Tax Tips, Credits, and Deductions #053

by switching? Dude? Yeah, So I had been totally slack and we had been with Exfinity for close to a year now at a non promotional rate because you know, the promotional rate expired and we've been busy with life and dude, I didn't get to that for a whole year. That is like the complete opposite of me. So it was all my radar. But finally I was I was like, I can't keep paying seventy bucks for crappy internet, which

is what I was doing. Dude, We're paying seventy bucks a month for thirty megabits per second and a t T had this deal going around and it was forty bucks for three d megabits per second. That's a little bit faster. It's way more than a little bit faster, and a good bit cheaper. Dude, it is amazing and what's crazy? And this is a little throwback to the episode eighteen where we had talked about the art of

asking for a discount. But man, I contacted Comcast or Exfinity whatever twice to see if I could negotiate, and I was willing to walk away, and they wouldn't budge at all. Isn't that crazy? You had to do what you had to do, man, you gotta move on. Well, So the first time I was just expecting them to cave a little bit because I thought, okay, fifteen twenty megabits per second, it's fine. If I can just get the rate lowered down to forty, that's the easiest, and

I don't I don't have to worry about it. I just didn't want my life disrupted. But they were like, no, sorry. So then I had to call up a T and T and actually get it scheduled and take advantage of that deal. And then I call it a Comcast back again and again try to get them down and they

weren't budging. Man, I could not believe it. Word otherwise to anybody out there who hasn't shopped their their Internet bill, is really honestly like it can be a pain and your current provider can't say no, but pit them against each other. And also consider using Twitter, because Twitter can be a great place to find the customer support person who can actually make a difference. Sometimes if you just call the regular one eight hundred number, you're getting told

no constantly. And I think Twitter is just a good place for you to go to potentially get some actual customer service and someone that can actually give you a lower rate. Well, that's true, I didn't do that next time. Well, the thing is, dude, I was just fed up with it, you know, and so I was like, forget this. I feel like twitters for the birds. Gonna call them up, literally, asked, Yeah, asked.

I asked for the customer retention department. They transferred me over, And honestly, I'm just happier now that I'm giving my money to a t and t um and dude and the dude that came up, and then they'll do something to to make you mad and you'll switch back, exactly. It's like the circle of life. It never ends, the circle of Internet providers. Well, and the guy that came out and actually did the install was so incredibly awesome. Man, he stood there and talked through it with me and

explained to me how like the dual band networks were. Okay, so here's a little internet primary for everybody. The five giga hurst band is faster, like that's a three megabits per second band, but it's doesn't have as far of a reach. That's how it was explained to me at least. So if you're hard wired in, if you're hard wired in,

or if you're near you're wireless router, it's awesome. However, beyond a certain range, it switches to the old school two point four, which is the slower Internet that's typically like the thirty megabits per second coverage, right, And so if you're on the other side of your house, that's probably the network that you're getting, right, And it's the same network, and it just automatically switches on your modem. Yeah, and there. Now you've just got three intern sixty dollars

extra in your pocket every year. There's so many more things that you can either spend that on or you can save that money. Yeah, man, that's awesome because actually to get something a better service in your life and to save money, that's that's awesome. That's to win win, Yeah, where I could even take my wife on a fancy little trip. There we go like I just did with Emily. But so we run at a hotel for a couple of nights and just had a great time just connecting.

