OTHER HANDY TAX DEDUCTIONS
July 6, 2020 - Douglas Myser
Other handy tax deductions. In addition to the itemizable and above the line deductions, there are a few tax deductions that deserve separate mention, because they generally apply only if you have specific types of income. Investment losses: If you sold any investments at loss, you could use these losses to offset any capital gains income that you have. Short term losses must first be applied to long term gains. And if your investment losses exceed your gains for the year, you can use up to $3000 in remaining net losses to reduce your other taxable income for the year. If there are still losses remaining, you can carry them forward to future years. Pass thru income: This deduction is a product of the Tax Cuts and Jobs Act and is designed to help small business owners save money. U.S. taxpayers can now use as much as 20% of their pass thru income, as a deduction. This includes income from an LLC, S-Corporation, or Sole Proprietorship, as well as partnership income and income from rental real estate, just to name some of the potential sources. The deduction is not available to certain taxpayers whose income comes from "specified service businesses" and exceeds certain thresholds. Other handy tax deductions. These may prevent you from needing Tax Resolution.
Gambling losses: You can deduct gambling losses on your taxes, but only to the extent that you have gambling winnings. Other self employment deductions: Finally, if you self employed, there are business deductions you may be able to take on the schedule C of the IRS return. You can deduct ordinary and necessary business such as related travel expenses, office supplies and equipment, or take an above the line deduction for health insurance premiums or retirement accounts for the self employed. If you use a portion of your home exclusively for business, you may be able to take the home office deduction for expenses related to its use.