{"id":44770,"date":"2019-03-21T20:30:26","date_gmt":"2019-03-22T01:30:26","guid":{"rendered":"https:\/\/www.hrblock.com\/tax-center\/?p=44770"},"modified":"2021-08-16T16:01:48","modified_gmt":"2021-08-16T21:01:48","slug":"real-questions-from-our-reddit-ask-me-anything-deductions","status":"publish","type":"post","link":"https:\/\/www.hrblock.com\/tax-center\/lifestyle\/tax-tips\/real-questions-from-our-reddit-ask-me-anything-deductions\/","title":{"rendered":"Real Questions from our Reddit Ask Me Anything \u2013 Deductions"},"content":{"rendered":"

Editor\u2019s Note: In mid-January, we hosted a Reddit Ask Me Anything (AMA) with Andy, a director in The Tax Institute at H&R Block. Reddit is a community-based website with over a million topic forums and AMAs are places for people to ask anything to an expert on a topic. Andy answered some of the Internet\u2019s most burning tax questions, ranging from tax reform to student loans, marriage, freelance work, and more. This is the third post in a four-part series. Check out the bottom of this post for links to our other Reddit AMA posts. <\/em><\/p>\n

Have a question about deductions? How does the changes to the standard deduction impact you? Have you recently paid off your student loans? Check out a few of Andy’s answers about deductions.<\/p>\n

Mortgages<\/strong><\/h2>\n

Q:\u00a0 How can I determine the value of the mortgage interest deduction?<\/strong><\/p>\n

A:\u00a0 That one is tough to answer in a vacuum. It depends upon many factors, like are you itemizing your deductions, how much income you have, what\u2019s your filing status. To answer this one accurately, you really need to prepare your return to see the result.<\/p>\n

Changes on Deductions from Last Year <\/strong><\/h2>\n

Q:\u00a0 Should I file EZ or Itemized?<\/strong><\/p>\n

A: New year, new forms. Tax changes have gotten rid of the 1040EZ to make things \u2018EZier\u2019 for taxpayers with one version of Form 1040.<\/p>\n

If your itemized deductions are more than the standard deduction, then it makes sense to itemize. But remember, the standard deduction has nearly doubled, so think twice before defaulting to itemizing.<\/p>\n

Q: If you could point out the most significant change to tax laws for this year, what would it be?\u00a0<\/strong><\/p>\n

A: Tax law changes have been on everyone\u2019s mind lately. The tax changes impacting most of us are standard deductions and child tax credits.<\/p>\n

Standard deductions have nearly doubled and if you\u2019ve got kids- they\u2019re now little bundles of tax credit joy, as child tax credits have also increased in amount and become available to higher income taxpayers.<\/p>\n

LLC and Businesses <\/strong><\/h2>\n

Q:\u00a0 I have an LLC on which I declare very minimal losses every year (rent, phone bill, restaurant meals, etc.) Should I keep the LLC alive or just do this work under my own name<\/strong><\/p>\n

A: You\u2019ll most likely be taxed the same way, even if you get rid of your LLC, because you\u2019ll still be a passthrough entity. However, you may want to review non-tax considerations, like the legal protection provided by an LLC, before making any changes.<\/p>\n

Q:\u00a0 Can I itemize use of my hot tub as a percentage of my rent. Isn\u2019t it a business expense if I do work there as well as my home office?<\/strong><\/p>\n

A:\u00a0 Nice try. No.<\/p>\n

Student Loans<\/strong><\/h2>\n

Q:\u00a0 I made less than 12k last year and they already take all of my refunds for student loans. What\u2019s my incentive to file?<\/strong><\/p>\n

A:\u00a0 Even if you do not owe or may not be getting money back, the IRS still requires you to file if you meet the filing requirements. If you want to stay compliant, you\u2019ve got to file every year that it\u2019s required. Plus, remember that each time they keep your refund, that money is reducing your outstanding student loan balance.<\/p>\n

Q:\u00a0 Is the interest on student loan 1098 I’m going to deduct equal to the exact amount of money I should get? Why or why not?<\/strong><\/p>\n

A:\u00a0 Because student loan interest is claimed as a deduction, you will only receive a tax benefit equal to a percentage of the amount you deduct. For example, if you are in the 10% tax bracket and deduct $2,000 worth of interest, your potential tax refund will only be increased by $200 by the deduction.<\/p>\n

Q:\u00a0 I paid off a private student loan this past year. Can I deduct that from my taxes this year?<\/strong><\/p>\n

A:\u00a0 Congratulations! If I paid off my student loan, I\u2019d throw a college-style party I wouldn\u2019t remember the next day.<\/p>\n

But, what I would be sure to remember is that the interest paid last year may be tax deductible (up to $2,500), but the principal unfortunately is not.<\/p>\n","protected":false},"excerpt":{"rendered":"

Editor\u2019s Note: In mid-January, we hosted a Reddit Ask Me Anything (AMA) with Andy, a director in The Tax Institute at H&R Block. Reddit is a community-based website with over a million topic forums and AMAs are places for people to ask anything to an expert on a topic. Andy answered some of the Internet\u2019s […]<\/p>\n","protected":false},"author":641,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[26,4784],"tags":[],"class_list":["post-44770","post","type-post","status-publish","format-standard","hentry","category-lifestyle","category-tax-tips"],"acf":[],"yoast_head":"Real Questions from our Reddit Ask Me Anything \u2013 Deductions | H&R Block<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.hrblock.com\/tax-center\/lifestyle\/tax-tips\/real-questions-from-our-reddit-ask-me-anything-deductions\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Real Questions from our Reddit Ask Me Anything \u2013 Deductions\" \/>\n<meta property=\"og:description\" content=\"Editor\u2019s Note: In mid-January, we hosted a Reddit Ask Me Anything (AMA) with Andy, a director in The Tax Institute at H&R Block. 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