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How to prepare tax return with these information: The Matthews incurred $16,500 of itemized deductions ($9,600...

How to prepare tax return with these information:

The Matthews incurred $16,500 of itemized deductions ($9,600 for property tax and $6,900 for mortgage interest on a loan of $215,000). They are also allowed to claim a child tax credit for each of their children.

Angela spent $2,380 to attend a CPA conference in Atlanta. She attends the annual conference to learn more about the profession and also get her CPE credit. Her expenses were not reimbursed by her employer

Expert Solution

Based on the information provided,

Matthews can claim the given coditions if the following conditions are satisfied:

a) $9,600 for property Tax can be claimed only if the following conditions ar esatisfied

Property, appartement or land is on which Taxes are paid are owned by you
Property taxes had been actually paid during the year
And the amount of taxes are purely for property and the amounts paid for water or other activities are excluded from it.
Also the property taxes on Boats, vehicles can also be claimed
Property taxes paid on th eproperty outside United States can be claimed too.
And the important thing it does not allow more than $10,000 if filing jointly and $5000 if married and filing seperately

b) To be eligible to claim, interest on mortagaged loan, after 2017, the interest on first $750000 is only eligible.

c) Further, the confernece expenses of $2380 is not available as deduction under Lifeteime learning credit as it does not amount for Learning or tuition fees.

d) further they can claim Child Tax credit of $2000 per child

So total itemised deductions, assuming mtthews opt to as married couple, filing jointly

Property Taxes ; 9600

Interest : 6900

Child Credit : 2000

Total : 18500

So, total of Itemised credits is less than the standard deduction $24,400 for Tax year 2019($24,800 for tax yea 2020)

In view of the above facts, Matthews would be benefitted if they opt for Standard deduction for married couple filing jointly instead of going for Itemised Credits .

Hences the Matthews would have deductions of $24,400 for the Tax year 2019(24,800, if tax yeear is 2020)

ekkarill92 answered 2 years ago

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