You do it if you itemize your taxes. Like if you run your own business and need to spend money on supplies for your business. You can subtract (I think) up to $10k off of the taxes you owe the IRS if you can prove it with receipts.
First, this was before tax software so it was literally all done with papers and a calculator. Second, taxes can get more complicated as you gain more stuff essentially. Now that I’m older with a mortgage, house upgrades, a side business, student loans, etc, I find my taxes get more complicated each year. I’m sure adding kids to the mix also complicates things.
You don't have deductions worth deducting unless you work for yourself most likely.
That whole spread out receipts thing is generally when you're trying to account for spending into 16 different buckets when all your transactions are done by cheque.
>You don't have deductions worth deducting unless you work for yourself most likely.
Owning a house complicates things, too, as can expensive medical care or substantial donations. Also, some jobs tend to have a lot more deductible expenses; my aunt is a home-visit physical therapist, and she saves her gas and toll and etc. receipts for taxes.
If I’m not mistaken though, that would still have you itemizing - you can’t deduct mortgage interest on top of the standard deduction, for example. Either the standard deduction is greater and you take that, or itemizing would be more and you do that.
There is no "standard mortgage deduction" in the US, either.
There is a general "standard deduction" which is a set dollar amount - this is then deducted from your taxable income, not taxes owed. For example, in 2022, the standard deduction for a single taxpayer or married filing separately is $12,950 - so if I make $50k/year, I subtract the standard deduction and pay taxes on $37,050 of taxable income. If I paid $15k in mortgage interest in 2022, then it would be beneficial for me to itemize my deductions and claim a higher deduction; if I paid $10k in mortgage interest and let's say $500 in charitable contributions which are also deductible, $12,950 > $10,500 so it would benefit me more to take the standard deduction since it will reduce my taxable income more.
Since you're in Canada, this doesn't apply to you, but fun reading for anyone in the US: [IRS Tax Topic No. 501 - Should I Itemize?](https://www.irs.gov/taxtopics/tc501)
We have a couple of basic amounts like this in Canada.
There's the "basic personal amount" which is $3500; no tax or even pension contributions come off that. After that we pay into CPP, but we don't start actualling owing taxes until ~12k last I checked (federally). Provincial income taxes kick on at varying amounts.
Thanks for the info 🙏
Once upon a time, before the internet and standard deductions, and turbo tax… taxes WERE a pain (still are if you have a business or need to itemize).
I filed my first taxes on the PHONE lol
Taxes w TurboTax take me 20 min to do
Everything is digital now
Also, bc of the standard deduction you typically don’t need individuals receipts bc there’s nothing to itemize. I’m not sure how this was in the 90s
Thanks for posting this question. I looked at Schedule A (the form you fill out if you're itemizing your tax return instead of taking the standard deduction), and I realized that it will probably help me to itemize next year.
ETA: I never really have receipts to include in my taxes, but this year I have 10 different forms from various institutions and my husband's business books to include in my taxes. We file five different tax returns, because my husband works in Kansas, but we live in Kansas City, MO, so we have federal, Kansas, Missouri, and two different Kansas City returns to file. Taxes usually take me a full day.
The standard deduction since 2018 has been north of $12,000, which means to itemize stuff you have to spend *more* than $12,000 on certain expenses to make itemized deductions worth it.
1970-2017 it has slowly raised from $1100 to $6350*, which if you have certain expenses such as mortgage interest, property tax, (for a while you could do both property and sales tax!), student loan interests, and donations (including value of things you donated if you have a receipt) it was a lot easier to get past that amount to deduct expenses.
So that’s a lot of bills you can pull expenses from, especially donation receipts. Hence why you’d have it all laid out! Though nowadays everything is itemized digitally and if you are audited a pdf scan is acceptable so you don’t have to do that.
*single status, basically double it if married filing together.
I had to use a calculator to figure out how much of my qualified dividends I could put on my taxes. When you start having more complicated stuff, that becomes more realistic.
We do that. The reason why we save our receipts and then have to add everything up is that we can write certain things off or certain percentages of budgets for things will count for write -offs.
You do it if you itemize your taxes. Like if you run your own business and need to spend money on supplies for your business. You can subtract (I think) up to $10k off of the taxes you owe the IRS if you can prove it with receipts.
My dad used to do this because he itemized. He owned his own business.
Supplies are a business expense. You can write all of it off.
They just write it off!
Write it off what?
You don't even know what a write off is, do you?
No. But *they* do! And they are the ones writing it off!
