Question

Your client, Sadie Merriweather, is struggling to understand the changes in the tax law. She would like you to explain the changes to itemized deductions and personal exemptions, her personal information is as follows:

Charitable Contributions	$1,000
Mortgage Interest	$7,300
Property Taxes	$3,500
State Income Tax Paid in 2019	$15,000
Safety Deposit Rental Fee	$500
Tax Preparation Fees	$750
Medical Expenses	$3,000

Sadie has two children ages 10 & 14 and files as Head of Household. Her only source of income is W-2 wages of $100,000. She has itemized on her prior tax filings and she would like to understand whether she will itemize this year or take the standard deduction. Also, she would like to understand what tax benefits are available by claiming her children as dependents.

Answer 1

Charitable Contributions can be allwed as itemized but not personal.Mortgage Interest can be taken as itmized only if you bought home before Dec 15 2017.Property Taxes are allowed as personal only. It will not be consdered as Itemized deductions.State Income Tax if its upto $10000 then olny allowed under itemized .Safety Deposit Rental Fee it is allowed under personal.Tax Preparation Fees are allowed under both the cases.Medical Expenses are subject to 10% of AGI in case of itemized.

by observing the above standard deduction gives more benefit to her than itemized deduction.

For childers she will get childern dependednt credit for both of them since the age of the both childers is less than 17

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