WEBVTT - Tax Tips, Credits, and Deductions #053 0:00:00.080 --> 0:00:02.960 Welcome to how to Money. I'm Joel and I am 0:00:03.040 --> 0:00:07.119 Matt's and today we're discussing tax, tips, credits and deductions. 0:00:26.239 --> 0:00:28.280 Ay Jeel, I wanted to share with you it's speaking 0:00:28.280 --> 0:00:33.040 of the year still sort of. It's January accurate, and 0:00:33.400 --> 0:00:35.440 we kicked it off this year man with some new 0:00:35.520 --> 0:00:38.120 internet service I'm talking about. Did you save some money 0:00:38.120 --> 0:00:41.200 by switching? Dude? Yeah, So I had been totally slack 0:00:41.280 --> 0:00:44.199 and we had been with Exfinity for close to a 0:00:44.280 --> 0:00:46.800 year now at a non promotional rate because you know, 0:00:46.800 --> 0:00:49.360 the promotional rate expired and we've been busy with life 0:00:49.520 --> 0:00:51.840 and dude, I didn't get to that for a whole year. 0:00:52.600 --> 0:00:55.840 That is like the complete opposite of me. So it 0:00:55.880 --> 0:00:57.600 was all my radar. But finally I was I was like, 0:00:57.600 --> 0:01:01.440 I can't keep paying seventy bucks for crappy internet, which 0:01:01.440 --> 0:01:03.200 is what I was doing. Dude, We're paying seventy bucks 0:01:03.400 --> 0:01:06.320 a month for thirty megabits per second and a t 0:01:06.480 --> 0:01:08.920 T had this deal going around and it was forty 0:01:08.920 --> 0:01:11.920 bucks for three d megabits per second. That's a little 0:01:11.920 --> 0:01:14.160 bit faster. It's way more than a little bit faster, 0:01:14.240 --> 0:01:16.560 and a good bit cheaper. Dude, it is amazing and 0:01:16.600 --> 0:01:20.240 what's crazy? And this is a little throwback to the 0:01:20.319 --> 0:01:23.680 episode eighteen where we had talked about the art of 0:01:23.720 --> 0:01:27.720 asking for a discount. But man, I contacted Comcast or 0:01:27.720 --> 0:01:31.560 Exfinity whatever twice to see if I could negotiate, and 0:01:31.959 --> 0:01:34.760 I was willing to walk away, and they wouldn't budge 0:01:34.959 --> 0:01:37.200 at all. Isn't that crazy? You had to do what 0:01:37.240 --> 0:01:38.920 you had to do, man, you gotta move on. Well, 0:01:38.959 --> 0:01:40.800 So the first time I was just expecting them to 0:01:41.160 --> 0:01:43.760 cave a little bit because I thought, okay, fifteen twenty 0:01:43.840 --> 0:01:46.360 megabits per second, it's fine. If I can just get 0:01:46.400 --> 0:01:48.960 the rate lowered down to forty, that's the easiest, and 0:01:49.080 --> 0:01:50.160 I don't I don't have to worry about it. I 0:01:50.200 --> 0:01:53.520 just didn't want my life disrupted. But they were like, no, sorry. 0:01:53.760 --> 0:01:55.240 So then I had to call up a T and 0:01:55.280 --> 0:01:57.400 T and actually get it scheduled and take advantage of 0:01:57.400 --> 0:01:59.520 that deal. And then I call it a Comcast back 0:01:59.560 --> 0:02:02.640 again and again try to get them down and they 0:02:02.680 --> 0:02:05.160 weren't budging. Man, I could not believe it. Word otherwise 0:02:05.200 --> 0:02:08.239 to anybody out there who hasn't shopped their their Internet bill, 0:02:08.480 --> 0:02:10.640 is really honestly like it can be a pain and 0:02:10.760 --> 0:02:13.200 your current provider can't say no, but pit them against 0:02:13.240 --> 0:02:16.880 each other. And also consider using Twitter, because Twitter can 0:02:16.880 --> 0:02:19.360 be a great place to find the customer support person 0:02:19.400 --> 0:02:21.440 who can actually make a difference. Sometimes if you just 0:02:21.480 --> 0:02:23.840 call the regular one eight hundred number, you're getting told 0:02:23.840 --> 0:02:26.160 no constantly. And I think Twitter is just a good 0:02:26.160 --> 0:02:28.720 place for you to go to potentially get some actual 0:02:28.720 --> 0:02:30.840 customer service and someone that can actually give you a 0:02:30.840 --> 0:02:34.680 lower rate. Well, that's true, I didn't do that next time. Well, 0:02:34.680 --> 0:02:36.080 the thing is, dude, I was just fed up with it, 0:02:36.120 --> 0:02:37.520 you know, and so I was like, forget this. I 0:02:37.520 --> 0:02:41.680 feel like twitters for the birds. Gonna call them up, literally, asked, Yeah, asked. 