We will soon be publishing a book that focuses on helping the small business owner achieve financial success. In this book, we discuss the importance of devoting the necessary time to address the business’s marketing and tax needs. Whether you are a business owner paying taxes or an individual taxpayer, it is very common to put off until tomorrow what you should be doing today. During the 1040 season, each year we see the same taxpayers who wait until the 11th hour to prepare their taxes. Waiting until the last minute could easily result [Read more…] about FINDING THE TIME TO WORK ON YOUR TAXES
Archives for March 2015
On our Sept. 23, 2014 blog posting we addressed how the PA Dept. of Revenue (DOR) is carefully scrutinizing taxpayers who claim unreimbursed employee expenses on Form PA UE-1. The PA DOR released a new publication (REV-637) on this topic in February 2015. Some points of interest from that publication include:
Listings of examples of expenses NOT considered an allowable expense include, but are not limited, to the following:
- Received a fixed mileage allowance or a per diem expense allowance and neither you or your employer included the allowance in your compensation; or
- Accounted for your expenses with your employer and your employer reimbursed you in the exact amount of your expenses; or
- Dues to professional societies and Chambers of Commerce; or
- Dues and subscriptions to publications, trade publications, & professional publications; or
- Cost of meals working late, unless while traveling away from home overnight on business; or
- Job hunting or other pursuit of employment expenses; or
- Expenses calculated at federal per diem rates
Examples of expenses that are considered an allowable expense include: [Read more…] about WHAT DOES PA ALLOW AS UNREIMBURSED EMPLOYEE EXPENSES?
Before looking at the PA rules, let’s quickly review the federal income tax rules for claiming a home office.
If a portion of an apartment or residence is used for business, a taxpayer may be able to deduct certain expenses as a business expense on Sch. C of Form 1040. This deduction not only reduces the taxpayer’s income taxes, but also payroll self-employment taxes (FICA & Medicare).
The IRS’s requires that you must use a portion of your dwelling regularly and exclusively to run your business and that you can demonstrate that your dwelling is your principal place of business. Generally, deductions for a home office are based on a percentage, usually computed by dividing the square footage of the business portion of the dwelling to the total square footage of the dwelling.
If you are an employee who wishes to claim a home office deduction (on Sch. A of Form 1040 using Form 2106), you not only must meet the tests discussed above, but you must prove [Read more…] about HOME OFFICE DEDUCTION – PA 40 INDIVIDUAL TAX CONSIDERATIONS
It’s tax season again. The office phones ring and the caller’s first question is “How much do you charge to prepare a personal income tax return”? The caller is price-shopping, looking for the lowest fee. We try to educate these callers that this question should be the last question asked. The more important questions should include, among others, [Read more…] about WHY I USE A TAX PROFESSIONAL TO DO MY TAXES
Because identity theft receives much publicity during the tax season (due to increased levels of actual theft), we posted on Feb. 3, Feb. 10 & Feb. 17 as to how to reduce your risk and steps to take if you suspect that your identity has been stolen.
You have likely heard the news reports of identity theft problems that TurboTax had with its state tax returns. Below we have inserted three links of reports that discuss [Read more…] about WHO IS MORE TO BLAME? TURBOTAX, THE IRS, OR CONGRESS?