The IRS Deductions Blog

Archive for March, 2008

Question: Is there a company that can do my taxes? I am in Iraq and I have a lot of uncommon deductions.?

I have looked at all of the online sites and I could not find a way to list all of my various deductions. Is there somewhere that I can talk to an actual person and they will file for me?

Answer: I’ve used TurboTax online for years (you don’t even need to go buy the “box”). Just google it and go into their website.

It’s been great. It will walk you through everything. I usually have one of two things I have to go call about to get exact data, but the systems works great. We too have some us usual items.

After you’ve done your first year it will save a lot of your data for the following year so that you will have fewer data entry tasks. Good luck.

If you are in the military, thanks for serving !

Items on Amazon Right Now for Company Tax Deductions:

5 Small Businesses Tax Tips for 2010 from DebtGuru.com

Start preparing for next year’s tax season now to make it much easier for tax time. Find many more tips on the Debt Guru blog at http://www.debtguru.com/finances/top-twelve-tax-tips-for-small-businesses.

Tax Deduction Tips for Businesses : Sub Chapter S Corporation Tax Tips

Question: is there a way to claim college tuition on your taxes if you don’t itemize deductions?

If I want to pay college tuition for my son, 26, who lives in another state and is not my dependent, can I claim this on my taxes next year? I don’t itemize deductions. I remember seeing something about college tuition on page 1 of the 1040 form when I last did my taxes — so if it’s on page 1, that’s not itemizing, right? And if I can claim it, how does it work? Will it reduce my taxable income by the amount of the tuition? Or is there some formula and you only get credit for a fraction of it? I currently claim head of household standard deduction. How can I work out how much taxes I’ll save for each dollar paid in tuition?

Answer: You cannot get a federal income tax benefit by paying a nondependent’s college tuition.

However, if you give your child the money for college tuition, and he pays college tuition with it, he can get a tax benefit.

The benefit is taken by using the Tuition and Fees Deduction or an education credit (Hope or Lifetime Learning). These benefits do not require that the taxpayer itemize.

The benefit can be from zero percent up to 100 percent of the expenses paid, depending on the taxpayers tax circumstances, the amount of expenses paid, and the benefit used.

Or, you could establish a 529 plan for your child, by funding the account with the college tuition money, and then using that money to pay the tuition. This will not give you a federal income tax benefit, but it may give you a state tax benefit depending on the state you live in.

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As tax time looms, public advised to get prepared

By Leigh Kelley Times-News Staff Writer The economy is not changing how taxpayers file this year, a local tax expert said, but has drastically increased the number of incentives available.

Considerations for Senior Taxpayers

Question: Can my employer cancel the Flex Spending sec125 plan 1 month into the year?

My employer is changing over to a High Deductible Health Plan and therefore must cancel my Flexible Spending Account in favor of a Health Savings Account. Our HR department is refusing to roll over my balance on my FSA into a HSA.
What happens to the unused portion of my contributions to the Spending Account? If I go with this plan, my wife will also be on the insurance and will lose her contribution to her FSA.
Am I eligible to use my entire years allotment? Or do we lose our $150.00 we have already contributed?

Answer: They will or should return any FSA deductions that came out of your check although they may be less because they are subject to Federal Tax withholding now. I feel for you, wife and the payroll administrator who has to fix all the deductions!

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Expect varying options, high premiums if you ‘go it alone’ for health insurance

President Obama hopes his summit, will get Congress to find a compromise on health insurance reform. If it fails, what’s out there, if you “go it alone” — rather than getting insurance through your boss or Uncle Sam?

HSA Health Insurance Introduction

Question: How are mileage deductions handled on 1099-MISC forms?

I was paid mileage by a company I did some contractual work for in 2006. This mileage was paid to me at the IRS reimbursement rate by the contractor for all of my mileage. My total income including the amount of mileage I was paid for was all included in the 7. Nonemployment compensation box of my 1099-MISC form and I want to verify that this is correct. Should paid mileage be taxed the same as income?

Finally, for future reference is it more beneficial for me to simply take a deduction from the IRS instead of being paid by the contractor for mileage?

Thanks in advance.

Answer: If you are an independent contractor then all the compensation that the company paid you for is income to you. You should report the income paid to you on the 1099-Misc on a Schedule C, and then you would also be able to claim the mileage that you were paid for as an expense under auto/truck expenses. The mileage rate for 2006 was .445 per mile. You would be only able to claim the actual business miles that you drove for the contractual work. And as for it being more beneficial for you to simply take a deduction from the IRS instead of being paid by the contractor for mileage, unless the income tax rate ever goes up to 100% tax you’re better off being paid by the contractor.

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Workers Get Lower Mileage Rate in 2010

Millions of workers who use their cars for work will get a smaller tax deduction next year under a new IRS rate.

2009 Mileage Rates Increasing For Tax Deducations

Question: MIleage reimbursement/tax deduction?

I know that the federal rate for tax deduction is 58 cents per mile driven for work related expenses. For my job, I have to take consumers from their home to doctor appoints, grocery shopping etc, and my company only reimburses me 34 cents per mile. Can I deduct the missing 24 cents per mile on my taxes if I have proof of my mileage driven?

Answer: Yes, if you have a log book with dates time and miles on the vehicle at start and finish of the jobs.

Items on Amazon Right Now for Mileage Tax Deduction:

Legislators receive $3,203 pay hike for 2009

The House and Senate There were no roll call votes in the House or Senate last week. Beacon Hill Roll Call this week examines the 2009 salaries and other benefits received by the Bay State’s 160 state representatives.

Tax Deduction | Tax Filing Tips For Faster And Easier Filing By Drew Miles