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bank5 06-24-2009 07:54 PM

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?

Alan 06-24-2009 08:26 PM

see page 13 for details on limits.

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

bank5 06-24-2009 08:55 PM

Quote:

Originally Posted by Alan (Post 829498)
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.

Helen 06-24-2009 10:09 PM

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.

ERD50 06-25-2009 08:31 AM

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

FUEGO 06-25-2009 09:33 AM

Quote:

Originally Posted by Helen (Post 829518)
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.

Alan 06-25-2009 05:57 PM

1 Attachment(s)
Quote:

Originally Posted by bank5 (Post 829507)
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.

Helen 06-25-2009 07:56 PM

Quote:

Originally Posted by FUEGO (Post 829639)
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

FUEGO 06-26-2009 09:46 AM

Quote:

Originally Posted by Helen (Post 829918)
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.

Helen 06-26-2009 09:20 PM

Quote:

Originally Posted by FUEGO (Post 830040)
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.

FUEGO 06-27-2009 12:11 PM

Quote:

Originally Posted by Helen (Post 830212)
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.


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