Can I take a deduction for contributions made to charitable organizations?

There are two ways you can take a deduction for contributions to charitable organizations.  As always you can deduct contributions when you itemize your deductions on Schedule A of your Form 1040 along with mortgage interest, and real estate taxes and either sales or income taxes.  Note that the maximum deduction for taxes is $10,000.

If you don’t itemize deductions you can may still be able take  to take a charitable deduction for cash contributions made in 2020 up to $300 ($150 if married filing separately.

Here is a link to search whether an organization is a qualified charitable organization:  https://apps.irs.gov/app/eos/

Why is my Social Security benefit being taxed?  Isn’t it tax free?

Social security benefits are not subject to self-employment tax but can be subject to income tax depending on other income.  When your provisional income over $32,00 for married filing jointly and $25,000 for single or head-of-household taxpayers may be taxed on up to 85% of their social security or railroad retirement benefits.

Should I contribute to my company’s deferred compensation program?

Yes, put in as much as you can but always enough to take advantage of the company’s match.  Don’t leave money on the table that your company offers.  While there is a catch-up amount after turning 50 where you can contribute more each year, you can’t go back and receive the company match for missed years.  Don’t Wait to start your retirement fund.

How can I minimize my tax liability as I am a W-2 Employee and don’t have business deductions?

True, the employee business deductions are no longer allowed as itemized deductions and each year, the standard deduction is increased.  There is also a limit or cap on how much property, income, and sales tax deduction.  If you don’t max out on the property tax deduction one way to maximize your deductions is to group your property tax payments in one tax year and utilize the standard deduction the other year.  For example, in Texas, there is no income tax and your property tax bill is sent in the fall but you have until January 31^st before there is a penalty.  So, pay your 2020 property taxes in January 2021 and pay your 2021 taxes in December 2021 as long as they are under $10,000 which is the maximum deduction for taxes