We can start filing personal taxes in a few days, this coming Monday. (Note that the IRS STILL won’t have several forms ready to go until the end of next week. Thanks to retroactive changes to 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 charging your employees for all expenses that your boss never bothered to reimburse you for. They are no longer deductible, whether or not they exceed 2% of your adjusted gross income. (Which is fine, as many of you won’t be able to go into detail anyway.)
EXCEPT… (This is the tax code – there are ALWAYS exceptions)
If you are in the Reserves (i.e. the military, friends), have any type of disability and have disability-based work expenses, are a fee-based state or local government official, or a qualified artist, 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 never again.
Displacements are not deductible (unless, in a very limited sense, we are talking about the above persons)
Lobbying is not deductible (that means even if you travel to Washington DC to convince someone to pass some legislation)
Campaign contributions (no, they are never charitable! And advertising in a convention newsletter, dinner, or program at such events are also your out-of-pocket expenses).
Fines and Penalties (those traffic tickets, parking tickets, etc. are all your personal expenses for being a violator)
Because of the club (It doesn’t matter if you hold business meetings there; only the cost of food is allowed, if genuine business is discussed. This includes airline clubs, unless you actually do, and document the business matters involved, and deduct the DAILY cost of the visit.)
Moving charges. I have already written about this missed deduction. (Unless you’re in the military and have orders to move, there’s no way you can deduct your moving costs. Worse yet, your employer may have to report the moving expenses they paid on your behalf as taxable income for Between this loss of deduction – and the loss of the ability to cover the costs to search for a new job – the historical migration of Americans has largely tempered.
Woo-hoo. They are back!
Congress (and TheDonald) retroactively amended the tax code in December with the budget reconciliation bill. In particular, this change may help many people reconsider whether they can itemize this year.
Medical expenses. As long as they exceed 7.5% of your adjusted gross income. 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 (purchasing, training, keeping [including food!] everything counts Sorry, Weight Watchers, Nutrisystem and the like don’t qualify, UNLESS your doctor has prescribed a program (obesity or cardiopulmonary causes). 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. About. As long as your earnings meet or exceed those costs. (In other words, you’re mitigating the gambling winnings you’re required to report.)
Casualty and theft losses. Only for income-producing property. Such as rental property and vacant lots. Or, if you (God forbid) were affected among others in a Federal Disaster Area. Also, if you trade gold and silver, yes, that could also be boosted. (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 sufferers can also deduct losses against earnings. So, that loss of $300,000 can take you 100 years to deduct. You may live that long.)
Home offices. You need to have a business, that means Schedule C (properties and temporary workers), Schedule E (rental property, K-1 beneficiaries WORKING in that business), and/or Schedule F filers (farmers).
special debt. NO clubs, but chambers of commerce, boards of trade, trade leagues, civic or public service organizations, trade associations, professional societies, and real estate boards are specifically approved. NOT owed by the union (since they are expenses of the employees, friends).
I’ve already reported what kind of documents you need to have on hand for us to file your taxes.
We are waiting!
