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taxation in the united states

How The IRS Wants To Help You With Your Job Hunting Expenses

By //  by Khaleef Crumbley

Normally, when we talk about tax deductions, we immediately think of IRA contribution limits, the standard mileage rate, or self employment tax. However, with so many people being out of work or working part-time hours, the job market is being flooded with applicants. This is why it is important to look at the tax deductions related to job hunting expenses.

Summer used to be the season for job hunting. I received a ton of announcements and advertisements for career fairs, resume services, and headhunters during the summer. However, since the economy has tanked, I get them all year long!

Due to this fact, the IRS has released a list of tax benefits for job seekers. So, while our Senators debate another payroll tax holiday, see if you qualify for any job search deductions.

A Few Guidelines Regarding Job Hunting Expenses:

  • You can deduct employment and outplacement agency fees you pay while looking for a job in your present occupation. If your employer pays you back in a later year for employment agency fees, you must include the amount you receive in your gross income up to the amount of your tax benefit in the earlier year.
  • You can deduct amounts you spend for preparing and mailing copies of your résumé to prospective employers as long as you are looking for a new job in your present occupation.
  • If you travel to an area to look for a new job in your present occupation, you may be able to deduct travel expenses to and from the area. You can only deduct the travel expenses if the trip is primarily to look for a new job. The amount of time you spend on personal activity compared to the amount of time you spend looking for work is important in determining whether the trip is primarily personal or is primarily to look for a new job.
  • To qualify for a deduction, the expenses must be spent on a job search in your current occupation.

So, be sure to save all records of any of these job hunting expenses. Don’t forget things such as printing and copying your resumes, paying headhunters and agencies, and even travel costs.

Other Things To Note About Job Hunting Expenses:

  • You may not deduct expenses incurred while looking for a job in a new occupation.
  • You cannot deduct job search expenses if you are looking for a job for the first time.
  • You cannot deduct job search expenses if there was a substantial break between the end of your last job and the time you begin looking for a new one.

So, in order to deduct job search expenses, it can’t be your first job search and it can’t be in a new field. Of course, just to complicate things, the IRS does not go on to specify what a “substantial break” actually is. However, if you decide to start your own business and become a young entrepreneur, then there is another set of tax laws that govern your situation.

To find out more about deducting job search expenses, see IRS Publication 529. If you have any questions regarding any other issues, please visit our tax help page. Also, be sure to contact us for professional tax preparation once you are ready to file.

Be sure you are aware of the tax filing delay, as well as the fact that the tax filing deadline has been extended this year. To get the most out of your financial situation in 2011, you should know the IRA Contribution Limits, 401k Contribution Limits, and the Income Tax Rates for 2011!

photo credit: nidhug

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Filed Under: Career, Taxes Tagged With: Career, deductions, Economics, employment, finance, income tax in the united states, internal revenue service, job hunting, job search, jobs, jobs marketing, jobs seeker, labor, looking for work, payroll taxes, self employment, self employment taxes, tax deduction, tax deductions, taxation, taxation in the united states

What You Need To Know About Tax Exemptions And Dependents

By //  by Khaleef Crumbley

Some tax laws and guidelines affect every person who may have to file a return – this includes rules governing tax exemptions and dependents. Ever since I became involved in preparing taxes, I have noticed a lot of confusion regarding exemptions and dependents.

Apparently, so has the IRS. Therefore, they have released a bulletin outlining six facts regarding tax exemptions and dependents that will help you when you file a tax return:

Tax Exemptions And Dependents:

  1. Exemptions reduce your taxable income. There are two types of exemptions: personal exemptions and exemptions for dependents. For each exemption you can deduct $3,650 on your 2010 return.

  2. Your spouse is never considered your dependent. On a joint return, you may claim one exemption for yourself and one for your spouse. If you’re filing a separate return, you may claim the exemption for your spouse only if they had no gross income, are not filing a joint return, and were not the dependent of another taxpayer.

  3. Exemptions for dependents. You generally can take an exemption for each of your dependents. A dependent is your qualifying child or qualifying relative. You must list the social security number of any dependent for whom you claim an exemption.

