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Tag Archives: Tax Deduction

Not All Interest Is Deductible For Taxes

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on August 9, 2022 by Lake Wylie Tax Services StaffAugust 9, 2022

Not All Interest Is Deductible For TaxesA frequent question that arises when borrowing money is whether or not the interest will be tax deductible. That can be a complicated question, and unfortunately not all interest an individual pays is deductible. The rules for deducting interest vary, depending on whether the loan proceeds are used for personal, investment, or business activities. Interest expense can fall into any of the following categories:

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Posted in Tax Central | Tagged Tax Deduction, Tax Planning

Charitable Contributions Deduction Liberalized for 2021

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on January 12, 2021 by Lake Wylie Tax Services StaffJanuary 12, 2021

Charitable Giving Deductions changes for 2021As a means to stimulate charitable contributions during the COVID crisis, Congress made two notable changes for 2020—one allowing taxpayers that don’t itemize their deductions an above-the-line deduction for cash contributions of up to $300 and another for those itemizing their deductions to increase the maximum deduction for cash contributions to 100% of their adjusted gross income (AGI).

The recent COVID-related tax relief act, passed late in December, extends and enhances those liberalized charitable contribution deduction provisions. Here is a rundown on these charitable contribution tax benefits for 2021:

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Posted in Tax Central | Tagged Charity, Covid-19, Tax Deduction

Mortgage Insurance Premium Deduction Retroactively Extended

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on January 28, 2020 by Lake Wylie Tax Services StaffJanuary 28, 2020

Mortgage Insurace Premiums Tax DeductionOn December 20, 2019, President Trump signed into law the Appropriations Act of 2020, which included a number of tax law changes, including retroactively extending certain tax provisions that expired after 2017 or were about to expire, a number of retirement and IRA plan modifications, and other changes that will impact a large portion of U.S. taxpayers as a whole. This article is one of a series of articles dealing with those changes and how they may affect you.

For tax years 2007 through 2017, when taxpayers itemized deductions, they could deduct the cost of premiums for mortgage insurance on a qualified personal residence as home mortgage interest.

This deduction has been retroactively extended back to 2018 and through 2020. If you paid premiums for mortgage insurance in 2018 or were amortizing prepaid mortgage insurance premiums from an earlier year’s home purchase, you may be able to amend your 2018 return for a tax refund.

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Posted in Tax Central | Tagged Home and Mortgage, Tax Deduction

Above-the-Line Education Tax Deduction Reinstated

Lake Wylie Tax Service | Bookkeeping | Payroll Service Posted on January 21, 2020 by Lake Wylie Tax Services StaffJanuary 23, 2020

Education Tax Deduction Reinstated
Looking back a few years, a taxpayer who had higher education expenses could generally take advantage of four* possible tax benefits: an itemized deduction if the education was job-related, a higher education tuition and expenses tax credit using either the American Opportunity Tax Credit (AOTC) or the Lifetime Learning Tax Credit (LLC), or an above-the-line deduction for higher education tuition and fees. However, the 2017 tax reforms did away with the itemized deduction through 2025, and Congress allowed the above-the-line deduction for higher education tuition and fees to expire at the end of 2017, leaving only the two education credits as options.

As part of the Appropriations Act of 2020, Congress has retroactively reinstated the above-the-line deduction for 2018 through 2020.

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Posted in Education Planning | Tagged Tax Credit, Tax Deduction
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