How can I maximize my tax return?
So I am trying to figure out this whole "deductions" thing. Does it mean for instance I pay roughly $3,700 a year in taxes. This year i have donated about $2,000 worth of stuff to goodwill due to a move. I have over 10,000 in medical bill payments. And a few other things that determined a deduction I moved 3000 miles to take a new job. So if I paid $3700 in taxes and have $12,000 in deductions does that mean I am guaranteed by the IRS to get all of my $3700 back that I have paid them? I went to a tax services website H & R block and typed in some hypothetical numbers and when I choose to itemize to show my deductions my return was almost $1000 less than if I used the Standard Deduction why is that? Thanks in advance for your answers!
Asked By: ncblkgy - 10/16/2006
Best Answer - Chosen by Asker
You don't give enough information to answer all of your questions. Your $10k in medical bills may or may not be deductible - it depends upon your AGI. Your medical deductions are anything greater than 7.5% of your AGI. Your moving expenses for a new job aren't a deduction, they go on line 26 of the Form 1040, if... More
Answered By: stl_aer - 10/16/2006
Additional Answers (4)
Standard deductions are based on statistical averages and normal behavior. Your move and level of giving mean that it is probably better to itemize your deductions. It is unlikely that you will get all of your tax refunded but you should itemize.
Answered By: Senor Pig - 10/16/2006
Ask a friend who they use for a CPA. I use one, and it costs me less than turbo tax, they make fewer mistakes, and they advise me on ways to maximize my savings, or tax avoidance.
Answered By: John M - 10/16/2006
You do not say what your filing status is, so it is hard to give you numbers. However, the Standard Deduction is usually better if you don't have a mortgage or pay property taxes. If you did, did you include them in the calculation? Remember medical bills are only deductible to the extent that they are more than 7.5... More
Answered By: skip - 10/16/2006
Deductions reduce your taxable income. They do not directly reduce your tax liability. If the total of you itemized deductions is less than the standard deduction, you should use the standard deduction. You can't claim both itemized deductions and the standard deduction. Medical expenses are only deductible to the... More
Answered By: STEVEN F - 10/16/2006
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