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Why is my mortgage interest deduction limited?
Contributed by: Henry, FreeTaxUSA Agent, Tax Pro The IRS allows homeowners to claim a mortgage interest deduction for mortgage interest and points paid on a loan secured by your home, whether it’s your main home or a second home. However, to prevent disproportionately benefiting higher-income homeowners, the IRS has set…
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Are my car loan interest payments deductible?
Contributed by: KristineS, FreeTaxUSA Agent, Tax Pro With the signing of the One Big Beautiful Bill Act into law, you may be wondering if your car loan interest is now deductible, or you may have heard there’s no tax to pay on car loan interest. In this article we’ll cover all you need to know to see if you qualify for the…
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How do scholarships and grants affect your ability to claim an education credit?
Contributed by: Henry, FreeTaxUSA Agent, Tax Pro Paying for higher education can be expensive, so any financial assistance is helpful. Scholarships and grants are invaluable resources that can reduce the cost of tuition and other educational expenses. Additionally, education credits, such as the American Opportunity Tax…
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My house burned down. May I deduct the disaster loss on my taxes?
Contributed by: MatthewD, FreeTaxUSA Agent, Tax Pro A disaster loss is when something unexpected happens and you lose a personal item like a car, home, shed, barn, or other things with value. For example, you have a barn on your property that burns down when a severe storm comes through your area and the barn is struck by…
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What is the difference between a refundable and nonrefundable tax credit?
Contributed by: MatthewD, FreeTaxUSA Agent, Tax Pro To save energy costs, you did some upgrades to your house this year by upgrading your air conditioner, windows, and doors. When you filed your return, you applied for an energy-efficient home improvement credit. However, you didn't see a significant refund and wondered…
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Why can’t I get all the child tax credit in my refund?
Contributed by: PhillipB, FreeTaxUSA Agent, Tax Pro You may remember during the pandemic getting a massive $3,000 to $3,600 per child refundable child tax credit that was paid throughout the year – that was nice, wasn’t it? However, now you may be wondering why you never see anywhere near the $2,000 per child tax credit in…
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What if my mortgage was refinanced or sold to another lender, and I have two 1098 forms for the same mortgage?
Contributed by: Henry, FreeTaxUSA Agent, Tax Pro The FreeTaxUSA software is limiting your mortgage interest deduction because the two 1098 forms you’ve entered show combined balances over $750,000. This doesn’t seem right! How can you claim the maximum deduction? Don’t worry; we’re here to help. Let’s start by looking at…
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What is an SEP plan and how do I calculate my limits and enter it in FreeTaxUSA?
Contributed by: CoryF, FreeTaxUSA Agent, Tax Pro Please consult a financial institution for set-up instructions for your business SEP. They can provide a detailed discussion on this complex subject. Simplified Employee Pension explanation What options are available to save for my retirement when I am self-employed? The…
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Backdoor Roth Plus a Recharacterization – Basic Scenario (2024 and later)
Contributed by: RachelR, FreeTaxUSA Agent, Tax Pro and Henry, FreeTaxUSA Agent, Tax Pro This article applies to 2024 and later years Here are the steps for entering a backdoor Roth including a recharacterization. First: Add the 1099-R for the Roth to traditional recharacterization When your recharacterization from…
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Backdoor Roth Plus a Recharacterization – Recharacterization Happens After December 31st (2024 and later)
Contributed by: RachelR, FreeTaxUSA Agent, Tax Pro and Henry, FreeTaxUSA Agent, Tax Pro This article applies to 2024 and later years Sometimes you don’t complete the recharacterization until the tax year is already over. Here’s an example: You made a Roth IRA contribution for 2024 during the 2024 tax year. You don’t…