Archive for Tax Planning

Adjusted Gross Income (AGI)

For United States individual income tax, adjusted gross income (AGI) is total gross income minus specific reductions.[1] Taxable income is adjusted gross income minus allowances for personal exemptions and itemized deductions. For most individual tax purposes, AGI is more relevant than gross income.

Source: Wikipedia

Tax Filing adjusted gross incomeThese deductions reduce AGI.  Amounts deductible against gross income in arriving at adjusted gross income (AGI) are called “above-the-line” deductions.

  • Educators Expenses – Teachers’ Classroom Expenses
  • Business Expenses for Certain Employees
  • Health Savings Account Deduction
  • Moving Expenses
  • Self-Employment Tax
  • Self-Employed SEP, SIMPLE, and Qualified Plans
  • Self-Employed Health Insurance
  • Penalty on Early Withdrawal of Savings
  • Alimony Paid
  • IRA Deduction
  • Student Loan Interest
  • Tuition and Fees
  • Domestic Production Activities

Schedule A – Itemized Deductions

If the total of a taxpayers itemized deductions is greater than standard deduction for the applicable filing status, Schedule A should be used.

Here is a summary of deductions which are itemized on Schedule A

  • Medical and Dental Expenses
  • Taxes Paid
  • Interest Paid
  • Investment Interest Expense
  • Interest – Mortgages
  • Points – Mortgages
  • Other Mortgage Interest
  • Gifts to Charity
  • Casualty and Theft Losses
  • Job Expenses and Most Other Miscellaneous
  • Work-Related Education Expenses
  • Legal Fees

Tax credits that may affect your return

  • Additional Child Tax Credit
  • Adoption Credit
  • Alternative Motor Vehicle
  • Child and Dependent Care Credit
  • Child Tax Credit
  • Earned Income Credit
  • Education Tax Credit – American Opportunity
  • Education Tax Credit – Lifetime Learning
  • Elderly or Disabled
  • Federal Tax Paid on Fuels
  • First-Time Home Buyer Credit
  • Foreign Tax Credit
  • General Business Tax Credits
  • Health Coverage Tax Credit
  • New Hire Retention Credit
  • Personal Energy Property
  • Residential Energy Efficient Tax Credits
  • Retirement Saver’s Credit
  • Small Employer Health Insurance Credit

IRAs and Retirement Accounts

Taxpayers who make contributions to a retirement plan may reduce their tax liability and earn increased benefits when it is time to retire. RTR Accounting, Payroll & Tax Services is ready to help you with:

  • Traditional IRAs
  • Roth IRAs
  • SIMPLE IRA Plans
  • SEP Plans
  • 401(k) and 403 (b) Plans
  • Other Qualified Plans
  • Distributions
  • Rollovers
  • Beneficiaries
  • Small Business Plans
  • Correcting Plan Errors

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