0:02:42.600 --> 0:02:45.280 I asked for the customer retention department. They transferred me over, 0:02:46.000 --> 0:02:48.600 And honestly, I'm just happier now that I'm giving my 0:02:48.639 --> 0:02:51.359 money to a t and t um and dude and 0:02:51.400 --> 0:02:53.040 the dude that came up, and then they'll do something 0:02:53.080 --> 0:02:55.320 to to make you mad and you'll switch back, exactly. 0:02:55.400 --> 0:02:57.160 It's like the circle of life. It never ends, the 0:02:57.200 --> 0:02:59.720 circle of Internet providers. Well, and the guy that came 0:02:59.760 --> 0:03:03.040 out and actually did the install was so incredibly awesome. Man, 0:03:03.200 --> 0:03:04.680 he stood there and talked through it with me and 0:03:04.680 --> 0:03:07.640 explained to me how like the dual band networks were. Okay, 0:03:07.680 --> 0:03:10.040 so here's a little internet primary for everybody. The five 0:03:10.040 --> 0:03:13.120 giga hurst band is faster, like that's a three megabits 0:03:13.160 --> 0:03:16.000 per second band, but it's doesn't have as far of 0:03:16.080 --> 0:03:18.079 a reach. That's how it was explained to me at least. 0:03:18.080 --> 0:03:20.240 So if you're hard wired in, if you're hard wired in, 0:03:20.400 --> 0:03:23.760 or if you're near you're wireless router, it's awesome. However, 0:03:23.800 --> 0:03:26.040 beyond a certain range, it switches to the old school 0:03:26.040 --> 0:03:28.840 two point four, which is the slower Internet that's typically 0:03:28.919 --> 0:03:31.400 like the thirty megabits per second coverage, right, And so 0:03:31.520 --> 0:03:33.519 if you're on the other side of your house, that's 0:03:33.560 --> 0:03:35.480 probably the network that you're getting, right, And it's the 0:03:35.520 --> 0:03:39.080 same network, and it just automatically switches on your modem. Yeah, 0:03:39.080 --> 0:03:41.560 and there. Now you've just got three intern sixty dollars 0:03:41.640 --> 0:03:43.880 extra in your pocket every year. There's so many more 0:03:43.880 --> 0:03:45.960 things that you can either spend that on or you 0:03:45.960 --> 0:03:49.320 can save that money. Yeah, man, that's awesome because actually 0:03:49.360 --> 0:03:51.840 to get something a better service in your life and 0:03:51.880 --> 0:03:54.240 to save money, that's that's awesome. That's to win win, Yeah, 0:03:54.240 --> 0:03:55.760 where I could even take my wife on a fancy 0:03:55.760 --> 0:03:59.560 little trip. There we go like I just did with Emily. 0:03:59.720 --> 0:04:01.480 But so we run at a hotel for a couple 0:04:01.520 --> 0:04:03.760 of nights and just had a great time just connecting. 0:04:03.800 --> 0:04:05.960 And with young kids, it can be hard to get 0:04:06.000 --> 0:04:07.880 that connection time with your wife, and so we had 0:04:07.920 --> 0:04:10.520 a great little trip together. And I wanted to run 0:04:10.560 --> 0:04:13.560 by Matt a frugal verse cheap question for you, because oh, 0:04:13.680 --> 0:04:15.680 let's hear it, we did an episode about are you 0:04:15.720 --> 0:04:17.599 frugal or are you cheap? And kind of how to 0:04:17.640 --> 0:04:20.120 make that decision, and we come up against those decisions 0:04:20.120 --> 0:04:22.440 in our lives all the time. And so we got 0:04:22.440 --> 0:04:24.320 a great deal at this hotel. They had a cyber 0:04:24.360 --> 0:04:27.720 Monday sale that that was still lingering that we took 0:04:27.720 --> 0:04:29.800 advantage of, and we gotta get wait wait was it 0:04:29.839 --> 0:04:32.360 a crappy motel? No, it was a nice place. We 0:04:32.360 --> 0:04:34.960 really enjoyed. Actually yeah, but there was a music venue 0:04:35.200 --> 0:04:37.440 on the property and they had a show the night 0:04:37.480 --> 0:04:39.720 that we checked in, and if you were staying there, 0:04:40.120 --> 0:04:43.200 you could go see the show for free. So we decided, 0:04:43.600 --> 0:04:47.520 being