Quote: (02-05-2017 11:34 AM)Monty_Brogan Wrote:
Diop, wish I would've known you were in Chicago, I would've had you do my taxes. Next year for sure if you're taking on clients.
Could you explain deductions? I put 2 down for my W2 -don't recall if that's allowances or exemptions, this is a little out of my realm and owed the Feds $170.00ish this year.
I made $93,xxx and when I was doing my taxes on turbo taxes I claimed roughly $6,000 in deductions -union dues, clothes, boots, tools, etc. After I entered this in Turbo Tax it still showed I owed the Fed $170. I thought the $6,000 in deductions would lower my tax burden, but it did nothing.
Any feedback or explanation is greatly appreciated.
Hi Monty_Brogan,
For sure, if you need help next year just hit me up on here (hopefully this doesn't piss off the mods, I'm sincerely not trying to solicit for new clients with my posts).
What happened on your Federal 2016 return is that you entered deductions which are considered itemized, but they may not have exceeded the standard deduction which is $6,300 if you are filing as a single person. In other words, you would have to enter more than $6,300 in itemized deductions, otherwise it will default to the standard deduction since that is more beneficial to you.
Also, when it comes to Unreimbursed Employee Expenses such as the ones you entered, they are subject to 2% of your Adjusted Gross Income before they kick in and start to count against the $6,300 standard deduction. In other words, if your AGI is $93,000, the first $1,860 (2% of this AGI) of these expenses will not count towards your itemized deductions, only the amounts that exceed it. So even though you had about $6,000 in these unreimbursed employee expense deductions, only $4,140 are credited towards your itemized deductions, well below the $6,300 standard deduction.
Having said all this, I'm a little befuddled that your Itemized deductions didn't end up surpassing that $6,300 amount since they also include your State and Local Income taxes paid (in addition to a few other things, particularly if you are a homeowner). If you live in Chicago, we all know how high the state taxes are in this state so it seems like you should have exceeded this amount easily on your Schedule A. If you are married, the Standard Deduction doubles to $12,600 so perhaps this is the situation in your case, but you didn't mention that so I'm just speculating.
As far as payroll allowances are concerned, if you want to ensure that you will not owe taxes when you file next year just notify your payroll department that you want to change the number of allowances on your W4 to 1 or 0. The lower the number, the more taxes are withheld each paycheck, so you shouldn't have a balance after filing your 1040 in 2017 if this is what you prefer.
I'm happy to take a quick glance at your return this year if you'd like, just send me a private message.