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Joe Diamond, CPA, CFP®, EA, MST

 

Diamond Financial Corporation

4256 North Arlington Heights Road, Suite 204

Arlington Heights, IL 60004

 

Phone: 847-884-8500 

 

Email: customerservice@diamondfinancial.com

Website: www.diamondfinancial.com

November/December 2020

Bunching Deductions

The Tax Cuts and Jobs Act doubled the standard deduction, which affected many people who had few deductions because they are better off taking the standard deduction.


A Possible Solution
That’s where bunching deductions comes in. Here’s generally how it works: By paying two years’ worth of qualifying deductible expenditures before year’s end you may be able to exceed the standard deduction and deduct those expenses on your 2020 return. Then next year, take the standard deduction. Alternatively, you can push deductions into next year and take the standard deduction this year. Some deductions that qualify include:


Charitable Giving
Rather than making your usual contribution every year, it may make more sense to make a double contribution every other year – or a triple contribution every third year.


Medical Expenses
If your medical expenses are in excess of 10% of your adjusted gross income, you can deduct them. So, it may make sense to schedule that elective surgery before year’s end—or next year, if you expect higher medical expenses.


Property taxes
You could pre-pay property taxes that have been assessed, but this deduction is capped at $10,000.


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Advisory Services offered through Diamond Financial Corporation, Registered Investment Advisor. Custodial Services provided by TD Ameritrade. Member FINRA/SIPC/MSRB.
Tax Preparation provided by Diamond Financial Corporation.
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