Tax Guide Inquiries Answered

Comments on “The Individual Investor’s Guide to Personal Tax Planning 2018,” by AAII Staff, in the December 2018 AAII Journal:

Your current tax guide seems to have all the info I will need to plan my 1040 tax report. But, if you could somehow show the page numbers that will print for certain sections of your tax guide, I could print only the pages I need.
—Carol from California

As miscellaneous itemized deductions exceeding 2% of adjusted gross income can no longer be claimed, will this also be the case for the business use of home expenses?
—Rafael from Spain

I sold an income property this year. Should I pay the federal tax as a quarterly tax in January to the alternative minimum tax (AMT)?
—Nick from Rhode Island

Charles Rotblut responds:
On AAII.com, if you click on the downloadable PDF link located on the left side of the article, you will be able to print specific pages of the article.

The home office deduction is usually determined using Form 8829 or via a worksheet in the instructions to Schedule C. It is not a miscellaneous deduction. The rules regarding the deduction are specific and I would check with a tax professional to get a firm answer regarding any questions you have as to taking the deduction.

For questions about the AMT, consult a tax professional. You should also determine if the sale of the property would expose you to the underpayment penalty.

Tax Guide Updates

Subsequent to the printing of the annual tax guide in the December issue of the AAII Journal, the following correction and update came to our attention.

Alimony Rules

Alimony and separate maintenance payments remained deductible by the paying spouse and included in the income of the spouse receiving the payments in 2018.

Starting on January 1, 2019, the paying spouse can no longer deduct such payments, while the payee spouse can no longer report the payments as income. This change applies to divorces and legal separation executed after December 31, 2018, and to previously executed agreements modified after December 31, 2018, that expressly state that the tax law change applies to the modification.

2019 Mileage Deduction Rates

The Internal Revenue Service issued its 2019 mileage rates. The standard deductions are 58 cents per mile driven for business use, 20 cents for medical or moving purposes and 14 cents for charity.