people that like free things and we typically like 0:04:47.560 --> 0:04:49.680 a decent music show to go check this band out. 0:04:50.160 --> 0:04:53.280 Uh it was so it was so guzy, didn't turn 0:04:53.320 --> 0:04:55.359 out so well. Well, it was really funny walking in 0:04:55.400 --> 0:04:58.800 there because we were a good thirty years younger than 0:04:58.839 --> 0:05:02.000 pretty much anybody else in there. Thirty years younger. But 0:05:02.000 --> 0:05:04.400 you're in Athens, Georgia. This is a college town. Yeah, 0:05:04.600 --> 0:05:07.520 oh that's a bad sign. It was. It was a 0:05:07.600 --> 0:05:12.680 bunch of upper fifties early sixties people hanging out lists, 0:05:12.680 --> 0:05:15.680 so obviously it wasn't our genre of music. And and 0:05:15.720 --> 0:05:17.359 there was this one guy that came walking up the 0:05:17.400 --> 0:05:20.440 stairs and with like a hand carved cane that was 0:05:20.440 --> 0:05:24.039 pretty impressive. It caught everyone's attention. I promise you it 0:05:24.120 --> 0:05:26.200 was really cool cane and I hope to have one 0:05:26.200 --> 0:05:28.640 similar to it when I'm older. So the the concert, 0:05:28.680 --> 0:05:30.680 we only stayed for like four songs because it just 0:05:30.760 --> 0:05:34.280 wasn't our style, and obviously it wasn't supposed to be, 0:05:34.320 --> 0:05:37.520 I don't think. But yeah, so we left. Are we 0:05:37.600 --> 0:05:39.640 frugal or cheap for trying to take advantage of the 0:05:39.680 --> 0:05:43.039 free concert but then leaving early? I don't know. That's 0:05:43.080 --> 0:05:45.359 totally a frul. I mean, I guess you can't call 0:05:45.400 --> 0:05:48.159 it a win, but did it cost you any more money? 0:05:48.200 --> 0:05:50.720 It's like, no, right, it maybe cost you a little 0:05:50.720 --> 0:05:52.359 bit of time where you kind of were standing around 0:05:52.360 --> 0:05:54.279 and kind of checking out the scene, but it's not 0:05:54.320 --> 0:05:56.480 like it costs you money, right, And it didn't cost 0:05:56.520 --> 0:05:58.719 you money more money down the road. And it was 0:05:58.760 --> 0:06:00.839 Emily up for it as well. When you guys were 0:06:01.040 --> 0:06:02.840 we're talking about it, was she as for it as 0:06:02.839 --> 0:06:05.440 you were. Yeah, I mean, okay, totally up for checking 0:06:05.480 --> 0:06:08.080 it out. And it was fun for for a little while, 0:06:08.200 --> 0:06:11.880 and then we just realized for us, and I don't 0:06:11.920 --> 0:06:14.039 mind being out of place. I don't mind like rocking 0:06:14.040 --> 0:06:16.159 out with a bunch of sixty year old if we're 0:06:16.160 --> 0:06:18.039 both into the same music. But it just honestly turned 0:06:18.040 --> 0:06:20.520 out it wasn't work. It wasn't our style style of tunes, 0:06:20.560 --> 0:06:22.880 and so we decided to mosey on down the road. Yeah. Well, 0:06:22.920 --> 0:06:24.520 I mean, for me, those are the biggest things that 0:06:24.520 --> 0:06:25.839 I try to keep in mind, right when it comes 0:06:25.839 --> 0:06:27.440 to if you're being frugal or cheap, is this going 0:06:27.480 --> 0:06:29.560 to actually cost me more down the road because I'm 0:06:29.560 --> 0:06:32.799 being too cheap now? Or am I imposing my cheapness 0:06:33.160 --> 0:06:36.760 your frugality on someone else? Forcing my wife. So if 0:06:36.800 --> 0:06:38.520 she was just like Joel, I do not want to 0:06:38.520 --> 0:06:40.560 go to the stupid concert, and I'm like, it's free, 0:06:40.560 --> 0:06:43.960 we're going, then that may have been you being cheap 0:06:44.000 --> 0:06:45.400 and that we had a problem. Yeah, that would have 0:06:45.400 --> 0:06:47.000 been a fail. But as it is, you know, you've 0:06:47.000 --> 0:06:49.240 got to take advantage of those free things. And we 0:06:49.279 --> 0:06:50.880 talked about that on a recent episode, how to take 0:06:50.880 --> 0:06:53.760 advantage of free things, taking advantage of free stuff, and 0:06:53.800 --> 0:06:55.800 I'm glad to hear you guys were had an open 0:06:55.800 --> 0:06:58.159 mind when we're up for it. It