Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
AGI and tax deductions
Old 06-24-2009, 08:54 PM   #1
Recycles dryer sheets
 
Join Date: Mar 2009
Posts: 357
AGI and tax deductions

What deductions are limited when your AGI gets to a certain point?

Here's a few that I can think of:

Traditional IRA
Roth IRA
Charitable Contributions
Medical Expenses

Does anyone know how the phase out for charitable contributions works?
__________________

__________________
bank5 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 06-24-2009, 09:26 PM   #2
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 21,153
see page 13 for details on limits.

http://www.irs.gov/pub/irs-pdf/p526.pdf
__________________

__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
Alan is online now   Reply With Quote
Old 06-24-2009, 09:55 PM   #3
Recycles dryer sheets
 
Join Date: Mar 2009
Posts: 357
Quote:
Originally Posted by Alan View Post
see page 13 for details on limits.

http://www.irs.gov/pub/irs-pdf/p526.pdf
That brought me to schedule A (Form 1040), and then line 29 took me to the schedule A instructions - http://www.irs.gov/pub/irs-pdf/i1040sa.pdf

Page A-10 has the calculations. The phase out is pretty minimal. It seems like it's only about 2% of the income over the AGI limit.
__________________
bank5 is offline   Reply With Quote
Old 06-24-2009, 11:09 PM   #4
Thinks s/he gets paid by the post
Helen's Avatar
 
Join Date: Oct 2004
Location: Portland
Posts: 1,358
I am just at the point where my out of pocket medical costs are at the 7.5% of my AGI. I talked to my dentist who agreed that I would eventually need to crown my last three molars that are currently uncrowned. I've already have paid for two crowns and a root canal, plus two hearing aids and new lenses for my glasses in 2009. Geez, I'm only 52.

I ran the numbers through last years Turbo Tax and I have a 33% off sale going on in my mouth at this point. I'm going to proactively crown the last three, get one paid for from the deductions and hopefully save myself future root canals.

I'm also going to take advantage of some of the energy tax credits. I am getting a wood insert for my fireplace. The tax credit includes the insert, installation costs, liners and facing for the inserts so I will save about $1,000 bucks. The price of the insert is pretty good to begin with, about $500 below list. This is the Vermont Castings Montpelier non-catalytic wood insert.

I'm also having insulation blown into the walls and attic and hung between the exposed joists in the basement. Then there are the two storm doors. We wanted screen doors, but if I get storm doors with screens built in for the summer I can get the tax credit. Plus, again I will save on heating costs and avoid wanting an AC because I can open all the doors in the summer and get a nice cross breaze.

I love saving money on things that will eventually pay for themselves.

My poor brother installed a new furnance, A/C and duct work in 2008. I don't think he got squat for a tax break.
__________________
Helen is offline   Reply With Quote
Old 06-25-2009, 09:31 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,300
Education credits is another. The only way to tell is to go through the worksheets to see if there are limit calculation buried in there, or dig through the documentation.

This is one reason I hate it when people refer to "marginal tax rates" as if they mean something. With all the ifs/ands/buts in the tax code, and depending on your personal circumstances, your "progression" in tax rates can effectively climb a brick wall, not the slope the "marginal rates" would indicate. And then the AMT....

I experience this when I try to convert Trad to Roth IRA - there is a lot more to it than just trying to stay within a tax bracket, all sorts of things kick in at different levels and that affects your "effective marginal rates".

-ERD50
__________________
ERD50 is online now   Reply With Quote
Old 06-25-2009, 10:33 AM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2007
Posts: 7,533
Quote:
Originally Posted by Helen View Post
I'm also going to take advantage of some of the energy tax credits. I am getting a wood insert for my fireplace. The tax credit includes the insert, installation costs, liners and facing for the inserts so I will save about $1,000 bucks. The price of the insert is pretty good to begin with, about $500 below list. This is the Vermont Castings Montpelier non-catalytic wood insert.
I thought the fed energy efficiency tax credits extended to material costs only, and not labor. Are installation costs also allowable expenses to claim the tax credits? I was researching installing new windows, so maybe fireplaces and windows are different.
__________________
FUEGO is offline   Reply With Quote
Old 06-25-2009, 06:57 PM   #7
Moderator
Alan's Avatar
 
