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How will the OBBBA changes to charitable contributions affect my tax bill in the future?
Contributed by: JanaA, FreeTaxUSA Agent, Tax Pro In July 2025, President Trump signed the One Big Beautiful Bill Act (OBBBA), which includes significant changes to charitable contribution deductions, effective for tax years beginning after December 31, 2025. Here’s a look at the new changes and how they may affect your tax…
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What is IRA basis, and why is it important?
Contributed by: PhillipB, FreeTaxUSA Agent, Tax Pro Most people contribute money to traditional IRAs to help save them money on their tax return with the IRA deduction. If the contribution is deducted from income, all the money is taxable when it is withdrawn. Deducted IRA contributions have zero basis because the…
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What are nondeductible IRA contributions?
Contributed by: PhillipB, FreeTaxUSA Agent, Tax Pro Anyone can make contributions to a traditional IRA if they have compensation. Most commonly, compensation includes income from working a W-2 job or from self-employment, either as a sole proprietor or through a pass-through entity. There are a few other rare forms of…
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What do I need to know about retirement contributions for my taxes?
Contributed by: PhillipB, FreeTaxUSA Agent, Tax Pro There are several options to save for retirement, each with its own tax advantages and rules. Understanding how retirement contributions affect your taxes is important for saving money on taxes now and planning for lower taxes in retirement. Here are some of the most…
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What if I overcontribute to my Roth IRA?
Contributed by: LynR, FreeTaxUSA Agent, Tax Pro A Roth IRA can be a great investment vehicle for retirement savings. However, it’s important to know the rules for how much and when you can contribute to a Roth. Mistakes can always be fixed, but there may be penalties if they’re not corrected by the tax deadline. Common…
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How is the child tax credit affected in the One Big Beautiful Bill Act?
Contributed by: AndyS, FreeTaxUSA Agent, Tax Pro The One Big Beautiful Bill Act (OBBBA) passed this year and will introduce several tax law changes, affecting 2025 tax returns. One of these changes is the child tax credit (CTC). Many taxpayers with dependents find a lot of relief with the child tax credit on their tax…
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What constitutes cash vs noncash charitable contributions
Contributed by: KelliP, FreeTaxUSA Agent, Tax Pro Sometimes understanding the difference between a cash and noncash charitable contribution can be confusing. This article provides clarification. What is a charitable contribution? A charitable contribution is a donation. It’s donating gifts of money, tangible property, and…
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What should I know about the residential clean energy credit before I buy my solar panels?
Contributed by: JanaA, FreeTaxUSA Agent, Tax Pro What is the energy credit? The residential clean energy credit is a tax credit that allows you to deduct a percentage of the cost of installing qualifying solar energy systems. This credit is applied to your federal tax liability to reduce your tax amount due. Credit amount…
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Can I get a deduction or credit on my tax return for college, private school or homeschool expenses?
Contributed by: AndyS, FreeTaxUSA Agent, Tax Pro Expenses for schooling can add up, especially when it’s not public K-12 schooling, which is subsidized by county taxes. When it comes to filing your tax return, it would be nice to be able to get a deduction or credit for some of those out-of-pocket expenses. But is it…
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What are 401(k) limits for highly compensated employees (HCE)?
Contributed by: TriciaD, FreeTaxUSA Agent, Tax Pro A 401(k) plan allows employees to save part of their wages for retirement with benefits like tax-deferred growth and employer matching contributions. Annual contributions to a 401(k) plan are limited. Highly compensated employees (HCEs) are subject to certain rules…