had two effects 0:06:58.200 --> 0:07:00.400 on me. One, I hope that when I'm sixty, I'm 0:07:00.440 --> 0:07:03.440 still going to rock and roll concerts. And two, it 0:07:03.520 --> 0:07:05.840 made me wonder if my kids are going to think 0:07:05.880 --> 0:07:08.039 that my music, the music I listened to is super 0:07:08.120 --> 0:07:10.200 lame when I'm that age, because I was like, oh, 0:07:10.240 --> 0:07:11.880 it's not really my style. I don't really like it. 0:07:11.920 --> 0:07:13.840 But are my kids gonna say the same thing about 0:07:13.840 --> 0:07:16.680 the bands I listened to now? Probably and they'll be wrong? 0:07:18.120 --> 0:07:21.240 Yeah's right because we have excellent taste in music, and 0:07:21.320 --> 0:07:24.400 we also have matt excellent taste in beer. And so 0:07:24.560 --> 0:07:27.160 let's tell everyone the beer we're drinking today during the 0:07:27.200 --> 0:07:32.040 show is Morgan Territory Brewing Dark Reckoning Imperial Porter. This 0:07:32.080 --> 0:07:35.680 beer was donated to the show by Brent's out in California. 0:07:35.800 --> 0:07:37.480 He sent us a bunch of beers and this is 0:07:37.520 --> 0:07:39.320 the only one that are having on the show because 0:07:39.360 --> 0:07:41.880 we already enjoyed the other ones. They were delicious, So 0:07:42.160 --> 0:07:44.040 thanks so much, man, We appreciate it, our buddy. We 0:07:44.040 --> 0:07:46.520 already poured the beer. It's a dark black color. Let's 0:07:46.560 --> 0:07:48.800 take a sip, and let's give one word to describe 0:07:48.840 --> 0:07:50.920 the beer that we're drinking. Cheers, all right, I'm gonna 0:07:50.920 --> 0:07:53.640 give you my word first. The word that immediately came 0:07:53.680 --> 0:07:56.040 to my mind. This is a porter. And lots of 0:07:56.120 --> 0:07:59.480 times porters aren't quite as big and and robust as 0:07:59.520 --> 0:08:03.080 a stout. So my word robust. Yeah, that's a good word. 0:08:03.760 --> 0:08:06.240 That's a good beer as well. My word is gonna 0:08:06.280 --> 0:08:08.920 be thick. And as always, we're going to talk more 0:08:08.960 --> 0:08:11.000 about the beer at the end of the show, and 0:08:11.160 --> 0:08:14.400 we'll talk about our one word description at that point. Yeah, 0:08:14.480 --> 0:08:16.480 but for now, Matt, let's get to the topic at hand. 0:08:16.560 --> 0:08:19.880 We're talking tax tips, credits and deductions, and we did 0:08:19.880 --> 0:08:22.520 an episode last week on adjustments that you can make 0:08:22.640 --> 0:08:25.120 to your adjusted gross income to cut your tax bill. 0:08:25.360 --> 0:08:28.280 And we mentioned last week too, we're not tax pros, right, 0:08:28.480 --> 0:08:31.680 So so if you want specific tax advice for your situation, 0:08:32.000 --> 0:08:34.360 it's a really good idea to find an accountant or 0:08:34.400 --> 0:08:36.000 a c p A in your area that can help 0:08:36.000 --> 0:08:38.280 you where you are exactly. But Matt and I have 0:08:38.559 --> 0:08:40.880 you know, we've we've wanted to to give some lessons 0:08:40.880 --> 0:08:43.000 from what we've learned and kind of some of the 0:08:43.040 --> 0:08:46.680 specifics based on the new tax cuts in Jobs Act 0:08:46.760 --> 0:08:49.240 that win to affect last year and how that new 0:08:49.320 --> 0:08:53.520 issue law is going to affect your tax situation. That's right, man. 0:08:53.600 --> 0:08:56.000 And again, so the last episode we talked about those 0:08:56.040 --> 0:08:59.520 above the line deductions, which weren't actually deductions, right. There 0:08:59.520 --> 0:09:01.920 are things that you can do to modify your adjusted 0:09:01.960 --> 0:09:05.880 gross income regardless if you take the standard deduction or 0:09:05.920 --> 0:09:08.280 if you itemize your deduction. And so this week we're 0:09:08.280 --> 0:09:10.600 gonna help you think through whether or not you should 0:09:10.760 --> 0:09:13.040 take the standard deduction or if you should take the 0:09:13.080 --> 0:09:16.040 itemized deduction. Yeah, and that's gonna be a question for 0:09:16.080 --> 0:09:18.560 a lot of folks, especially if you're doing your own taxes. 