This version of Turbo Tax is better than ever with more inside tips and here are some tip to help you get started.
New York - Forbes.com has teamed up with the authors of Ernst & Young Tax Guide 2006 to develop a series of tips to help you avoid paying more tax than necessary. The circumstances of your situation will determine if you qualify, so review the tax code and check with your tax adviser.
Here are ten things you need to know about limits on itemized deductions.
1.Basic Limits
You are subject to the limit on certain itemized deductions if your adjusted gross income is more than $145,950, or $72,975 if you're married filing separately. Your adjusted gross income is the amount on Form 1040, line 37.
2. Limits on Deductions
The following Form 1040, Schedule A deductions are subject to the overall limit on itemized deductions: a) Taxes, line 9; b) Interest, lines 10, 11 and 12; c) Gifts to charity, line 18; d) Job expenses and miscellaneous deductions, line 26; e) Other miscellaneous deductions, line 27.
3. No Limits
The following Schedule A (Form 1040) deductions aren't subject to the overall limit on itemized deductions but are subject to other applicable limits: a) Medical and dental expenses, line 4; b) Investment interest expense, line 13; c) Casualty and theft loses from personal-use property, line 19; d) Casualty and theft losses from income-producing property, line 27; e) Gambling losses, line 27.
4. Calculating the Limit
If your itemized deductions are subject to the limit, the total of all your itemized deductions is reduced by the smaller of: a) 3% of the amount by which your adjusted gross income exceeds $145,950 or $72,975 if married and filing separately; b) 80% of your itemized deductions that are affected by the limit.
5. Worksheet
After you have completed Schedule A (Form 1040) through line 27, you can use the Itemized Deductions Worksheet in the Form 1040 instructions for Schedule A to figure your limit. Enter the result on Schedule A, line 28. Keep the worksheet for your records.
6. State and Local Taxes
The American Jobs Creation Act of 2004 gives the taxpayer the opportunity to elect to deduct state and local general sales taxes instead of state and local income taxes as an itemized deduction. This is helpful if you live in a state that doesn't impose an income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming.
7. Bunching
If your itemized deductions are subject to the 3% limitation, you may want to consider "bunching." The technique is effective if you're able to accumulate deductions so that they're high in one year and low the next. This can help you take advantage of those itemized deductions if the limitation would normally cause the standard deduction to be higher.
8. Calculating the 3% Limit
In certain situations, it's possible for the 3% limitation to reduce allowable itemized deductions below the standard deduction amount. You should consider this possibility when you are choosing whether to itemize your deductions or to use the standard deduction.
9. Record Keeping
Save all necessary receipts and, for the record, worksheets used to calculate your deductions.
10. Additional Limits
Congress has imposed additional "overall" limitation on the deductibility of certain a group of itemized deductions including taxes, home mortgage interest, charitable contributions and miscellaneous itemized deductions.
Here are ten things you need to know about limits on itemized deductions.
1.Basic Limits
You are subject to the limit on certain itemized deductions if your adjusted gross income is more than $145,950, or $72,975 if you're married filing separately. Your adjusted gross income is the amount on Form 1040, line 37.
2. Limits on Deductions
The following Form 1040, Schedule A deductions are subject to the overall limit on itemized deductions: a) Taxes, line 9; b) Interest, lines 10, 11 and 12; c) Gifts to charity, line 18; d) Job expenses and miscellaneous deductions, line 26; e) Other miscellaneous deductions, line 27.
3. No Limits
The following Schedule A (Form 1040) deductions aren't subject to the overall limit on itemized deductions but are subject to other applicable limits: a) Medical and dental expenses, line 4; b) Investment interest expense, line 13; c) Casualty and theft loses from personal-use property, line 19; d) Casualty and theft losses from income-producing property, line 27; e) Gambling losses, line 27.
4. Calculating the Limit
If your itemized deductions are subject to the limit, the total of all your itemized deductions is reduced by the smaller of: a) 3% of the amount by which your adjusted gross income exceeds $145,950 or $72,975 if married and filing separately; b) 80% of your itemized deductions that are affected by the limit.
5. Worksheet
After you have completed Schedule A (Form 1040) through line 27, you can use the Itemized Deductions Worksheet in the Form 1040 instructions for Schedule A to figure your limit. Enter the result on Schedule A, line 28. Keep the worksheet for your records.
6. State and Local Taxes
The American Jobs Creation Act of 2004 gives the taxpayer the opportunity to elect to deduct state and local general sales taxes instead of state and local income taxes as an itemized deduction. This is helpful if you live in a state that doesn't impose an income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming.
7. Bunching
If your itemized deductions are subject to the 3% limitation, you may want to consider "bunching." The technique is effective if you're able to accumulate deductions so that they're high in one year and low the next. This can help you take advantage of those itemized deductions if the limitation would normally cause the standard deduction to be higher.
8. Calculating the 3% Limit
In certain situations, it's possible for the 3% limitation to reduce allowable itemized deductions below the standard deduction amount. You should consider this possibility when you are choosing whether to itemize your deductions or to use the standard deduction.
9. Record Keeping
Save all necessary receipts and, for the record, worksheets used to calculate your deductions.
10. Additional Limits
Congress has imposed additional "overall" limitation on the deductibility of certain a group of itemized deductions including taxes, home mortgage interest, charitable contributions and miscellaneous itemized deductions.
By
WPB Consulting
5.0 out of 5 starsTurbo Taax 2010 - getting pretty good, December 6, 2010
This review is from: Turbo Tax Home & Business Federal + e-File + State 2010 (CD-ROM)
I have been a Turbo Tax user for quite a while, and have definitely seen a progression in quality and features of the Turbo Tax product. I remember last year, there were some installation issues for some. Turbotax 2010 downloaded and installed on my Windows 7 64-bit quickly and without issue. After executing the program, it immediately downloaded some updates and I was ready to get to work.
As usual, the State software is included free. This year, the integration with the State software seems even better. While the State download wasn't available yet, it gave me options for notification and what the status of availability was.
There doesn't seem to be many new features over last year, in fact, as far as I can tell, they don't come right out and say what is new over last year. However, the ones that are there are very nice:
* The Live Community is integrated even more into the software and is a handy feature. It is context sensitive, so the most popular questions for each section appear when you enter that section.
* There is also a Flags section which allows you to easily mark sections to work on later, which has proven valuable when trying to complete forms for which you only have preliminary data.
* Switching between Forms and Interview seems to be smoother as well, and there seems to be several ways to navigate to exactly the data you want to work on.
* It seems to be all about options, for many areas, the software offers you multiple ways of calculating the data so that you get the best possible return.
* Finally, Its Deductible is still integrated and is a great tool.
Tax software has a unique problem; the features are to provide the smoothest and fastest tax preparation as possible. So, the better they make the product, the less time I need to work with it.
I plan to update this review as I complete my personal/business returns.
5.0 out of 5 stars Works well each and every year, January 14, 2011
By Charles D. ComeauThis review is from: Turbo Tax Home & Business Federal + e-File + State 2010 (CD-ROM)
As last year the Turbo Tax CD works very well , easy to use , no need for outside help to do your taxes anymore.
