Filing status for taxpayers who are married to each other or live together in a common law marriage and report their own incomes and deductions on separate returns. You are married and both you and your spouse agree to file a joint return. On a joint return, you report your combined income and deduct your combined allowable expenses.
Misc. Itemized deductions are a special category of itemized deductions that includes such expenses as professional dues, tax return preparation fees, job-hunting costs, unreimbursed employee business expenses, and certain investment expenses. Such expenses are deductible only to the extent they exceed 2 percent of adjusted gross income.
There are certain tax benefits when a person is considered permanently and totally disabled. This occurs if they are unable to engage in any substantial gainful activity due to a physical or mental impairment. In addition, this impairment must be one that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than 12 months. The taxpayer generally must provide the IRS a physician’s statement documenting this condition and be able to support it one audit.
The individual taxpayer can either itemize deductions or take the standard deduction. The standard deduction is a tax deduction that reduces the amount of income on which you are taxed. You cannot take the standard deduction if you claim itemized deductions. Your standard deduction consists of the basic standard deduction amount based on your filing status and additional standard deduction for different circumstances that a taxpayer might be under.
Limitations exist on the amount of the standard deduction of a taxpayer who is another taxpayer’s dependent.
Unearned income is income other than earned income. This is investment-type income is also referred to as just investment income. It generally includes interest, dividends, and capital gains. Distributions of interest, dividends, capital gains, and other unearned income from a trust are also unearned income to a beneficiary of the trust.
Withholding is the amount held back from your wages each payday to pay your income and Social Security taxes for the year. This money is deposited for the government. It will be credited against the employees’ tax liability when they file their returns. Employers withhold money for federal income taxes, federal social security taxes, and state and local income taxes in some states and localities.