And with young kids, it can be hard to get that connection time with your wife, and so we had a great little trip together. And I wanted to run by Matt a frugal verse cheap question for you, because oh, let's hear it, we did an episode about are you frugal or are you cheap? And kind of how to make that decision, and we come up against those decisions in our lives all the time. And so we got

a great deal at this hotel. They had a cyber Monday sale that that was still lingering that we took advantage of, and we gotta get wait wait was it a crappy motel? No, it was a nice place. We really enjoyed. Actually yeah, but there was a music venue on the property and they had a show the night that we checked in, and if you were staying there,

you could go see the show for free. So we decided, being people that like free things and we typically like a decent music show to go check this band out. Uh it was so it was so guzy, didn't turn out so well. Well, it was really funny walking in there because we were a good thirty years younger than pretty much anybody else in there. Thirty years younger. But you're in Athens, Georgia. This is a college town. Yeah,

oh that's a bad sign. It was. It was a bunch of upper fifties early sixties people hanging out lists, so obviously it wasn't our genre of music. And and there was this one guy that came walking up the stairs and with like a hand carved cane that was pretty impressive. It caught everyone's attention. I promise you it was really cool cane and I hope to have one

similar to it when I'm older. So the the concert, we only stayed for like four songs because it just wasn't our style, and obviously it wasn't supposed to be, I don't think. But yeah, so we left. Are we frugal or cheap for trying to take advantage of the free concert but then leaving early? I don't know. That's totally a frul. I mean, I guess you can't call it a win, but did it cost you any more money?

It's like, no, right, it maybe cost you a little bit of time where you kind of were standing around and kind of checking out the scene, but it's not like it costs you money, right, And it didn't cost you money more money down the road. And it was Emily up for it as well. When you guys were we're talking about it, was she as for it as you were. Yeah, I mean, okay, totally up for checking it out. And it was fun for for a little while, and then we just realized for us, and I don't

mind being out of place. I don't mind like rocking out with a bunch of sixty year old if we're both into the same music. But it just honestly turned out it wasn't work. It wasn't our style style of tunes, and so we decided to mosey on down the road. Yeah. Well, I mean, for me, those are the biggest things that I try to keep in mind, right when it comes to if you're being frugal or cheap, is this going to actually cost me more down the road because I'm

being too cheap now? Or am I imposing my cheapness your frugality on someone else? Forcing my wife. So if she was just like Joel, I do not want to go to the stupid concert, and I'm like, it's free, we're going, then that may have been you being cheap and that we had a problem. Yeah, that would have been a fail. But as it is, you know, you've

got to take advantage of those free things. And we talked about that on a recent episode, how to take advantage of free things, taking advantage of free stuff, and I'm glad to hear you guys were had an open mind when we're up for it. It had two effects on me. One, I hope that when I'm sixty, I'm still going to rock and roll concerts. And two, it made me wonder if my kids are going to think that my music, the music I listened to is super lame when I'm that age, because I was like, oh,

it's not really my style. I don't really like it. But are my kids gonna say the same thing about the bands I listened to now? Probably and they'll be wrong? Yeah's right because we have excellent taste in music, and we also have matt excellent taste in beer. And so let's tell everyone the beer we're drinking today during the show is Morgan Territory Brewing Dark Reckoning Imperial Porter. This beer was donated to the show by Brent's out in California.

He sent us a bunch of beers and this is the only one that are having on the show because we already enjoyed the other ones. They were delicious, So thanks so much, man, We appreciate it, our buddy. We already poured the beer. It's a dark black color. Let's take a sip, and let's give one word to describe the beer that we're drinking. Cheers, all right, I'm gonna give you my word first. The word that immediately came

to my mind. This is a porter. And lots of times porters aren't quite as big and and robust as a stout. So my word robust. Yeah, that's a good word. That's a good beer as well. My word is gonna be thick. And as always, we're going to talk more about the beer at the end of the show, and we'll talk about our one word description at that point. Yeah, but for now, Matt, let's get to the topic at hand.

We're talking tax tips, credits and deductions, and we did an episode last week on adjustments that you can make to your adjusted gross income to cut your tax bill. And we mentioned last week too, we're not tax pros, right, So so if you want specific tax advice for your situation, it's a really good idea to find an accountant or a c p A in your area that can help

you where you are exactly. But Matt and I have you know, we've we've wanted to to give some lessons from what we've learned and kind of some of the specifics based on the new tax cuts in Jobs Act that win to affect last year and how that new issue law is going to affect your tax situation. That's right, man. And again, so the last episode we talked about those

above the line deductions, which weren't actually deductions, right. There are things that you can do to modify your adjusted gross income regardless if you take the standard deduction or if you itemize your deduction. And so this week we're gonna help you think through whether or not you should take the standard deduction or if you should take the itemized deduction. Yeah, and that's gonna be a question for a lot of folks, especially if you're doing your own taxes.