0:09:19.000 --> 0:09:21.400 You used to be the thirty percent of Americans would 0:09:21.400 --> 0:09:25.559 itemize our deductions. But it's assumed at this point, based 0:09:25.600 --> 0:09:27.640 on the way people have filed their taxes in the past, 0:09:27.920 --> 0:09:30.600 that this new tax law is actually going to cause 0:09:30.679 --> 0:09:33.360 a lot fewer people to end up itemizing their deductions. 0:09:33.360 --> 0:09:36.320 They're gonna be taking typically the standard deduction. So for 0:09:36.360 --> 0:09:38.560 a lot of folks that's likely going to be the case. 0:09:39.280 --> 0:09:43.160 Americans are going to take this much bigger standard deduction. 0:09:43.320 --> 0:09:45.800 But that's not true for everyone. And like you said, Joe, 0:09:45.880 --> 0:09:48.360 the Tax Cuts and Jobs Act, right that was signed 0:09:48.360 --> 0:09:51.000 into law, and what that did is that it basically 0:09:51.040 --> 0:09:54.439 doubled the standard deduction for singles if you're filing jointly, 0:09:54.640 --> 0:09:56.440 as well as for a head of household. So if 0:09:56.480 --> 0:09:59.280 you're filing individually, that bumped that up to twelve thousand, 0:09:59.320 --> 0:10:01.560 and if you're married filing jointly, it bumped that up 0:10:01.600 --> 0:10:04.360 to twenty four thousand. It makes sense that a lot 0:10:04.400 --> 0:10:07.040 of people are going to buy default. They're gonna think, oh, 0:10:07.040 --> 0:10:09.440 I'm just gonna take the standard deduction. That's not gonna 0:10:09.480 --> 0:10:12.240 make sense for me to itemize my taxes. Maybe I've 0:10:12.280 --> 0:10:14.240 never idomized my taxes. I'm definitely not gonna do it 0:10:14.240 --> 0:10:16.120 this year, but like we said, it's not going to 0:10:16.200 --> 0:10:18.960 be the case for everyone though, And you know, we'll 0:10:18.960 --> 0:10:22.400 cover who should consider itemizing deductions right after the break. 0:10:30.920 --> 0:10:33.080 You know what's funny is that we're actually doing a 0:10:33.160 --> 0:10:35.560 second episode on taxes. If you would have told me 0:10:35.600 --> 0:10:37.360 that we're gonna do this, even like a few weeks ago, 0:10:38.320 --> 0:10:41.200 I would have said, no, that sounds totally boring that 0:10:41.280 --> 0:10:44.240 we would spend two full episodes on taxes. But taxes 0:10:44.280 --> 0:10:46.080 are so important, man, there, there's so much of our 0:10:46.080 --> 0:10:49.440 money goes towards taxes, goes towards our government, and it's 0:10:49.559 --> 0:10:52.480 worth covering. It's worth covering in detail to help us 0:10:52.480 --> 0:10:54.720 consider whether or not we should itomize our taxes or not, 0:10:54.800 --> 0:10:57.600 and to talk through the other implications. Yeah, and Matt, 0:10:57.679 --> 0:11:00.400 I think, yeah, taxes when you think about it, generally, 0:11:00.440 --> 0:11:03.240 apart from a cool podcast like this there, it's a 0:11:03.240 --> 0:11:06.360 boring subject. But that's our job. That's what we're into 0:11:06.640 --> 0:11:10.360 is trying to make the potentially boring subject interesting, relevant 0:11:10.360 --> 0:11:13.640 and fun. And speaking of relevance, man, taxes are so 0:11:13.800 --> 0:11:16.280 relevant to every single one of us, and there are 0:11:16.360 --> 0:11:18.840 got to pay them right death and taxes super certain 0:11:18.880 --> 0:11:21.760 and we talked about that in last week's episode, that 0:11:21.760 --> 0:11:23.559 that there are pretty much a certainty, but there are 0:11:23.600 --> 0:11:26.560 so many ways that you can, if you're smart and thoughtful, 0:11:26.720 --> 0:11:30.079 lower your income you're adjusted gross income in order to 0:11:30.120 --> 0:11:32.400 pay fewer taxes. And so that's kind of part of 0:11:32.400 --> 0:11:33.920 the gist of the show as well. It's like, hey, 0:11:33.920 --> 0:11:37.880 how can you take advantage of the existing structure, the 0:11:37.920 --> 0:11:40.880 existing tax structure in this country to maximize you know, 0:11:40.920 --> 0:11:43.920 credits and deductions in order to make sure that you're 0:11:43.920 --> 0:11:46.120 not paying more than you need to be. And so 0:11:46.120 --> 0:11:49.880 now we're gonna talk about who should consider itemizing their taxes. 