CF Income Tax Deductions

Simba15

Simba15

Member
I just took income tax deductions for the first time for food and electricity for CF. I would like to hear from others how you arrived atthe amount or % to deduct. For electricity we took a % - however, I have to run a/c in summer non stop due to CF so should probably take more. My accountant told me that for food I can deduct the obvious: protein shakes. But to compute the difference beween regular and organic fruit and the difference can be deducted. This is complex. I can't compute this every time I go to the grocery store. Thoughts?
 
Simba15

Simba15

Member
I am now on a computer. I can see the video. I already saw this. It doesn't answer the question. It is too vague.
 
J

juliefaler

New member
I did this back in 2011. I went to the USDA website and got the "Offficial USDA Food Plans: Cost of Food at Home at Four Levels, U.S. Average 2011."
It uses your age - gender group. There are 4 levels, and a weekly cost and monthly cost. You need to decide which level, age group you will use. (It is based on individuals in a 4-person family.) So you need to adjust. ( adjustments rates are on the bottom of the form) For example. a female in the 19-50 age group on the thrifty plan, weekly is $36.20 up to $71.89 on the liberal plan.
For 1 person family you would add 20%. So on the thrifty plan $36.20 *1.20 = $43.44, (new weekly rate x 52 weeks = $2258.88) That would be the average cost for a female in (19-50 age group) in a one person family for a year.
You will need actual receipts for a 2-week period so you can get a biweekly average. (I believe this is what the CFF recommends). So if your actual receipts for two weeks come to $200 x 26 = $5200 (your yearly cost)
Your cost of $5200-2259(Average cost) = 2941 that is the cost over the average person that you should be able to add to your medical expenses.
(This was back in 2011, you need to get the updated form) You will probably want to do this in a spreadsheet. And you might want to do 2 separate biweekly actual receipts averages to see if there is a huge difference. And if you eat out a lot, you probably should use one of the other plans beside the thrifty plan.

For electricity all the machines should have the voltage on the back of them. Your electric bill should have the rate they charge. Then decide how much you use them daily etc. From that you should be able to figure its cost.
 
H

hjmomva

New member
Just FYI. The threshold has changed from those amounts over 7.5% to now over 10% AGI. Only amounts over the 10% threshold are deductible.
 
D

Dank

Guest
Hm. never even considered trying to get deductions on my taxes for medications or electricity. Does anyone else keep track of medication totals throughout the year? I think there's a specific thing for this, I just never looked into it because I figured it would be overly complicating after factoring in insurance costs and copays.
 
Simba15

Simba15

Member
Thank you Julie. Question. You said:

$200 x 26 = $5200 (your yearly cost)
Your cost of $5200-2259(Average cost) = 2941 that is the cost over the average person

where are you getting the 26 from? where are you getting the 2259 from?
 
J

juliefaler

New member
I used actual receipts for 2 weeks. There are 52 weeks in a year. 2 x 26 = 52. (That is where the 26 came from)
The 2259 was a rounded number from $2258.88.
I use rates from 2011. They were from the thrifty plan. I chose the weekly rate of $36.20. (this came from the USDA 2011 form) this rate was for a individual in a 4 person family because I was doing this for an individual in a 1 person family it said to add 20%. so 1.20 x 36.20 = 43.44. That would be the weekly rate for a individual in a one person family. The yearly amount would be 43.44 x 52 = $2,258.88 this is the average amount for a one person eating at home on the thrifty plan. I recommend setting this up in a spreadsheet. I believe at least in 2011, the CFF recommends keeping receipts for a 2 week period and using that to get your average.
It is confusing. But this is how I understand how it works.
 
J

juliefaler

New member
You should be able to get a yearly summary of your cost (out of pocket) and well as your Insurance cost from your Pharmacy. I know CVS as well as Walgreens does this.
 