You used to be the thirty percent of Americans would itemize our deductions. But it's assumed at this point, based on the way people have filed their taxes in the past, that this new tax law is actually going to cause a lot fewer people to end up itemizing their deductions. They're gonna be taking typically the standard deduction. So for a lot of folks that's likely going to be the case. Americans are going to take this much bigger standard deduction.

But that's not true for everyone. And like you said, Joe, the Tax Cuts and Jobs Act, right that was signed into law, and what that did is that it basically doubled the standard deduction for singles if you're filing jointly, as well as for a head of household. So if you're filing individually, that bumped that up to twelve thousand, and if you're married filing jointly, it bumped that up to twenty four thousand. It makes sense that a lot

of people are going to buy default. They're gonna think, oh, I'm just gonna take the standard deduction. That's not gonna make sense for me to itemize my taxes. Maybe I've never idomized my taxes. I'm definitely not gonna do it this year, but like we said, it's not going to be the case for everyone though, And you know, we'll cover who should consider itemizing deductions right after the break. You know what's funny is that we're actually doing a

second episode on taxes. If you would have told me that we're gonna do this, even like a few weeks ago, I would have said, no, that sounds totally boring that we would spend two full episodes on taxes. But taxes are so important, man, there, there's so much of our money goes towards taxes, goes towards our government, and it's worth covering. It's worth covering in detail to help us consider whether or not we should itomize our taxes or not,

and to talk through the other implications. Yeah, and Matt, I think, yeah, taxes when you think about it, generally, apart from a cool podcast like this there, it's a boring subject. But that's our job. That's what we're into is trying to make the potentially boring subject interesting, relevant

and fun. And speaking of relevance, man, taxes are so relevant to every single one of us, and there are got to pay them right death and taxes super certain and we talked about that in last week's episode, that that there are pretty much a certainty, but there are so many ways that you can, if you're smart and thoughtful, lower your income you're adjusted gross income in order to pay fewer taxes. And so that's kind of part of

the gist of the show as well. It's like, hey, how can you take advantage of the existing structure, the existing tax structure in this country to maximize you know, credits and deductions in order to make sure that you're not paying more than you need to be. And so now we're gonna talk about who should consider itemizing their taxes. The standard deduction is the default. You've always got that, but if you want to break it down even more, you can itemize, except if you're married, you have to

do whatever your spouse does. That one instance where you don't have a choice. So if you have a spouse and they are filing individually, well you're gonna have to file individually as well. First off, if you own a home with a mortgage, especially if you have rental properties, you could easily exceed the standard deduction. And so you know, with mortgage interests and with real estate property taxes. That alone, right there could get you halfway to that standard deduction.

That's the first thing that you're gonna want to consider this time of year. You've got your t that your banks or your mortgage holders are mailing out. Hopefully by now you've got yours. But that is the form that you're gonna want to look at. That tells you what your mortgage interest is as as well as what your property taxes as well. Also, you're able to itemize interest that you paid on a home equity line of credit or a construction loan, but only if you can prove

that you increased value to your residents. So that is a change in this tax law. Before the Tax Cuts and Jobs Act was written into law, you could write off the interest paid on a home equity line of credit. But now you have to be able to prove that you didn't just use your home equity line to take a vacation and buy some new clothes. You have to actually have improved the physical residents that you live in.