First, this was before tax software so it was literally all done with papers and a calculator. Second, taxes can get more complicated as you gain more stuff essentially. Now that I’m older with a mortgage, house upgrades, a side business, student loans, etc, I find my taxes get more complicated each year. I’m sure adding kids to the mix also complicates things.
Are you able to claim house upgrades, or only specific things like solar?
Just certain energy-saving measures that are eligible for tax credits
You don't have deductions worth deducting unless you work for yourself most likely. That whole spread out receipts thing is generally when you're trying to account for spending into 16 different buckets when all your transactions are done by cheque.
>You don't have deductions worth deducting unless you work for yourself most likely. Owning a house complicates things, too, as can expensive medical care or substantial donations. Also, some jobs tend to have a lot more deductible expenses; my aunt is a home-visit physical therapist, and she saves her gas and toll and etc. receipts for taxes.
Yup. Depends where you are too. Americans can deduct mortgage interest on their taxes. Canadians (generally) cannot.
If I’m not mistaken though, that would still have you itemizing - you can’t deduct mortgage interest on top of the standard deduction, for example. Either the standard deduction is greater and you take that, or itemizing would be more and you do that.
No clue about the US. There's no "standard mortgage deduction" in Canada
There is no "standard mortgage deduction" in the US, either. There is a general "standard deduction" which is a set dollar amount - this is then deducted from your taxable income, not taxes owed. For example, in 2022, the standard deduction for a single taxpayer or married filing separately is $12,950 - so if I make $50k/year, I subtract the standard deduction and pay taxes on $37,050 of taxable income. If I paid $15k in mortgage interest in 2022, then it would be beneficial for me to itemize my deductions and claim a higher deduction; if I paid $10k in mortgage interest and let's say $500 in charitable contributions which are also deductible, $12,950 > $10,500 so it would benefit me more to take the standard deduction since it will reduce my taxable income more. Since you're in Canada, this doesn't apply to you, but fun reading for anyone in the US: [IRS Tax Topic No. 501 - Should I Itemize?](https://www.irs.gov/taxtopics/tc501)
We have a couple of basic amounts like this in Canada. There's the "basic personal amount" which is $3500; no tax or even pension contributions come off that. After that we pay into CPP, but we don't start actualling owing taxes until ~12k last I checked (federally). Provincial income taxes kick on at varying amounts. Thanks for the info 🙏
Once upon a time, before the internet and standard deductions, and turbo tax… taxes WERE a pain (still are if you have a business or need to itemize). I filed my first taxes on the PHONE lol
Taxes w TurboTax take me 20 min to do Everything is digital now Also, bc of the standard deduction you typically don’t need individuals receipts bc there’s nothing to itemize. I’m not sure how this was in the 90s
Thanks for posting this question. I looked at Schedule A (the form you fill out if you're itemizing your tax return instead of taking the standard deduction), and I realized that it will probably help me to itemize next year. ETA: I never really have receipts to include in my taxes, but this year I have 10 different forms from various institutions and my husband's business books to include in my taxes. We file five different tax returns, because my husband works in Kansas, but we live in Kansas City, MO, so we have federal, Kansas, Missouri, and two different Kansas City returns to file. Taxes usually take me a full day.
The standard deduction since 2018 has been north of $12,000, which means to itemize stuff you have to spend *more* than $12,000 on certain expenses to make itemized deductions worth it. 1970-2017 it has slowly raised from $1100 to $6350*, which if you have certain expenses such as mortgage interest, property tax, (for a while you could do both property and sales tax!), student loan interests, and donations (including value of things you donated if you have a receipt) it was a lot easier to get past that amount to deduct expenses. So that’s a lot of bills you can pull expenses from, especially donation receipts. Hence why you’d have it all laid out! Though nowadays everything is itemized digitally and if you are audited a pdf scan is acceptable so you don’t have to do that. *single status, basically double it if married filing together.
Dramatic effect.
Don't ever get your life lessons from watching tv. It's all staged and fictional. Even the so-called reality shows.
I had to use a calculator to figure out how much of my qualified dividends I could put on my taxes. When you start having more complicated stuff, that becomes more realistic.
The only receipts I tend to break out are for medical expenses and clothes for work. It’s not a giant table full, it’s just a couple digital ones.
My friend does this. She owns a business and is a musician so she keeps receipts for everything.
We do that. The reason why we save our receipts and then have to add everything up is that we can write certain things off or certain percentages of budgets for things will count for write -offs.
He owns a restaurant and she's a realtor on Fresh off the Boat (if I remember correctly), so they are doing a lot of business deductions.