Join Date: Jul 2005
Location: Eee Bah Gum
Posts: 21,153
Quote:
Originally Posted by bank5 View Post
That brought me to schedule A (Form 1040), and then line 29 took me to the schedule A instructions - http://www.irs.gov/pub/irs-pdf/i1040sa.pdf

Page A-10 has the calculations. The phase out is pretty minimal. It seems like it's only about 2% of the income over the AGI limit.
That is not where the link takes me, it goes to publication 526. I saved a copy and attached it here.
Attached Files
File Type: pdf p526.pdf (1.20 MB, 1 views)
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Now it's adventure before dementia
Alan is online now   Reply With Quote
Old 06-25-2009, 08:56 PM   #8
Thinks s/he gets paid by the post
Helen's Avatar
 
Join Date: Oct 2004
Location: Portland
Posts: 1,358
Quote:
Originally Posted by FUEGO View Post
I thought the fed energy efficiency tax credits extended to material costs only, and not labor. Are installation costs also allowable expenses to claim the tax credits? I was researching installing new windows, so maybe fireplaces and windows are different.
Here's a quote from one article:

Installation costs ARE COVERED for:
  • HVAC (Heating, Ventilation and Air Conditioning) systems
  • Biomass Stoves
  • Water Heaters (including solar)
  • Solar Panels
  • Geothermal Heat Pumps
  • Wind Energy Systems
  • Fuel Cells
Installation costs are NOT covered by the tax credit for:
  • Windows
  • Doors
  • Insulation
  • Roofs
2009 Energy Tax Credit, Buyer Be Ware
__________________
Helen is offline   Reply With Quote
Old 06-26-2009, 10:46 AM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2007
Posts: 7,533
Quote:
Originally Posted by Helen View Post
Here's a quote from one article:

Installation costs ARE COVERED for:
  • HVAC (Heating, Ventilation and Air Conditioning) systems
  • Biomass Stoves
  • Water Heaters (including solar)
  • Solar Panels
  • Geothermal Heat Pumps
  • Wind Energy Systems
  • Fuel Cells
Installation costs are NOT covered by the tax credit for:
  • Windows
  • Doors
  • Insulation
  • Roofs
2009 Energy Tax Credit, Buyer Be Ware
That explains it, thanks. So generally, things that actively produce or consume energy in an efficient manner allow a credit for installation costs, and things that passively reduce loss of energy do not allow a credit for installation costs. Interesting distinction.
__________________
FUEGO is offline   Reply With Quote
Old 06-26-2009, 10:20 PM   #10
Thinks s/he gets paid by the post
Helen's Avatar
 
Join Date: Oct 2004
Location: Portland
Posts: 1,358
Quote:
Originally Posted by FUEGO View Post
That explains it, thanks. So generally, things that actively produce or consume energy in an efficient manner allow a credit for installation costs, and things that passively reduce loss of energy do not allow a credit for installation costs. Interesting distinction.
Well put. I hadn't caught the distinction.
__________________
Helen is offline   Reply With Quote
Old 06-27-2009, 01:11 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2007
Posts: 7,533
Quote:
Originally Posted by Helen View Post
Well put. I hadn't caught the distinction.
I didn't either until I read through the list. I knew some things included installation too (like PV arrays and wind), but not the whole list you posted. Good info.
__________________

__________________
FUEGO is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
A donut-hole in Tax Deductions/earnings? ERD50 FIRE and Money 8 02-05-2009 11:42 PM
Can you NOT take deductions on your tax return? summer2007 FIRE and Money 2 10-19-2007 11:50 PM
AGI and State Tax Refund jazz4cash FIRE and Money 12 02-14-2007 09:54 AM
2% of AGI - miscellaneous deductions maddythebeagle FIRE and Money 2 02-03-2006 03:32 PM
RV's and tax deductions cute fuzzy bunny Life after FIRE 2 01-09-2005 10:53 AM

 

 
All times are GMT -6. The time now is 02:46 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.