That's one caveat in this new tax law. Yeah, or even if you use that loan for something more noble, right, like to put your kid through you know, like a nice college or something like that. It's kind of a bummer. But yeah, fact is they want to see that you've taken that loan out specifically for the increase to your residence. Something else to mention that happened as well with the Tax Cuts and Jobs Act. Doesn't that just roll off

the tongue, Joel, It's so easy to say. But there's a new ten thousand dollar cap on property tax due to the new federal law. So if you get that to ninety eight and it has your mortgage interests and buy a chance your property taxes are more than ten thousand dollars, well it doesn't matter because there's a cap at ten thousand. And the other thing too, man, is that that's the total between your state, local and property

taxes collectively. And so that's sort of a downside to the new law is that you'll be able to itemize less of that. It's called salt rights, state and local tax Yeah, that's something to be aware of when you're doing the quick math here to to figure out if you should automize your deductions and so, in particular for real estate investors, it's likely that you have loans associated with your properties and potentially a line of credit or

something like that as well. And in addition to that interest that you're paying, you can also deduct depreciation, operating expenses, and repairs. So real estate investors really do, honestly have it have it good. They've had it good for a long time under the tax code, and that continues to be the case. So if you own a home with a mortgage, consider atomizing your taxes. Also, if you have paid some huge medical bills, and consider itemizing your taxes.

The only downside to this, though, is that you can only deduct your medical bills once they've exceeded seven and a half percent of your adjusted gross income foren For example, if you had an adjusted gross income of fifty thousand, that means the first three thousand, seven hundred fifty ours that you've paid towards medical bills effectively don't count. And so once you get past that threshold, anything that you pay beyond fifty you can deduct every single dollar of that.

But before you go through all your doctor's bills and prescription receipts, you know, do the quick math, make sure it's worth it, yeah, Matt. And also you can deduct your health insurance premiums, but only if they were paid with after tax money. So it's really important for people to consider if they did have a more expensive health care policy, even if they got it through the exchange.

That could be one quick check mark in the column of it being much more likely that it's better for you to itemize as opposed to taking the new standard deduction. And another huge potential deduction is charitable giving. Just keep in mind that this has to be to an actual five oh one c three, not just some organization or political party or an individual that you decide to give money to. That does not count to me, giving you

like all that money last week, that doesn't count. I think that falls under the category of one time annual gift, which I believe it is that fourteen thousand. That's true where it used to be. But yeah, so keep that in mind. You can do either cash contributions or even non cash contributions like cars, you know, different things like that. Have you ever donated something big like a car or a boat? It's a goodwill. No no boats, no boats,

no cars either. And actually, just on that note, if someone is thinking about donating a car for tax purposes, the I R. S is really cracked down on recent in recent years on on car contributions, and so it's actually would in all likelihood be better for you to sell the car, take the money from that, and then donate that money to a charity of your choice as

opposed to donating the car. And actually many times it's better for the charity as well, because a car that's not working on whatever that there's so many logistics involved in that, like what do we do with this? Yeah, I don't want this old Nissan. But the the i RS is really cracked down on what they're allowing you to write off when it comes to a car donation. And so those are the three biggest things to consider if you have a mortgage on a house, big old

medical bills, and charitable giving. Quickly do the math on those three categories, and if you exceeded your threshold, you know on what you would receive with a standard deduction. You want to seriously consider itemizing your taxes because chances are you're gonna be able to find some additional deductions that we're not mentioning here. There's there's lots more. These are the three that you should consider when you're kind of weighing the options as to whether you should take

the standard deduction or if you should itemize your taxes. Yeah, do the quick general back of the envelope math to see if you're anywhere close, and then if you are, if you are close to that either twelve thousand or twenty four thousand dollar number, whether you're filing single or or filing as a married couple, if you find yourself in that ballpark, that's when you're gonna want to do the specific math in order to make sure that you

are filing taxes the best way for you. Honestly, to a lot of folks, that sounds like a lot of work. They're like, well, how am I supposed to do quick math and figure out these things? And Man, what I would say to that is, this is a huge argument for tracking your spending because at the end of the year, if you've been tracking your spending, you can quickly see how much you've paid towards your insurance premiums as well

