Tuesday, November 23, 2010

Questions for the Tax Lady: November 23rd, 2010

Check out the following new Questions for the Tax Lady answers and feel free to ask me questions through one of the links below. You can send me an email, direct message or @ reply, and I will do my best to get an answer for you!

Question: Roni, can I deduct all of my gambling losses on my tax return?

Answer: Unfortunately, the answer is no. You are allowed to deduct gambling losses on your tax return, but only to offset the amount of gambling winnings you report.

For example, if you report $2,000 in gambling winnings (as miscellaneous income on your tax return), you could only deduct up to $2,000 in gambling losses.

Question: I keep hearing about the expiring Bush tax cuts in the news, and how Congress still hasn't voted on them. How late into the year will we have to wait before we find out if the tax rates are going to change next year or not?

Answer: Get ready to wait some more! Congress has now said they will not vote until “after Thanksgiving.” How long after that, no one is sure. It could be their first order of business, or their last before the Winter break. I do think that no matter when they start discussing, they’re going to be arguing for quite a while.

The worst part is that no matter what is decided, you will likely see more taxes being withheld from your paychecks for the first part of 2011. The reason is the IRS has to print and distribute the tax charts to employers. Printing and distributing take time. So, the tax withholding charts had to be made as the laws are written right now: all cuts expire. Oh, you’ll get the money back, but in the meantime it will be confusing quagmire.

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