Staff Report
In virtually every aspect of life, experience is important . But, when it comes to income tax preparation experience goes far beyond important – it’s imperative, a must.
That’s why choosing H & R Block in Benton is also a must, because the experience the entire staff brings could result in extra money in your pocket. All total, owners Terri Page and Pat Wilson and their staff have more than 140 years combined experience in tax preparation.
H & R Block has been a fixture on West Main Street (just one-half block west off the Benton Public Square) for more than 20 years and is ready to help you with your tax returns.
Here are some important questions that H & R Block in Benton can help you answer. Call the office at 618-439-4641 or stop by and visit at 101 West Main Street.
Should I use the standard mileage deduction or actual expenses to claim auto expenses?
You’ll need to make this choice based on your specific situation.
Standard mileage is available unless:
- You use more than five vehicles at one time for your business.
- You claimed actual expenses after 1997 for a vehicle you leased.
- You claimed actual expenses in the first year you used the vehicle for business.
- You’re a rural mail carrier who received a qualified reimbursement.
- You claimed a depreciation deduction other than straight-line depreciation for your vehicle in a prior year.
Both methods require you to keep track of:
- Your business and personal mileage
- The business purpose for all business mileage
If you use the actual expense method, you’ll also need to keep track of receipts for your vehicle’s:
- Gas and oil
- Maintenance
- Interest paid
- Other automobile expenses
Regardless of the method you use, you can claim the business percentage of these:
- Personal property taxes paid
- Any tolls and parking fees
If you’re self-employed, you can only deduct interest expenses and personal property taxes for your business auto expenses. These expenses aren’t permitted for employee vehicle expenses.
Is there a gross cap on medical deductions?
No. You can deduct all qualified medical expenses if they’re more than the annual adjusted gross income (AGI) limit.
If I claim the standard deduction, can I deduct charitable donations?
No. You can only claim charitable donations by itemizing your deductions.
Can I claim a deduction for paying down my student loan?
You can deduct up to 2500 in interest paid on a qualifying student loan.
The student loan interest deduction begins to phase out if your adjusted gross income (AGI) is:
- $65,000 if filing single, head of household, or qualifying widow(er)
- $130,000 if married filing jointly
The deduction is completely phased out if your AGI is:
- $80,000 if filing single, head of household, or qualifying widow(er)
- $160,000 if married filing jointly
If I claim the standard deduction, should I also report my itemized expenses and donations?
Yes. You should tell us your itemized deductions, including donations to charitable organizations. This helps determine if the standard deduction is the most beneficial to you.
You should also keep a record of your itemized deductions. You can carry over deductions to future years if your adjusted gross income (AGI) isn’t high enough use the whole amount this year.
Should I itemize or use the standard deduction?
It depends. Choose the method that results in the largest deduction for you.
The value of your itemized deductions might be more than the amount you’ll receive as a standard deduction. If so, you should probably itemize. If you’re subject to Alternative Minimum Tax (AMT), you might want to itemize even if the standard deduction is more.
Otherwise, it’s usually better to claim the standard deduction. Don’t forget to take the state’s tax results into consideration when making your choice.
How does depreciation affect itemizing deductions?
Depreciation shouldn’t affect your itemized deductions if you’re either of these:
- Sole proprietor
- Farmer
This applies whether you itemize on Schedule A or claim the standard deduction.
If you’re a sole proprietor, report your depreciation deduction as a trade or business expense. Report it on your Schedule C.
If you’re a farmer, use Schedule F.
You’ll claim depreciation as an itemized deduction if both of these apply:
- You’re an employee.
- You’re claiming depreciation as an unreimbursed employee business expense.
You’ll use Schedule A to itemize. Your depreciation deduction is subject to the 2% of adjusted gross income (AGI) limit. So, use depreciation when deciding whether to itemize or claim the standard deduction.
The value of your itemized deductions might be more than the amount you’ll receive as a standard deduction. If so, you should probably itemize. If you’re subject to Alternative Minimum Tax (AMT), you might want to itemize even if the standard deduction is more.
Otherwise, it’s usually better to claim the standard deduction. Don’t forget to take the state’s tax results into consideration when making your choice.
Can a non-citizen claim the standard deduction?
No. If you’re either of these, you must itemize allowable deductions:
- A nonresident alien
- A dual-status alien (both a nonresident and a resident alien during the year)
If you’re a nonresident alien married to a U.S. citizen or resident at the end of the year, you can be treated as a U.S. resident. If you make this choice, you can take the standard deduction.
Which work-based deductions can I claim?
If your employer didn’t reimburse your expenses, you can deduct all business-related expenses that are both of these:
- Ordinary expenses — common and accepted in your trade or business
- Necessary expenses — helpful and appropriate for your business. An expense doesn’t have to be required to be considered necessary.
Unreimbursed expenses you can deduct include:
- Mileage
- Cost of uniform
- Tools
- Meals and entertainment
- Lodging
- Subscription to trade journals
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