as to your medical payments. When it comes to your house or your mortgage, you'll receive it to ninety eight, so you'll easily be able to see what your interest payments were and you'll also see what your s grow paid towards your property taxes. And then the same thing with the charitable giving. If you have been tracking your spending, you should be able to easily add up at the end of the year and see how much you've given away and those three or four numbers. I guess the

mortgage has two numbers. You can add those together and yeah, and quickly see how close you are to that standard deduction. Yeah, Matt, and I think one important tip that actually really changed for people the way that their behavior is, especially the way that they consider their charitable giving, is if you're anywhere close to that threshold but you're not over it, consider bunching your deductions and itemizing that year. And then the next year you have fewer itemized deductions, and so

you just take the standard deduction. And the way that most people are going to be able to accomplish that, because you can't usually change the amount of interest you're paying on your mortgage, right, is to bunch your charitable giving. And so let's say you're at roughly turs in deductions as a married couple, will consider taking the standard deduction this year and giving less to charity in nineteen and in give two years worth at the same time and itemized.

So that's one way that people are approaching this new tax law is kind of by bunching their giving. And you and I were huge fans of generosity. We think it's really important. It's really important for us psychologically as we think about our money. And we did an episode on that back in the day, and so you know, we're not encouraging people not to give or not generously, but we are saying it might make sense. And I

did this right when the tax law was signed. I gave an extra lump sum of what I knew I was going to give that following year, uh to to to a nonprofit organization. I gave it in one fell swoop that December because I just wasn't sure whether I was gonna be able to itemize or take the standard deduction the following year, and I just wanted to make sure that I got it in there before that tax

law changed. Yeah, And so another example of that, Joel, is that you know, say, you know that you are going to itemize this tax twenty nineteen, so you're gonna give like you normally would in twenty nineteen, but then you're gonna give your why twenty contributions to charitable giving, say in December, right right before the year ends, And so that way it impacts the organization less as well, because it's you know, closer to the end of the year, is closer tow but it still falls on the nineteen

tax year, um. And so yeah, bunching it's great. It's great for a charitable giving. Another way that you can consider bunching as well as with medical expenses. If you have some flexibility when it comes to an expensive procedure, say dental work, or maybe you have like a partially torn a c L or something like that, Well, we know you would never get them to work done. So I'm just gonna live with that partially torn a c L for the rest of my life and jacked up too.

But you know a lot of times some of those procedures and surgeries you can put off. I know guys that play sports and they've got a jacked up shoulder and they're living with that for a couple of years. So there's some flexibility when it comes to when am I actually gonna have this procedure finally done? And so if you know that there's gonna be a specific year that you probably are going to have some more medical expenses,

that you might have some more charitable living well. Like like we said, bunch all that that that one year, right, So let's say so it's nine. Now, let's say, okay, let's try to put off that procedure, that medical procedure. If you can last until man, make twenty the year that you get all the work done, you get your teeth fixed, you do the medical procedures, that's when you

double up on your charitable giving. I mean, it sounds funny to talk about this, right, that we would be strategic about our giving and that we would be strategic about our medical expenses. But these are all things to consider. And if it honestly, if it doesn't really hurt, literally, if it doesn't hurt that much for you to to

to put off, consider doing that. Because you might one year take the standard deduction, get that twenty four thousand as a married couple or twelve thousand, say as an individual. But then the next year you might be able to blow that standard deduction out of the water and drastically decrease your adjusted gross income, which effectively reduces how much taxes you're gonna pay. Yeah, So bunching is just a great way to consider your taxes and and just start

thinking to planning ahead, planning for the future. Am I gonna get that surgery? How much do I want to give this year? How much do I want to give over the next three years? And then how am I going to spread it out? Did all this talk about bunching makes me think of honey bunches of Votes? Did you ever eat that? Now? It's pourable right now? That was like my all time favorite cereal in college? That's your all time favorite cereal? Yes? Did you live in

