 300,000 can take you 100 years to deduct. May you live that long.)
Home offices. You need to have a business, i.e. Schedule C (owners and gig workers), Schedule E (rental property, K-1 beneficiaries who WORK in that business), and / or Schedule F taxpayers (farmers) .
Due special. They are NOT clubs, but the chamber of commerce, trade boards, trade leagues, civic or public service organizations, trade associations, professional societies, and real estate boards are specifically approved. NO union dues (since they are employee expenses, friends).
I have already informed you what type of documents you need to have on hand for us to file your taxes.
We are waiting!