2018 Standard Tax Deductions for Individuals

The 2018 tax law changes introduced a much larger standard tax deduction than ever before.  At $12,000 for single taxpayers and $24,000 for married filers, this standard deduction may slowly do away with itemized deductions.  When filing, you may claim the largest deduction.  Either the standard deduction available to you based on your filing status or the sum of your itemized deductions.  The standard deduction involves less work as it alleviates the burden of accounting for and reporting all of the individual items. But for some, itemized deductions may still yield the greatest return.  

In March we discussed Workplace Tax Deductions that are available, depending on your career.  Volunteering can also create some opportunities for itemized deductions as we explored in June.  Additionally we’ve shared tax breaks that are available to students in 2018.  Here we look at some additional personal tax deductions to consider if you are planning to itemize deductions.

Financial expenses accrued throughout the year are often viable as deductions, so save your receipts for financial services.  Examples include the cost of preparing your income taxes. This includes tax software and filing fees or preparation fees if you see a professional.  Additionally, money spent for financial planning, can be claimed as well. By preparing for your financial future through financial planning services or creating a living will, you can also enjoy the benefits of financial returns in the present when deducting these expenses.  

Pumps and aids for nursing moms are just some of the reimbursable medical expenses that can be realized, depending on your medical needs throughout the year.  In order to claim medical expenses as an itemized deduction, they most total more than 7.5% of your AGI (adjusted gross income). This amount increases to 10% in 2019 and will mean only those with high medical expenditures will be able to realize these deductions.

Finally, if you are paying mortgage interest on a loan secured by your residence, whether it be a first or second home, this is acceptable as an itemized deduction.  You cannot claim payments on the principal nor can you claim if you have not been making payments.

For a  full list of available deductions with explanations, the IRS website is a great place to check out:  https://www.irs.gov/credits-deductions-for-individuals.  Remember to save receipts and paperwork throughout the year to make deducting easier at tax time!

Did you know that your vacation may be tax deductible as well?  We will explore this in greater detail in the next installment.


Jason Mundok Certified FileMaker Developer

Jason Mundok has been planning, designing, developing and deploying custom business applications for his clients since 2000. He is a certified FileMaker developer with extensive experience helping clients from a wide variety of industries design solutions, streamline business processes, and increase productivity.  New to FileMaker? FileMaker is a custom database platform for Mac, Windows, iPad, and iPhone. FileMaker has been a valuable information management tool across business, government, and educational industries for more than 30 years.

If you are looking for help developing a custom business solution for your organization, Jason is your guy.  He believes that creating and nurturing strong client relationships is the foundation for a successful project. For Jason, this begins with open and honest communication to create a collaborative environment.  In order to facilitate this communication, he utilizes a framework which includes the following components:

  • Feature Planning – collaboratively create a list of what you would like to do with the system or what you will expect the system to do automatically
  • Release Planning – define the project timeline and establish all project logistics such as meeting schedules, communication channels, and expectations
  • Development Cycles – plan, create, test, and review a subset of features and provide budget and status updates every two weeks
  • Beta Testing – move the system into your environment for authentic user testing
  • Deployment – convert your data and roll the system into production

Combining this framework and the FileMaker database platform, Jason has successfully completed numerous projects over the past 18 years.  His projects have ranged from small business solutions on up to creative applications for billion dollar corporations.

In addition to Jason’s work experience, he has had numerous opportunities to write and speak about developing custom business applications and managing development projects.  Jason has presented around the United States and has written for several publications. These opportunities include publication in FileMaker Advisor Magazine, speaking engagements at national FileMaker Developer Conferences, and seminar presentations in New York City and Philadelphia.  

To find out more about how Jason can help your business create solutions, streamline processes, and create solutions he can be reached via email at jason@jasonmundok.com or phone at 717-606-2992.


Starting Over: Budgeting for Success

Our first two topics in the starting over series explored growing trends in changing careers and divorce, especially as they occur later in life.  As part of both trends we discussed budgeting as a key component to success.  In March, we explored budgeting ideas in Your Family Budget.  In this final installment of the starting over series, we will go a little more in depth on the topic of budgeting.

Whenever possible, prepare for big upcoming changes such as career switches or divorce, by saving six months to 1 year of living expenses.  Even when you don’t have an impending change on the horizon, it is important to maintain a 6-12 month safety net for the unexpected and unplanned.  Prepare for the worst and you will be able to breathe easier throughout the process.

The first step towards saving 6-12 months of expenditures is to know what this dollar amount is.  This requires creating an honest budget to determine what 6-12 months of living expenses equal for you.  With a budget, not only will you have a guide for savings, you will also have a clear picture of how much you need to earn going forward.  This is particularly helpful in the event of a new career or separation with different household income.

When starting a budget, you don’t have to recreate the wheel.  There are budget calculators and budget formulas already in place, tried, tested, and proven successful.  Several of these budget calculators are shared in “Your Family Budget”.

One of the most popular budgeting formulas was created by Elizabeth Warren and it is known as the “50/30/20 Budgeting Rule”.  As with any formula, your first step is to itemize your monthly expenditures, being sure to list and include everything. Next list your monthly income.  Using Warren’s formula, you will then want to breakdown your income payments with 50% going towards needs, 30% towards wants, and 20% into savings OR paying off debt.  

A need is defined as something you need to live such as housing, groceries, electric, or water.  Minimum monthly payments toward debt are also considered needs. While a 30% allocation going towards wants may seem to be a lot, wants include things you might not consider to be in this category.  For example, many consider their monthly phone plan to be a need, but it really constitutes an extra – along with going out to eat, and cable or Netflix subscriptions.  Before making a purchase, stop and think.  Is this something I need or is this something I want?  Splurging on wants every now and again is fine, but establish some boundaries.  For example, agree that you will take care of a want once a month and determine a dollar amount to spend ahead of time when you’re creating your budget.  

It’s also important to sit down with your budget regularly to make sure you are still on track and to verify that the budget created still works as time changes.  A good time to review your budget is when you are paying monthly bills or when you receive your paycheck. A budget, once created, is a working plan that can have the flexibility to change as needed and should be an active part of your financial routine.  Don’t create it and forget about it!