Taxes and deductions?

Question

I live with my girlfriend and we rent our home. I am not a student. What are the best ways to do my taxes to get the most money back as possible. I need to have enough deductions to get over the standard deduction is what I'm assuming. I do pay about 2000 dollars a year into my health care but I'm wondering also if I can deduct the rent paid at home. Any tax guru's input on how to get a nice return would sure be appriciated. Thanks much.

Answer 1

Correction to the post above me.

Only one taxpayer may claim the child as a qualifying child for purposes of filing as head of household. Also, a taxpayer filing as head of household must furnish over half the cost of maintaining the household. Therefore, both parents may not file as head of household. For more information, please refer to Publication 501, Exemptions, Standard Deduction, and Filing Information, for more information.

Im an accountant and the standard deduction is in your future unless your wealthy enough to donate more than the standard (head of household, $7550) (single, $5150) however, since your asking how to get the most money back from taxes I doubt that is the case. Without any other information I would suggest one of you file Head of Household and the other file Single using the standard deduction.

Answer 2

In order to file as Married filing Jointly you must be legally married on December 31st. If not married you are both single unless there is a child in which case one of you could file as head of household.
Since you are renting you probably can't itemize deductions as rent is not a deductible item unless part of the space is used exclusively as a required home office for business.
You could get over the standard deduction by contributing to charity but this might not be the best use of your money. If you are in the top tax bracket you would save 35 cents on each dollar given in taxes but you would be out of pocket the other 65 cents.
If I were you I would be more concerned about not paying in more withholding than I have to so that I get more take home pay to invest.

Answer 3

Medical premiums and any other medical expenses can be deducted if you itemize, but only the amount that's more than 7.5% of your income, so if you made $30,000 and paid $2000 in medical, you couldn't deduct any of it. If you itemize, you can also deduct state and local taxes paid, and a number of other items. Download the instructions for 1040 Schedule A from irs.gov for more info on what you can deduct. It might be hard to come up with more than the standard deduction.

No, you can't deduct your rent at the federal level. Some states have rebate programs for rent, but they're often strictly limited based on age and income. You can check your state laws for that. In Pennslvania, for example, you have to be 65, or disabled or widowed, and income limit last year was $15,000.

If you don't have dependents or own a home or go to school, there's probably not a lot available to you to minimize your taxes.

And the things I Know, I Know states above are not correct, so don't follow that wrong advice.

Answer 4

To correct the person that said married filing joint is not benefical, it is. Married filing seperate loses alot of credits. Not to mention, if one person itemizes, the other must do the same and it must be more than their standard deduction amount or they get 0 as their standard deduction.
Being as you and your girlfriend are not married, unless you live in a common law state, you MUST file single. The 7.5 percent of medical is true, but must be paid for with after tax dollars. If you keep a record of how many copays on drs visits and prescriptions that YOU pay, those can be added in to medical expenses as well. As far as rent goes, call one of the local tax prep offices and ask them if you can claim rent on your state taxes. I live in Indiana. Here you can claim up to 1500 dollars in rent. If your girlfriend did not work or had very little income, you COULD POSSIBLY claim her on your taxes as a qualifying relative or qualifying other. That would give you another personal exemption. If she made over 3300 dollars though, then she has to file and you cannot claim her.

Answer 5

Rent - No Deduction
Health Insurance - No Deduction if it comes out of your paycheck "pre-tax". Most are "pre-tax".

Generally, without owning a home it is next to impossible to get over the standard deduction. The only exceptions I have seen are usually elderly people with low income and high medical bills.

Ignore the post above. You can not file as "Married" if you are not legally married and rent is not deductable.

Answer 6

No deduction for rent,but if you were buying a home,you could deduct the interest.
You can deduct any medical insurance premiums you pay including what you pay in you auto insurance during the year.
Any medical bills you pay,hospital,doctor,dentist even if you paid it for your girlfriend,prescriptions not covered by insurance,prescription co-pay,union dues,uniform cleaning,trade publications,real estate taxes,property taxes,retirement fund (401K),childcare,eldercare if you are supporting someone like your parent(s).
Check the IRS publications or website.

Answer 7

You have to file single which is taxed at the highest rate. Rent is NOT deductible and insurance is only partially deductible if you are self employed or pay for it after taxes are taken from your check. Your only hope..... either get married or have children before december 31.

Answer 8

First off, it's very very rare that filing married is actually beneficial if both people work. It's only an advantage to file married if one spouse does not work. So if both you and your girl friend work, you are actually at a tax advantage to stay single. If the millions of married couples that have both spouses working actually knew the hundreds of $$$ they could be getting back on taxes for being single or head of household, I'm sure there would be a lot more justification for a divorce. If one of you does not plan to work, then get married and take advantage of the married tax laws (I'm not sure what "I know I know" was trying to say, she must be a stay at home mom.)

Anyways to answer your question, there is no federal benefits for paying rent. In the state of CA, CA state does give you a credit for renting a home in CA, but you must be below a certain financial thresh hold. In short renting offers no Federal Tax benefit, but you may have a state deduction you can take.

While it's true that your Medical Insurance payments, which may be pre-tax is not deductable, any medical payments you've made to doctors (including co-pays, payments for prescription medicines are deductable) You must meet a certain threshhold again, and for most people, it's out of reach, but if you've had some major surgeries, birth of a child. Many of the hospital expenses can be deducted on a Schedule A if it's money you had to pay for medical reasons that the insurance did not cover.
You need to keep receipts for all this.

Other ways to reduce your tax liability:
1. Put money away into a 401K at work.
2. Deposit money into an IRA
3. Place as much of the liability on one person if possible. If you and your girl friend have a child, one of you can file head of household (bigger standard tax deduction and possible EIC credit). If you have 2 children. Split the children up. (I know sad, but that's our tax laws). File head of household for each of you. Each claiming one child. (You'll have to do the work to place both children on one spouse and work the numbers, but typically you'll benefit more if each person claims one child apiece)
4. Anything you're not using, donate to the Salvation Army or GoodWill. Get a tax deduction receipt. You can write off a few hundred dollars off your income on a Schedule A if you itemize.
5. Again if you itemize, anything you pay taxes on can be itemized, this includes car tax, again Schedule A.

Note to brenden b, If you have 2 children and each parent is caring for one child a piece, why can both parents not file head of household? Mother+child = Head of house hold, Father + child = head of household. I agree if you only have one child, you can't both file head of household, but there is a greater tax advantage of each filing head of household rather than Mother+2children = Head of household, Father = Single, or Mother = single and Father + 2 children filing head of household.

Note to mexlover8, I never said filing Married and separate was better than Married. However being DIVORCED and if both spouses are working filing SINGLE each can have huge tax advantages over filing married.
My wife and I each own a house before we got married. Each itemized our deductions. We lost about 20K in itemized deductions when we got married because in marriage you can only claim deductions on one house. THAT's HUGE! Imaging being taxed on 20K more we're taxed on. I agree the worst filing status is Married filing separately. The government doesn't want married people to file separately. The government also doesn't want successful single people to get married either.

Answer 9

I know in Michigan there is a credit for renters. Look up your state laws.

Answer 10

I recommend filing as a married couple. You dont really have to be legally married to do this. Anytime you file together, it's better than filing as an individual. You can claim rent, and medical. Good luck! Keep all your receipts.