deprived childhood? Now? I would I would much rather take honey bunch of Votes over cinnamon toastcrunch because as a child, that's what I grew up eating. Are you kidding me this? I feel like I need to walk away from this podcast episode right now? What do you eat as a kid? Well, okay, so we weren't able to have the terrible cereals often, but I love me some cocoa puffs, I love me some tricks obviously, cinnamon toast crunch, yeah, that's that's all

sugar though, and occasionally cookie crisp. Okay, yeah, wait, we did the cookie Crisp. They had the good commercials, cool Crisp. I still remember that giant but honey bunch of votes. Man, I rock that so hard. In college, you would have your favorite cereal would be a healthy one. It's not healthy. It's super sugary. It has the flip favor of like oats, but it's sweet. Oh, it's kind of like beer. Honestly, it's kind of like ODI and kind of grainy and

multi good stuff. I'll take that under consideration. All right, So after the break, Matt, let's get to my favorite part of this episode. The tax credits. And tax credits can make a major impact on the final amount that you pay every year to the federal government. So we'll get to that right after this, all right, Joel, like you mentioned, let's dive now into tax credits. So far this episode, we've been talking about itemizing, We've been talking

about actual deductions. Now we're gonna talk about tax credits. These are credits that you can take regardless if you itemize your taxes or if you take the standard deduction. And so the biggest difference between a tax deduction though versus a tax credit, is that deductions reduced the income that you pay taxes on, which you know, then reduces the amount of taxes that you owe, while credits themselves

directly reduced the amount of taxes you owe. And so this is a literal dollar for dollar reduction on your tax bill, which has a much larger impact. Yeah, And tax credits change over time. Right. They They are often incentives at the federal government or your local and state government put into place to incentivize certain behavior. So, for instance, there was the there was an eight thousand dollar tax credit to people that bought a home back in two

thousand and nine. And there's an electric vehicle tax credit for people to buy e v s, but that just got reduced recently. Right. There are tax credits for people to buy solar panels. They're all sorts of tax credits, and they change over time, and sometimes the amount that they pay out gets reduced over time based on how

many people will have qualified for that tax credit. Will go through some of the most common ones that kind of have hung around through the years and help you kind of understand them and get an idea as to whether or not you might qualify. Ye man, and real quick, I wanted to mention. How So, tax credits they can either be nonrefundable or refundable, right, and so if they're only nonrefundable, that means they only will decrease the amount

of the tax that you owe. Versus refundable tax credits, they actually add to the amount that you get back. And so an example of that one is the earned Income tax Credit, and this is a tax credit that you can take advantage of if you have a job, but maybe you are only earning a you know, a low to mid income salary. An example of this though, is that say you're single and you've got one kid, and then as if you make less than forty dollars, you can get up to thirty dollars in credits. And

again this is a refundable tax credit. So say you owe actually zero dollars on your tax bill and you qualify for this specific version of this credit, that means you're gonna get a check for thirty four hundred dollars, which is huge. It's I mean, it's free money. It's

it's amazing. Another example is the Lifetime Learning Credit, and this is available to pretty much anybody that's going to like higher education, and you can get credit for of the first ten thousand dollars that you spend on higher education. So in that example, you get two thousand dollars credited. And keep in mind this is to your final tax bill, and so it doesn't reduce your adjusted gross income down two thousand dollars. This has an impact on the amount

that you oh in the end, which is so much better. Yeah. So if you owe three thousand dollars and you qualify for this lifetime learning tax credit and you max that out, boom, your tax bill just went from three thousand dollars down to one Like that is huge. That is huge. Yeah, and let's cover my favorite tax credit map, the retirement Savers tax credit. I figured that was gonna be your favorite.

