If you have tax questions – Benton’s H & R Block has the answers

Staff Report

Regardless if you have a question or if you’re ready to file your taxes Benton’s H & R Block is your one-stop location for all your tax preparation needs. H & R Block can provide you guidance in making the decisions that go along with annual tax preparation.

Laurie Smith is one of the longtime employees at the Benton H & R Block. In all H & R Block employees have more than 140 years experience in tax preparation.

Some commonly asked and important questions are:

Should I itemize or use the standard deduction?

It depends. Choose the method that results in the largest deduction for you.

The value of your itemized deductions might be more than the amount you’ll receive as a standard deduction. If so, you should probably itemize. If you’re subject to Alternative Minimum Tax (AMT), you might want to itemize even if the standard deduction is more.

Otherwise, it’s usually better to claim the standard deduction. Don’t forget to take the state’s tax results into consideration when making your choice.

Which homeowner deductions are available this year?

Some deductions available for homeowners include:

• Mortgage interest deduction
• Real property tax deduction
• Mortgage insurance deduction

Each deduction requires you to pass certain tests. Review each deduction to ensure you qualify for it.

You might make improvements to your home to increase energy efficiency. If so, you might qualify for an additional credit.

If I claim the standard deduction, should I also report my itemized expenses and donations?

Yes. You should tell us your itemized deductions, including donations to charitable organizations. This helps determine if the standard deduction is the most beneficial to you.

You should also keep a record of your itemized deductions. You can carry over deductions to future years if your adjusted gross income (AGI) isn’t high enough use the whole amount this year.

Which items qualify as other itemized deductions?

Other itemized deductions that you can claim include:

• Gambling losses, but only to the extent of gambling winnings reported on Form 1040
• Casualty and theft losses of income-producing property from Form 4684 or Form 4797
• Loss from other activities from Schedule K-1 (Form 1065-B)
• Federal estate tax on income in respect of a decedent
• Amortizable bond premium on bonds acquired before Oct. 23, 1986
• Deduction for repayment of amounts under a claim of right if over $3,000
• Certain unrecovered investment in a pension
• Impairment-related work expenses of disabled person

How does depreciation affect itemizing deductions?

Depreciation shouldn’t affect your itemized deductions if you’re either of these:

• Sole proprietor
• Farmer

This applies whether you itemize on Schedule A or claim the standard deduction.

If you’re a sole proprietor, report your depreciation deduction as a trade or business expense. Report it on your Schedule C.

If you’re a farmer, use Schedule F.

You’ll claim depreciation as an itemized deduction if both of these apply:

• You’re an employee.
• You’re claiming depreciation as an unreimbursed employee business expense.

You’ll use Schedule A to itemize. Your depreciation deduction is subject to the 2% of adjusted gross income (AGI) limit. So, use depreciation when deciding whether to itemize or claim the standard deduction.

Benton’s H & R Block, located at 101 West Main St., is ready to help you with your taxes regardless if you have questions or if you’re ready to file. Office hours are 9 a.m. to 6 p.m. Monday through Friday and 9 a.m. to 5 p.m. on Saturday. Call the office at 618-439-4641.