Types of Deductions

The types of deductions you can take depend a lot on your life situation. It’s likely you won’t need all of the records listed below for your tax documents checklist.

 Home Ownership
o Forms 1098 or other mortgage interest statements
o Real estate and personal property tax records
o Receipts for energy-saving home improvements (e.g., solar panels, solar water heater)
o All other 1098 series forms

 Charitable Donations
o Cash amounts donated to houses of worship, schools, other charitable organizations
o Records of non-cash charitable donations
o Amounts of miles driven for charitable or medical purposes

 Medical Expenses
o Amounts paid for healthcare insurance and to doctors, dentists, hospitals

 Health Insurance
o Form 1095-A if you enrolled in an insurance plan through the Marketplace (Exchange)

 Childcare Expenses
o Fees paid to a licensed day care center or family day care for care of an infant or preschooler
o Wages paid to a baby-sitter

Don't include expenses paid through a flexible spending account at work

 Educational Expenses
o Forms 1098-T from educational institutions
o Receipts that itemize qualified educational expenses
o Records of any scholarships or fellowships you received
o Form 1098-E if you paid student loan interest

 K-12 Educator Expenses
o Receipts for classroom expenses (for educators in grades K-12)
• State & Local Taxes
o Amount of state/local income tax paid (other than wage withholding), or amount of state and local sales tax paid
o Invoice showing amount of vehicle sales tax paid

 Retirement & Other Savings
o Form 5498-SA showing HSA contributions
o Form 5498 showing IRA contributions
o All other 5498 series forms (5498-QA, 5498-ESA)

 Federally Declared Disaster
o City/county you lived/worked/had property in
o Records to support property losses (appraisal, clean up costs, etc.)
o Records of rebuilding/repair costs
o Insurance reimbursements/claims to be paid
o FEMA assistance information
o Check FEMA site to see if my county has been declared a federal disaster area

Individual Tax Problem Resolution

If you received an IRS notice in the mail and did not know what to do. Do not hesitate to call MGMZ to get your IRS related issue resolved. Our team will contact the IRS directly to negotiate a solution to your tax problem

• Tax Calculation and Tax estimation

How Do I Calculate My Income Tax Refund?
Many taxpayers in the U.S. have come to expect a sizable refund check every tax season. To some people who don’t prepare their own tax returns, it’s a mystery how the refund is calculated.
The idea is really quite simple. After calculating your taxable income, you use the information in the tax tables to determine your total income tax for the year. This amount is then compared to the amount that you actually paid throughout the year (in the form of withholdings from your paychecks). If the amount you paid is more than your tax, you are entitled to a refund for the difference. If the amount you paid is less than your tax, it’s time to get out the checkbook.

Withholding: Why It’s Done
If you work as an employee, you’re certainly aware that a large portion of your wages/salary doesn’t actually show up in your paycheck every two weeks. Instead, it gets “withheld.”
The reason for this withholding is that the federal government wants to be absolutely sure that its gets its money. The government knows that many people have a tendency to spend literally all of the income they receive (if not more). As a result, the government set up the system so that it would get its share before taxpayers would have a chance to spend it.
The amount of your pay that gets withheld is based upon an estimate of how much tax you’ll be responsible for paying over the course of the year. (This is why you are required to fill out Form W-4, providing your employer with some tax-related information, when you start a new job.)

Withholding: How It’s Calculated
At this point you may be thinking, “OK. Well I just learned that I’m in the __% tax bracket, and it’s obvious that my employer is withholding way more than that!”
You’re probably right. That’s because your employer isn’t just withholding for federal income tax. They’re also withholding for Social Security tax, Medicare tax, and (likely) state income tax.
The Social Security tax is calculated as 6.2% of your earnings, and the Medicare tax is calculated as 1.45% of your earnings. Before you’ve even begun to pay your income taxes, 7.65% of your income has been withheld.
Your refund is determined by comparing your total income tax to the amount that was withheld for federal income tax. Assuming that the amount withheld for federal income tax was greater than your income tax for the year, you will receive a refund for the difference.
EXAMPLE: MGMZ total taxable income (after subtracting deductions) is $32,000. He is single. Using the tax table for single taxpayers, we can determine that his federal income tax is $3,646.
Over the course of the year, MGMZ employer withheld a total of $8,500 from his pay, of which $4,000 went toward federal income tax. His refund will be $354 (i.e., $4,000 minus $3,646).
Simple Summary

 Every year, your refund is calculated as the amount withheld for federal income tax, minus your total federal income tax for the year.

 A large portion of the money being withheld from each of your paychecks does not actually go toward federal income tax. Instead, it goes to pay the Social Security tax, the Medicare tax, and possibly state income tax