Important Ways to Minimize Your Income Tax

At Maicher CPA Pllc, we provide a full range of tax services to help clients reduce taxes.  There are some key rules concerning deductions for the 2020 tax year which can save individual taxpayers big dollars.  Maicher guides you as to what deductions are best in your own situation and then will prepare and file your returns to claim them.   

What are some key rules for deductions on your 2020 Minnesota income tax return?

1. Standard Deductions.  In 2020, the standard deductions for the respective types of filers are as follows: 

  • Single: $12,400
  • Married Filing Joint, or Qualifying Widow(er): $24,800
  • Married Filing Separately: $12,400
  • Head of Household: $18,650

2. Itemized Deductions in General.  If the value of expenses that you can deduct is more than your standard deduction (see above), then you should consider itemizing your deductions on you Minnesota return.  Since tax year 2018, you may claim the Minnesota standard deduction or itemize deductions on your Minnesota return.   It is also important note that you may claim itemized deductions on your state return, even if you claimed the standard deduction on your federal income tax return.

3. Specific Itemized Deductions.   For tax year 2020, Minnesota enacted its own allowable itemized deductions.  Common itemized deductions include:

  • Medical and dental expenses with limits increasing based on the taxpayer’s age
  • Certain real estate taxes on non-business real estate and with other conditions
  • Certain amounts of home mortgage interest and tied to how interest deductions are reflected on your Federal return and further subject to the date of the underlying loan
  • Unreimbursed employee business expenses 
  • Charitable contributions

These itemized deductions are claimed by filing Schedule M1SA (Minnesota Itemized Deductions).  Be alert to unused deductions from past tax years due to their exceeding deductions because you may be able to apply them to your 2020 return.    

Take-away:  Do not miss important deductions on your 2020 Minnesota return.  Maicher is highly skilled in this area so call us today for an appointment.     

 

Sources:

2020 Schedule M1SA, Minnesota Itemized Deductions – Minnesota Department of Revenue Publication.

“Minnesota Itemized Deductions,” Minnesota Department of Revenue Publication (December 21, 2020 Update).