0:11:50.200 --> 0:11:52.480 The standard deduction is the default. You've always got that, 0:11:52.559 --> 0:11:54.160 but if you want to break it down even more, 0:11:54.160 --> 0:11:58.120 you can itemize, except if you're married, you have to 0:11:58.160 --> 0:12:01.040 do whatever your spouse does. That one instance where you 0:12:01.080 --> 0:12:03.160 don't have a choice. So if you have a spouse 0:12:03.520 --> 0:12:06.360 and they are filing individually, well you're gonna have to 0:12:06.440 --> 0:12:09.040 file individually as well. First off, if you own a 0:12:09.080 --> 0:12:12.240 home with a mortgage, especially if you have rental properties, 0:12:12.520 --> 0:12:15.960 you could easily exceed the standard deduction. And so you know, 0:12:16.000 --> 0:12:20.240 with mortgage interests and with real estate property taxes. That alone, 0:12:20.320 --> 0:12:22.679 right there could get you halfway to that standard deduction. 0:12:22.920 --> 0:12:24.800 That's the first thing that you're gonna want to consider 0:12:25.000 --> 0:12:27.640 this time of year. You've got your t that your 0:12:27.679 --> 0:12:30.960 banks or your mortgage holders are mailing out. Hopefully by 0:12:30.960 --> 0:12:33.000 now you've got yours. But that is the form that 0:12:33.000 --> 0:12:35.040 you're gonna want to look at. That tells you what 0:12:35.120 --> 0:12:37.480 your mortgage interest is as as well as what your 0:12:37.480 --> 0:12:40.960 property taxes as well. Also, you're able to itemize interest 0:12:41.000 --> 0:12:43.240 that you paid on a home equity line of credit 0:12:43.440 --> 0:12:46.920 or a construction loan, but only if you can prove 0:12:47.160 --> 0:12:50.439 that you increased value to your residents. So that is 0:12:50.480 --> 0:12:53.080 a change in this tax law. Before the Tax Cuts 0:12:53.120 --> 0:12:56.320 and Jobs Act was written into law, you could write 0:12:56.320 --> 0:12:58.840 off the interest paid on a home equity line of credit. 0:12:58.920 --> 0:13:01.080 But now you have to be able to prove that 0:13:01.160 --> 0:13:03.719 you didn't just use your home equity line to take 0:13:03.720 --> 0:13:06.320 a vacation and buy some new clothes. You have to 0:13:06.600 --> 0:13:09.400 actually have improved the physical residents that you live in. 0:13:09.679 --> 0:13:12.160 That's one caveat in this new tax law. Yeah, or 0:13:12.200 --> 0:13:14.319 even if you use that loan for something more noble, right, 0:13:14.320 --> 0:13:15.920 like to put your kid through you know, like a 0:13:16.000 --> 0:13:18.120 nice college or something like that. It's kind of a bummer. 0:13:18.440 --> 0:13:20.600 But yeah, fact is they want to see that you've 0:13:20.720 --> 0:13:23.880 taken that loan out specifically for the increase to your residence. 0:13:24.400 --> 0:13:26.760 Something else to mention that happened as well with the 0:13:26.840 --> 0:13:29.840 Tax Cuts and Jobs Act. Doesn't that just roll off 0:13:29.840 --> 0:13:33.320 the tongue, Joel, It's so easy to say. But there's 0:13:33.360 --> 0:13:36.800 a new ten thousand dollar cap on property tax due 0:13:36.840 --> 0:13:39.160 to the new federal law. So if you get that 0:13:39.160 --> 0:13:42.040 to ninety eight and it has your mortgage interests and 0:13:42.559 --> 0:13:45.040 buy a chance your property taxes are more than ten 0:13:45.040 --> 0:13:47.760 thousand dollars, well it doesn't matter because there's a cap 0:13:47.760 --> 0:13:49.920 at ten thousand. And the other thing too, man, is 0:13:49.960 --> 0:13:53.440 that that's the total between your state, local and property 0:13:53.480 --> 0:13:57.640 taxes collectively. And so that's sort of a downside to 0:13:57.720 --> 0:13:59.640 the new law is that you'll be able to itemize 0:13:59.760 --> 0:14:03.439 less of that. It's called salt rights, state and local 0:14:03.480 --> 0:14:05.640 tax Yeah, that's something to be aware of when you're 0:14:05.640 --> 0:14:07.440 doing the quick math here to to figure out if 0:14:07.480 --> 0:14:10.360 you should automize your deductions and so, in particular for 0:14:10.480 --> 0:14:13.480 real estate investors, it's likely that you have loans associated 0:14:13.520 --> 0:14:15.880 with your properties and potentially a line of credit or 0:14:15.880 --> 0:14:19.080 something like that as well. And in addition to that 0:14:19.480 --> 0:14:24.280 interest that you're paying, you can also deduct depreciation, operating expenses, 0:14:24.360 --> 0:14:27.560 and repairs. So real estate investors really do, honestly have 0:14:27.600 --> 0:14:29.200 it have it good. They've had it good for a 0:14:29.200 --> 0:14:31.600 long time under the tax code, and that continues to 0:14:31.600 --> 0:14:33.960 be the case. So if you own a home with 0:14:34.000 --> 0:14:37.520 a mortgage, consider atomizing your taxes. Also, if you have 0:14:37.600 --> 0:14:42.200 paid some huge medical bills, and consider itemizing your taxes. 0:14:42.600 --> 0:14:44.520 The only downside to this, though, is that you can 0:14:44.560 --> 0:14:48.400 only deduct your medical bills once they've exceeded seven and 0:14:48.440 --> 0:14:53.240 a half percent of your adjusted gross income foren For example, 0:14:53.360 --> 0:14:56.520 if you had an adjusted gross income of fifty thousand, 0:14:56.920 --> 0:15:00.280 that means the first three thousand, seven hundred fifty ours 0:15:00.920 --> 0:15:04.200 that you've paid towards medical bills effectively don't count. And 0:15:04.240 --> 0:15:06.880 so once you get past that threshold, anything that you 0:15:06.920 --> 0:15:10.880 pay beyond fifty you can deduct every single dollar of that. 0:15:11.680 --> 0:15:13.840 But before you go through all your doctor's bills and 0:15:13.840 --> 0:15:16.800 prescription receipts, you know, do the quick math, make sure 0:15:16.840 --> 0:15:19.080 it's worth it, yeah, Matt. And also you can deduct 0:15:19.120 --> 0:15:21.680 your health insurance premiums, but only if they were paid 0:15:21.680 --> 0:15:24.160 with after tax money. So it's really important for people 0:15:24.160 --> 0:15:27.320 to consider if they did have a more expensive health 0:15:27.360 --> 0:15:29.800 care policy, even if they got it through the exchange. 0:15:30.000 --> 0:15:32.240 That could be one quick check mark in the column 0:15:32.320 --> 0:15:35.280 of it being much more likely that it's better for 0:15:35.320 --> 0:15:37.960 you to itemize as opposed to taking the new standard deduction. 0:15:38.200 --> 0:15:41.960 And another huge potential deduction is charitable giving. Just keep 0:15:42.000 --> 0:15:44.040 in mind that this has to be to an actual 0:15:44.200 --> 0:15:47.680 five oh one c three, not just some organization or 0:15:47.760 --> 0:15:50.480 political party or an individual that you decide to give 0:15:50.520 --> 0:15:53.560 money to. That does not count to me, giving you 0:15:53.640 --> 0:15:55.520 like all that money last week, that doesn't count. I 0:15:55.560 --> 0:15:58.760 think that falls under the category of one time annual gift, 0:15:59.400 --> 0:16:01.400 which I believe it is that fourteen thousand. That's true 0:16:01.440 --> 0:16:03.080 where it used to be. But yeah, so keep that 0:16:03.120 --> 0:16:06.600 in mind. You can do either cash contributions or even 0:16:06.640 --> 0:16:10.000 non cash contributions like cars, you know, different things like that. 0:16:10.120 --> 0:16:12.560 Have you ever donated something big like a car or 0:16:12.560 --> 0:16:16.520 a boat? It's a goodwill. No no boats, no boats, 0:16:16.720 --> 0:16:18.840 no cars either. And actually, just on that note, if 0:16:18.880 --> 0:16:21.960 someone is thinking about donating a car for tax purposes, 0:16:22.160 --> 0:16:23.960 the I R. S is really cracked down on recent 0:16:24.000 --> 0:16:27.800 in recent years on on car contributions, and so it's 0:16:27.840 --> 0:16:30.600 actually would in all likelihood be better for you to 