The standard
deduction will increase for single or married filing separate taxpayers from $3,070 to $3,165.
Consequently, the Institute commends the IRS for concluding in the proposed regulations that in appropriate cases charitable contribution
deductions can be definitely related to a class of gross income.
Prepaying
deductions is the general rule, but there are exceptions.
Outside of the two-year window, the taxpayer must take a taxable distribution from the IRA and report the income; a donation is reported as an itemized
deduction subject first to the charitable
deduction limits, then to the itemized
deduction phaseout.
Individuals can take an itemized
deduction for casualty losses to property not connected to a trade or business.
The bottom line is that the 2018 standard
deduction has a greater chance of exceeding your 2018 itemized
deductions.
Know the rules for taxation of state income tax refunds: Historically, the tax benefit rule has caused a refund of state income taxes deducted in a prior year to be taxable to the extent that itemized
deductions that year exceeded the standard
deduction.
The punitive component is included in gross income and any allocated legal fees and court costs are deductible as miscellaneous itemized
deductions under IRC section 212 as expenses incurred in the production of income.
"As recently reported by the IRS, the amount claimed as
deductions in tax year 2003 for clothing and household items was more than $9 billion.
In addition to subtracting CGS from DPGR, in determining its QPAI, a taxpayer must also subtract
deductions that are directly allocable to DPGR, and a ratable portion of
deductions that are not directly allocable to DPGR or to another class of income.
If your
deductions add up to a disproportionate share of your income, you, like the Gordons, could be hit with the AMT.
The 2003 CRF study: Customer
Deductions, Impact on Receivables confirms that short payments continue to be a significant challenge for many companies.