The Tax Factor was created to educate individuals and small-business owners about taxes. Let’s face it, nothing in life is guaranteed except death and taxes. Okay, maybe that sounded pretty depressing but the goal of this blog is to help you find the information to learn how to make taxes work for you. Taxes can be extremely complicated but knowing about deductions and credits can save you thousands of dollars per year.
New inductee to the Tax Preparers' Hall of Shame isn't even a US citizen......
Preparer Yolanda Mercedes Perez Lopez, 51, of Springfield, Mass., has been sentenced to 18 months in prison followed by three years’ supervised release and ordered to pay $46,300 in restitution to the IRS for filing fraudulent returns for her clients. Last November, Perez Lopez pleaded guilty to preparing false returns, making false statements to a federally insured financial institution, endeavoring to interfere with the administration of internal revenue laws, false representation of U.S. citizenship, and false representation of a Social Security number with intent to deceive.
The craziest part of the story is that Yolanda is a national from the Dominican Republic who resided in the U.S. without a valid visa. Corruption should be her middle name.
Well Yolanda, I don't know how to speak Spanish but I would like to congratulate you to coming into America and making the infamous Tax Preparers' Hall of Shame.
Dues paid to professional societies related to your
educational profession are deductible. However the cost of initial admission
fees paid for memberships in certain organizations or social clubs are
considered capital expenses
Deductions are allowed for payments made to a union as a
condition of initial or continued membership. Such payments include regular
dues, but not those which go toward defraying expenses of a personal nature. However,
the part of union dues which goes into a strike fund is deductible.
BCONTINUING EDUCATION:
Education expenses are deductible under either of two
conditions: (1) Your employer requires the education in order for you to keep
your job or rate of pay; or (2) The education maintains or improves your skills
in the education profession. The cost of courses that are taken to meet the
minimum requirements of a job or that qualify you for a new trade or business
are not deductible.
NOTE: Education under taken to qualify a classroom teacher as
a school administrator or guidance counselor generally meets the criteria for
educational expense deductions.
CTELEPHONE EXPENSES:
The basic local telephone service costs of the first telephone
line provided in your residence are not deductible. However, toll calls from
that line are deductible if the calls are business related. The costs of a
second line (basic service and toll calls) in your home are also deductible if
that line is used exclusively for business.
DAUTO TRAVEL:
Your auto expense is based on the number of qualified business
miles you drive. Expenses for travel between business locations or daily
transportation expenses in going between your residence and temporary work
locations are deductible; include them as business miles. Your trips between
home and work each day or between home and one or more regular places of work
are COMMUTING and are NOT deductible.
Document business miles in a record book by the following: (1)
Give the date and business purpose of each trip; (2) Note the place which you
traveled; (3) Record the number of business miles; (4) Record your car’s
odometer reading at both the beginning and end of the tax year. Keep receipts
for all car operating expenses - gas, oil, repairs, insurance, etc., and of any
reimbursement you received for your expenses.
ETRAVEL – OUT-OF-TOWN:
Expenses of traveling way from “home” overnight on job-related
and continuing-education trips are deductible. Your “home” is generally
considered to be the entire city or general area where your principal place of
employment is located. Out-of-town expenses include transportation, meals,
lodging, tips, and miscellaneous items like laundry, valet, etc.
Document away-from-home expenses by nothing the date, destination,
and business purpose of your trip. Record business miles if you drove to the
out-of-town location. In addition, keep a detailed record of your expenses –
lodging, public transportation, meals, etc. Always list meals and lodging
separately in your records. Receipts must be retained for each lodging expense.
However, if any other business expense is less than $25, a receipt is not
necessary if you record all of the information in a diary. You must keep track
of the full amount of meal and entertainment expenses even though only a
portion of the amount may be deductible.
FCLASSROOM SUPPLIES:
Generally, to be deductible, items must be ordinary and
necessary to your profession as an educator and not reimbursable by your
employer. Record separately from other supplies, items costing over $100 and
having a useful life of more than one year. These items must be recovered
differently on your tax return than other recurring, everyday business expenses
like photocopies, books, etc.
GOTHER EXPENSES:
Expenses of looking for new employment in the same line of
work in which you are already working are deductible – you do not have to
actually obtain a new job in order to deduct the expenses. Out-of-town job
seeking expenses are deductible only if the primary purpose of the trip is job
seeking, not pursuing personal activities.
