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More of your tax questions answered




The Internal Revenue Service started accepting tax returns this week.
The Internal Revenue Service started accepting tax returns this week.
Photo by 401(K) 2012 via Flickr Creative Commons

The new tax plan Congress passed late last year has brought a lot of changes -- and confusion. Take Two took to the streets this week to find out what questions people are having, and TaxMama Eva Rosenberg had these answers:

"Can you deduct your property tax now, or is that officially over?" -- Christophe Piallat

Yes. Rosenberg said to remember that this year nothing has changed. Next year, when the new plan kicks in, you can deduct a combination of property tax, DMV fees and either state income tax or sales taxes up to a total of $10,000.

"Under the new tax situation, am I going to still be itemizing my taxes? I'm within $200 of the new standard deductions and I'm wondering if it's really worth it to save all those receipts and do all that itemization." -- Sally Alexander

Rosenberg suggested that if you want to be safe, rather than save all that paper, you can scan your receipts and save them digitally. You never know what the year will bring for your life or the tax code.

"Can you teach me how to do my own taxes since I didn't learn how to do them in school and I would like to learn how to do it myself finally? -- Kevin Hawkins

One of the best ways to learn how to do your taxes, according to Rosenberg, is the VITA training course from the IRS. It's available on the IRS website and best of all it's free. In general, she said, many tax returns should be simple enough to use online tax software. But if you have complex issues or need help, this is a good year to work with a tax professional, preferably an Enrolled Agent or CPA. You can find Enrolled Agents at NAEA's website and CPAs are listed on the AICPA's website.

"How do write-offs work if you’re in the lowest tax bracket? I have specifically a few write-offs for various film projects and I’m not sure if I’m able to benefit from those write-offs from previous years because I’m in the lowest tax bracket." -- Patrick Ross

Rosenberg said if you are in business, you’ll file a Schedule C. Most of your deductions will take place there. However, if you just have expenses and no income, that’s one of those provisions in the Tax Extender Act that expired in 2016. So stand by; those provisions are likely to be reinstated. So put your tax return on extension.

There are actually several tax breaks that expired in 2016, like tuition and fees deductions, all the energy credits like solar and vehicle. Rosenberg suggests if you aren't in a hurry to get your return, consider putting your tax return on extension if you want these tax benefits.  

"From what I understand we get fewer deductions in California than the rest of the United States just based on our higher level cost of living and the things that we usually can deduct. There’s limits now, but I think it’s changed so many times that the last iteration that did get passed, I’m not completely sure what actually went into the plan, so that’s a question I have." -- Annie Wang

Remember, whatever we can or cannot deduct on the IRS Form 1040, we still get all our usual deductions on the California tax return, Rosenberg said. The California tax return doesn't allow deductions for state income taxes, but it has no limit on deductions for property taxes, DMV or sales taxes.