So again, often these tax credits are mostly created for low to low to middle income folks, and the retirement Savers tax credit, depending on the amount of dependence that you have, is also typically targeted towards those folks as well. And you can earn a tax credit based on ten to fifty percent of the amount that you contributed towards your retirement accounts at the end of the year from

the federal government. And so I think even a family of four with a moderate income can qualify for this savers tax credit and can potentially essentially get free money from the government to incentivize their retirement savings, which is super cool. Yeah, man, like get that tim percent bonus on your on your taxes, right, and so yeah, some

specific numbers for that, right. So let's pretend you're married, and if you have an adjusted gross income less than thirty eight thousand dollars, which isn't a ton in that instance, you can get a tax credit of fifty percent of your contributions fifty percent, which is huge, right, So you contribute five thousand dollars, you're getting a tax credits at the end of the year, and it's there to to modify behavior, like you mentioned, Joel, to incentivize and it's

there to help folks out. Yeah, And so there are lots of other tax credits. We can't go into all of them, but there's one four people that adopt. There are other tax credits for people pursuing education. And there are also a lot of different tax credits for people pursuing home energy efficiency. And I believe twenty nineteen is the last year to get the full tax credit for

putting solar panels on your home. Every year from here on out, the tax credit for solar panels is going to down, And like I said, that's kind of the way some of these tax credits work. The retirement savers tax credit has been around for a little while, but many of them shift over time, and it's best to kind of stay up to speed on what tax credits are currently in existence. We just covered kind of some of the highlights here. Yeah, man, that's right. Yeah, they're

the highlights. Uh. And there are ones that you want to consider because they can apply to a lot uh of folks, potentially a lot of our listeners right now. All right, Matt, So let's quickly get to where people should file their taxes because that becomes a question for

a lot of people. And like we said last weekend a little bit this week, we're more than okay with you finding an accountant or cp A that does tax to help you with your taxes, because it can be crucial, right and potentially save you more than you're paying that individual because of their expertise. But if you feel especially if you have a basic return, something that's easy and you feel comfortable doing it yourself, we would say i r S Free File is a great place to go.

We'll put the link to the free file website in the show notes and free File. Essentially, the i r S compiles a list of companies that will give you access to file your federal return for free, although it is based partially on your income. And another great resource is Credit Karma Tax and now we love credit Karma for following your credit score and kind of keeping up

speed on that. But Credit Carma recently a few years ago came out with Credit Carm Attacks and that's a free tax filing resource for people of all incomes, which I love. And another option too is that this is the first year that we are getting the simplified tax filing set up right, the new ten forty is this postcard size sheet front and back, and that's supposed to simplify the tax filing process make it much easier for

a lot of folks. So consider that. I mean, the idea is literally you can get that card at either a local post office or library by the way, dude, libraries for the win yet again, right always, But you take that card and you can fill it out front and back and then your boom, You're done, right, like, that's amazing, and so this is the first year that they've implemented this new in forty So consider that, and especially if you're in the n of folks that are

in all likelihood gonna take the standard deduction and your taxes are pretty simple, then really considered hopping over to your library, grabbing that form and sending it in. It should be just really simple and not taking much time. Not only time, right, but it can save you some money if you're looking to actually have your your taxes filed professionally. Hopefully we're able to sort of simplify that the tax filing process, right and how you go to

go and think about it. And you know, once you kind of understand some of the larger concepts in the different ways that you can reduce the amount that you are going to pay towards taxes, then it just it kind of makes it easier, kind of makes it easier for me to wrap my head around it, and it makes it easier to plan ahead to make sure that

over the next few years you're kind of optimizing. And again, like we said in last week's episode, you don't want taxes to kind of be the tail waggoning the dog. But you do want to take that into consideration because tax taxes are one of the biggest expenses in your life. And anyway that you can reduce those taxes at whether that means bunching or taking advantage of tax credits that you didn't know existed, that those are things that you

should take advantage of. That's right, man, most deaf. And let's talk about the beer. What do you think? So? Yeah, we're drinking Dark Reckoning by Morgan Territory Brewing and this was an Imperial Porter. Yeah, donated by Brents from out in California. Brent, thank you so much for this beer. Man, it is fantastic. And dude, this is like an award winning beer as well. To be honest, man, this is one of the best porters I've had. It's really really good.