Simba15

Simba15

Member
Thank you so very much!!!!! :)
juliefaler said:
I used actual receipts for 2 weeks. There are 52 weeks in a year. 2 x 26 = 52. (That is where the 26 came from)
The 2259 was a rounded number from $2258.88.
I use rates from 2011. They were from the thrifty plan. I chose the weekly rate of $36.20. (this came from the USDA 2011 form) this rate was for a individual in a 4 person family because I was doing this for an individual in a 1 person family it said to add 20%. so 1.20 x 36.20 = 43.44. That would be the weekly rate for a individual in a one person family. The yearly amount would be 43.44 x 52 = $2,258.88 this is the average amount for a one person eating at home on the thrifty plan. I recommend setting this up in a spreadsheet. I believe at least in 2011, the CFF recommends keeping receipts for a 2 week period and using that to get your average.
It is confusing. But this is how I understand how it works.
Click to expand...
 
Simba15

Simba15

Member
Ok I don't get it. Iwent here http://www.cnpp.usda.gov/Publications/FoodPlans/2014/CostofFoodJan2014.pdf

My monthly amount is $301.70 x 20% = $362.04 for the month.

Now what do i do??

juliefaler said:
I did this back in 2011. I went to the USDA website and got the "Offficial USDA Food Plans: Cost of Food at Home at Four Levels, U.S. Average 2011."
It uses your age - gender group. There are 4 levels, and a weekly cost and monthly cost. You need to decide which level, age group you will use. (It is based on individuals in a 4-person family.) So you need to adjust. ( adjustments rates are on the bottom of the form) For example. a female in the 19-50 age group on the thrifty plan, weekly is $36.20 up to $71.89 on the liberal plan.
For 1 person family you would add 20%. So on the thrifty plan $36.20 *1.20 = $43.44, (new weekly rate x 52 weeks = $2258.88) That would be the average cost for a female in (19-50 age group) in a one person family for a year.
You will need actual receipts for a 2-week period so you can get a biweekly average. (I believe this is what the CFF recommends). So if your actual receipts for two weeks come to $200 x 26 = $5200 (your yearly cost)
Your cost of $5200-2259(Average cost) = 2941 that is the cost over the average person that you should be able to add to your medical expenses.
(This was back in 2011, you need to get the updated form) You will probably want to do this in a spreadsheet. And you might want to do 2 separate biweekly actual receipts averages to see if there is a huge difference. And if you eat out a lot, you probably should use one of the other plans beside the thrifty plan.

For electricity all the machines should have the voltage on the back of them. Your electric bill should have the rate they charge. Then decide how much you use them daily etc. From that you should be able to figure its cost.
Click to expand...
 
J

juliefaler

New member
The yearly average amount on that plan should be 362.04 x 12 = $4,344.48.
Next step is to accumulate 2 weeks of groceries receipts. For example if your receipts totaled $200 for 2 weeks. Your yearly amount is $200 x 26 = $5,200.

Then you take your cost $5200 - $4,344.48 (average cost) the difference = $855.52. The difference is what you can add to your other medical expenses.

Also don't forget to add medical mileage to your medical expenses. Every time you go to dr, dentist, pharmacy, counts or any other place that is medically related.

Now that they raised it to 10% of your Adj gross income is gets more difficult to get these medical deductions. And I think there are certain caregiver expenses that you can deduct also.
 
J

juliefaler

New member
The yearly average amount on that plan should be 362.04 x 12 = $4,344.48.
Next step is to accumulate 2 weeks of groceries receipts. For example if your receipts totaled $200 for 2 weeks. Your yearly amount is $200 x 26 = $5,200.

Then you take your cost $5200 - $4,344.48 (average cost) the difference = $855.52. The difference is what you can add to your other medical expenses.

Also don't forget to add medical mileage to your medical expenses. Every time you go to dr, dentist, pharmacy, counts or any other place that is medically related.

Now that they raised it to 10% of your Adj gross income is gets more difficult to get these medical deductions. And I think there are certain caregiver expenses that you can deduct also.
 
J

juliefaler

New member
When I used the thrifty plan it was for example purposes. According to the USDA publication, the Thrifty plan is used as a basis for Food Stamp Allocation
the Low cost plan is used by bankruptcy courts in determining food expenses. The DOD uses the Liberal plan in determining its BAS (food) for service members. If your income is 6 figures, the thrifty plan might be a tough sell to the IRS in an audit. It comes down to a personal choice which plan you decide to use.
 
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