0:16:30.720 --> 0:16:33.040 sell the car, take the money from that, and then 0:16:33.080 --> 0:16:35.960 donate that money to a charity of your choice as 0:16:35.960 --> 0:16:38.880 opposed to donating the car. And actually many times it's 0:16:38.880 --> 0:16:41.600 better for the charity as well, because a car that's 0:16:41.640 --> 0:16:44.400 not working on whatever that there's so many logistics involved 0:16:44.440 --> 0:16:45.920 in that, like what do we do with this? Yeah, 0:16:45.960 --> 0:16:47.840 I don't want this old Nissan. But the the i 0:16:47.920 --> 0:16:50.960 RS is really cracked down on what they're allowing you 0:16:51.080 --> 0:16:53.080 to write off when it comes to a car donation. 0:16:53.400 --> 0:16:56.280 And so those are the three biggest things to consider 0:16:56.640 --> 0:16:58.800 if you have a mortgage on a house, big old 0:16:58.800 --> 0:17:02.600 medical bills, and charitable giving. Quickly do the math on 0:17:02.760 --> 0:17:05.679 those three categories, and if you exceeded your threshold, you 0:17:05.680 --> 0:17:08.040 know on what you would receive with a standard deduction. 0:17:08.520 --> 0:17:11.679 You want to seriously consider itemizing your taxes because chances 0:17:11.720 --> 0:17:14.560 are you're gonna be able to find some additional deductions 0:17:15.040 --> 0:17:17.760 that we're not mentioning here. There's there's lots more. These 0:17:17.800 --> 0:17:20.280 are the three that you should consider when you're kind 0:17:20.280 --> 0:17:22.480 of weighing the options as to whether you should take 0:17:22.520 --> 0:17:25.480 the standard deduction or if you should itemize your taxes. Yeah, 0:17:25.520 --> 0:17:27.960 do the quick general back of the envelope math to 0:17:27.960 --> 0:17:30.440 see if you're anywhere close, and then if you are, 0:17:30.800 --> 0:17:32.920 if you are close to that either twelve thousand or 0:17:32.920 --> 0:17:36.359 twenty four thousand dollar number, whether you're filing single or 0:17:36.720 --> 0:17:38.879 or filing as a married couple, if you find yourself 0:17:38.880 --> 0:17:40.520 in that ballpark, that's when you're gonna want to do 0:17:40.560 --> 0:17:43.119 the specific math in order to make sure that you 0:17:43.160 --> 0:17:46.439 are filing taxes the best way for you. Honestly, to 0:17:46.480 --> 0:17:47.960 a lot of folks, that sounds like a lot of work. 0:17:48.040 --> 0:17:49.440 They're like, well, how am I supposed to do quick 0:17:49.480 --> 0:17:51.920 math and figure out these things? And Man, what I 0:17:51.960 --> 0:17:54.920 would say to that is, this is a huge argument 0:17:55.240 --> 0:17:57.520 for tracking your spending because at the end of the year, 0:17:57.560 --> 0:18:00.000 if you've been tracking your spending, you can quickly see 0:18:00.240 --> 0:18:03.880 how much you've paid towards your insurance premiums as well 0:18:03.920 --> 0:18:06.240 as to your medical payments. When it comes to your 0:18:06.280 --> 0:18:08.160 house or your mortgage, you'll receive it to ninety eight, 0:18:08.200 --> 0:18:10.919 so you'll easily be able to see what your interest 0:18:10.920 --> 0:18:13.520 payments were and you'll also see what your s grow 0:18:13.560 --> 0:18:15.840 paid towards your property taxes. And then the same thing 0:18:15.840 --> 0:18:18.000 with the charitable giving. If you have been tracking your spending, 0:18:18.080 --> 0:18:20.119 you should be able to easily add up at the 0:18:20.200 --> 0:18:22.160 end of the year and see how much you've given 0:18:22.200 --> 0:18:24.520 away and those three or four numbers. I guess the 0:18:24.520 --> 0:18:27.040 mortgage has two numbers. You can add those together and yeah, 0:18:27.080 --> 0:18:30.200 and quickly see how close you are to that standard deduction. Yeah, Matt, 0:18:30.240 --> 0:18:33.600 and I think one important tip that actually really changed 0:18:33.640 --> 0:18:36.080 for people the way that their behavior is, especially the 0:18:36.080 --> 0:18:38.760 way that they consider their charitable giving, is if you're 0:18:38.760 --> 0:18:41.080