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.
Many businesses will be able to file their 2012 federal income tax returns starting Monday, Feb. 4. Filers of forms affected by January tax law changes will need to wait until late February or early March.
The Monday opening covers non-1040 series business returns for calendar year 2012, including Form 1120 filed by corporations, Form 1120S filed by S corporations, Form 1065 filed by partnerships, Form 990 filed by exempt organizations and most users of Form 720 , Quarterly Excise Tax Return. This includes both electronic filers and paper filers.
While many businesses will be able to file starting Feb. 4, there are a number of business forms still being updated for 2012. The IRS will announce soon when individual and business taxpayers can begin filing returns that include any of the delayed forms. Processing of these forms were delayed while the IRS completes programming and testing of its processing systems to reflect changes made by the American Taxpayer Relief Act (ATRA) enacted by Congress on Jan. 2.
A full list of the affected forms is available on IRS.gov.
In addition to the forms listed on IRS.gov, filing of two other business forms is affected by the delay, but only for electronic filers. Businesses using Form 720 and filling out lines 13 and 14 cannot file yet electronically, but they can file on paper. Other Forms 720 are being accepted electronically. In addition, Form 8849 Schedule 3, Claim for Refund of Excise Taxes, is not currently being accepted electronically, but it can be filed on paper.
Additional information will be posted soon on IRS.gov.
Dues paid to professional societies related to your occupation
as a firefighter are deductible. However, the cost of initial admission fees
paid for membership 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.
BUNIFORMS & UPKEEP EXPENSES:
Generally, the costs of your firefighter uniforms are fully
deductible. IRS rules specify that work clothing costs and the costs of its
maintenance are deductible if: (1) the uniforms are required by your employer,
(if you’re an employee); and (2) the clothes are not adaptable to ordinary
street wear. Normally the employer’s emblem attached to the clothing indicates
it is not for street wear. The costs of protective clothing (e.g. safety shoes
or goggles) is also deductible.
CTELEPHONE EXPENSES:
The basic 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 (basic fee and toll
calls) of a second line in your home are also deductible, if used exclusively
for business.
DCONTINUING EDUCATION:
Educational 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 skills as a
firefighter. Costs of courses that are taken to meet the minimum requirements
of a job, or that qualify a person for a new trade of business, are NOT
deductible.
EMISCELLANEOUS:
House dues and meal expenses may be deductible. Firefighters
are often required to eat their meals at the station house. One court case
(sibla) said that the costs of such meals are nondeductible unless the
firefighters: (1) are required to make payments to a common mess fund as a
condition of employment, and (2) must pay whether or not they are at the
station house to eat the meals. Contact this office for further details on this
deduction.
Expenses of looking for new employment in your present line of
work 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.
FEQUIPMENT & REPAIRS:
Generally, to be deductible, items must be ordinary and
necessary to your job as a firefighter and not reimbursable by your employer.
Record separately from other supplies, the costs of business assets which are
expected to last longer than one year and cost more than $100. Normally, the
costs of such assets are recovered differently on your tax return than are
other recurring, everyday business expenses like flashlights, batteries and
other supplies.
GAUTO 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 as follows: (1) Give
the date and business purpose of each trip; (2) Note the place to 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.
HTRAVEL – OUT-OF-TOWN:
Expenses of traveling away 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 noting 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 expense even though only a
portion of the amount may be deductible.