The word I used to describe it was robust, and it is. It's just full flavored. It's a big beer, and oftentimes porters can be a little thin. Yeah, and this one had this really nice, beautiful mouth feel. I really enjoyed this one. Mouth Field is correct. Yeah, I said thick because not because it's a thick beer, because porters are thinner than stouts, but it had a thick flavor.

This kind of goes back to the one time where I said, jacket has my word, but it kind of I felt like my tongue was wrapped up in flavor, which, by the way, most awkward episode moment yet, I think, not awkward. You're making an awkward jowl. But there's just some flavor in this, and a lot of times you don't get a lot of flavor out of a porter. Uh. And so if you like a drinkable, flavorful, dark beer,

porters man, they are for you. And this porter in particular is a Baltic style porter and nice and toasted chocolate e get some smoky notes there as well. This is fantastic. This is a great beer to have here in uh in cold January. All right, Matt, let's tackle

our final thoughts. And there's three main things that you really need to consider as we finished this episode on tax tips, credits and deductions, and particularly if you are a homeowner, if you have a mortgage, and especially if it's a recently taken out mortgage and you're paying higher amounts of interest, or if you're a real estate investor with multiple mortgages, you are more than likely going to be better off itemizing as opposed to taking the standard deduction.

That's a really important thing for you to consider before you make that choice, that's right, man. And something else to consider is if you've paid some very large medical bills, not only direct bills to a doctor or a hospital, but your insurance premiums as well. The third piece of the puzzle is charitable giving, and the more that you've given to charity, the more likely it is that you'll be itemizing your deductions as opposed to taking the standard deduction.

And remember, it's kind of a pie. It's all three of these things fitting together. And however they get you over that dollar mark as a married couple, or twelve thousand dollars as a single individual, or eighteen thousand dollars

as a head of household. Don't leave those folks out too. Yes, uh, that will get you to the point where you want to itemize as opposed to taking the new standard deduction, and a quick back of the envelope math session will help you at least realize whether it's worth considering or not.

And if you're really close to that threshold we mentioned bunching man, consider that as a tactic, right, as a strategy that you can employ to maybe hold off one year and go ahead and take advantage of the standard deduction. And then the next year, when you know that you're going to have maybe some big charitable giving, some big medical expenses, that can be the year that you decide to itemize your deductions. That's when you're gonna want to

bunch all those expenses. And say, Matt and I covered some tax credits that you need to be aware of, and will put links to the I R S page for some of those tax credits in the show notes. It's just really important to consider them. Some simple modifications to your behavior can mean big money back on your taxes. Yeah, man, And keep in mind that these tax credits have a

dollar for dollar effects on your tax bill. This doesn't just lower your adjusted gross income, but it actually reduces your tax bill by that amount, which makes them so much more valuable. Yeah. I know, taxes can be confusing. I mean I get confused by the tax code, the ever changing tax credits, the new tax law. I mean,

there's so many things to consider. But hopefully we gave you enough of an overview to help you understand a little bit more about how the tax system is structured, how you can take advantage of the way it is currently constructed, so you get to keep more of the money that you make. That's our goal. Yeah, man, that's right, and so I think that is going to be it for today. Be sure to check out our website, how Some Money dot com. We'll have our show notes up

there for you. Yeah. And if you you like this podcast, if you found it helpful, if you found this episode helpful, share it with a friend, or please leave a review on Apple Podcasts or wherever you listen to your podcast. Matt and I would really appreciate it. It It helps get the word out to potential listeners. Until next time, Buddy, best friends out, Best friends out due to the Tax Cuts Jobs Act. Say that three times fast,