Would `Bunching' Your Tax Deductions Work for You?

By Linda Stern 1994, Reuters News Service | St Louis Post-Dispatch (MO), March 7, 1994 | Go to article overview

Would `Bunching' Your Tax Deductions Work for You?


Linda Stern 1994, Reuters News Service, St Louis Post-Dispatch (MO)


As the standard deduction creeps up and mortgage interest payments creep down, something surprising is happening to many tax returns: People who always thought they would be itemizing deductions are finding themselves in a position where it doesn't pay for them to do so.

They're taking the standard deduction, but they are still regretting the deductions they can't take.

Now, tax advisers are recommending a new solution that can keep people from losing deductions. "Bunch" deductions together every other year, they suggest. Itemize in those years when the deductions are heaviest, and take the standard deduction in between.

Marvin Weisbrod, vice president of technical services for Triple Check Income Tax Services, suggests using this every-other-year approach to maximizing your writeoffs.

This plan goes a step further than first-generation "bunching" techniques that tax experts started talking about a few years ago when Congress put floors on miscellaneous deductions and raised the floor under medical deductions.

Under current tax laws, miscellaneous deductions are only deductible to the extent that they exceed 2 percent of adjusted gross income. Medical expenses are deductible to the extent they exceed 7.5 percent of your adjusted gross income.

So the pros have been telling us to "bunch" these deductions. Pay insurance premiums so that they fall more heavily in alternative years. Use those years to replace your contact lenses, catch up on all of your routine checkups, and time, to the extent possible, your voluntary medical expenses to fall more heavily in these alternate years.

H & R Block's Income Tax Guide, for example, lists more than 100 deductible medical expenses you might not have thought were legitimate, like special mattresses, lead paint removal, chiropractic fees and birth control bills.

Miscellaneous deductions are similarly "bunchable." Every other year, go down the list of possibilities, from safe deposit fees to professional magazine subscriptions to tax preparation charges. In many cases, the person you are sending these fees to may be bunching his or her own return and would be happy to coordinate alternative years with you.

But these special-situation deductions are limited in scope and not the most productive places to bunch. For that, determine if you are a borderline standard-deduction user.

If you are, bunch as many deductions as possible in the alternative years when you don't take the standard deduction. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Would `Bunching' Your Tax Deductions Work for You?
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.