by Martha Eisenberg | Dec 14, 2019 | Tax Tips & News
Allowable deductions for Iindividual Retirement Account (IRA) contributions are based on these three factors:
- Whether or not you are covered by a retirement plan at work
- Your filing status
- Your adjusted gross income (AGI)
If you are considering making an IRA contribution for 2019, we suggest that you consult the tables provided by the IRS at the links below to see how your AGI will affect whether you can deduct all, some, or none of your IRA contribution(s).
IRS rules for IRAs: If You Are Covered at Work or If You Are Not Covered at Work
by Martha Eisenberg | Dec 14, 2019 | Tax Tips & News
The percentage for deducting medical expenses on Schedule A increases to 10% of adjusted gross income this year, versus the 7.5% allowed for 2018. Historically, most taxpayers don’t meet this threshhold—and we anticipate even fewer with the larger percentage requirement—but it is still worth investigating, particularly if you or your family members have undergone any significant medical procedures in the past 12 months.
To figure out if you have enough medical expenses to claim a deduction, the formula is to multiply your Adjusted Gross Income by 10%. For example:If your Adjusted Gross Income is $100,000.00, any out-of-pocket medical expenses above $10,000.00 can be added to Schedule A as a deduction.
If it is available, the best way to deduct your medical expenses is still to take advantage of a Flexible Spending Account through your employer.
Please note that we do not need to see copies of your medical and dental receipts! The total amount of all of your medical expenses is all we need to include on Schedule A if you are itemizing. If the deduction for medical expenses is ever questioned, we will need the receipts at that time, but otherwise, you should maintain the privacy of your medical information just as you would with any service provider.
by Martha Eisenberg | Dec 13, 2019 | Tax Tips & News
The standard deductions for 2019 returns are as follows:
$24,400.00 if you are Married and filing a joint return;
$18,350.00 if you are filing as Head of Household; and
$12,200.00 if you are a Single filer.
You’ll notice they haven’t gone up much, but every little bit helps!
by Martha Eisenberg | Dec 12, 2019 | Tax Tips & News
There is good news for taxpapers 65+ who qualify for the Massachusetts Circuit Breaker real estate tax credit program. For some senior citizens who own or rent residential property as their primary residence, the credit has increased by $30.00 this year, to $1,130.00. The maximum assessed value of the homeowner’s principal residence, has also increased, by $30,000.00, to $808,000.00.The qualifying income threshholds have increased as well, by $2,000, regardless of filing status, as indicated below:
| Filing Status | 2018 | 2019 |
| Single | $58,000 | $60,000 |
| Head of Household | $73,000 | $75,000 |
| Married Filing Jointly | $88,000 | $90,000 |
This may be enough of an increase to include some of our clients who previously were ineligible. We’ll be looking to determine your qualifications as we head into tax season to make sure no deserving seniors miss out.
by Martha Eisenberg | Dec 10, 2019 | Tax Tips & News
IRS Notice 2019-59, published on November 6, 2019, announced changes to employee contribution limits for 2020. Now, employees enrolled in 401(k), 403(b), and the majority of 457 plans may contribute up to $19,500 towards their retirement.
The catch-up contribution limit for employees aged 50 and over who participate in these plans is increased from $6,000 to $6,500. The limitation regarding SIMPLE retirement accounts for 2020 is increased to $13,500, up from $13,000 for 2019.