  4. If someone else claims you as a dependent, you may still be required to file your own return. Whether you must file a return depends on several factors including the amount of your unearned, earned or gross income, your marital status, any special taxes you owe and any advance Earned Income Tax Credit payments you received. [Find out if you need to file an income tax return]

  5. If you are a dependent, you may not claim an exemption. If someone else – such as your parent – claims you as a dependent, you may not claim your personal exemption on your own return.

  6. Some people cannot be claimed as your dependent. Generally, you may not claim a married person as a dependent if they file a joint return with their spouse. Also, to claim someone as a dependent, that person must be a U.S. citizen, U.S. resident alien, U.S. national or resident of Canada or Mexico for some part of the year. There is an exception to this rule for certain adopted children. See IRS Publication 501 (opens a PDF),  Exemptions, Standard Deduction, and Filing Information for additional tests to determine who can be claimed as a dependent.

Hopefully, these guidelines have helped you to develop a better understanding of exemptions and dependents. If you need more assistance, visit out tax help page. There you will find guides, articles, and other reference material related to this and other subjects!

Once you are ready to prepare a return, be sure to contact us to set up an appointment for tax preparation. If you decide to file your own taxes, we recommend using TurboTax to do so.

Be sure you are aware of the tax filing delay, as well as the fact that the tax filing deadline has been extended this year. To get the most out of your financial situation in 2011, you should know the IRA Contribution Limits, 401k Contribution Limits, and the Income Tax Rates for 2011!

photo by jscreationzs

To Keep Up To Date With The Latest IRS News And Regulations, Sign Up For Our Email Updates:



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Filed Under: Taxes Tagged With: dependents, earned income tax credit, economy of the united states, exemptions, finance, gross income, income tax in the united states, income tax returns, internal revenue service, irs tax forms, personal exemption, publication 501, standard deduction, tax, tax exemption, tax exemptions, taxable income, taxation in the united states

How Do I Know Which Filing Status To Use On My Tax Return?

By //  by Khaleef Crumbley

Since tax filing season is upon us (after waiting for the tax filing delay to be over), many people will have questions regarding which filing status to use when completing a tax return. Because of that, the IRS has given use several tips/facts that can help us to choose the proper status:

Tax Filing Status For Married Taxpayers:

  • Your marital status on the last day of the year determines your marital status for the entire year.
  • A married couple may file a joint return together. The couple’s filing status would be Married Filing Jointly.
  • A married couple may elect to file their returns separately. Each person’s filing status would generally be Married Filing Separately.

Filing Status Options For Unmarried Taxpayers:

  • “Single” generally applies to anyone who is unmarried, divorced or legally separated according to state law.
  • Head of Household generally applies to taxpayers who are unmarried. You must also have paid more than half the cost of maintaining a home for you and a qualifying person to qualify for this filing status.

Filing Status Options For Widow(er)s:

  • If your spouse died during the year and you did not remarry during 2010, you may still file a joint return with that spouse for the year of death, provided the joint return election is not revoked by a personal representative for the deceased spouse.
  • You may be able to choose Qualifying Widow(er) with Dependent Child as your filing status if your spouse died during 2008 or 2009, you have a dependent child and you meet certain other conditions.

As you can see, there are a few options available for each type of taxpayer. If you find that there is more than one option that applies to your situation, you are free to choose the one that gives you the lowest tax obligation!

If you still require more clarification, you can read more about determining your status in IRS Publication 501 (opens a PDF).

If you decide to file your own taxes, we recommend using TurboTax to do so. If you have already filed a return, you can check your tax refund status.

Be sure you are aware of the tax filing delay, as well as the fact that the tax filing deadline has been extended this year. To get the most out of your tax situation in 2011, you should know the IRA Contribution Limits, 401k Contribution Limits, and the Income Tax Rates for 2011!

photo by Arvind Balaraman

This article was featured in the following carnivals:

Tax Carnival #82: The Tax Awards

To Keep Up To Date With The Latest Tax News And Regulations, Sign Up For Our Email Updates:

 


TurboTax is Easy, Free Edition, Fast Refund

Filed Under: Taxes Tagged With: filing, filing status, government, head of household, income tax in the united states, internal revenue service, IRS, married filing jointly, married filing separately, rate schedule, return, standard deduction, tax filing status, tax preparation, tax return, tax returns, taxation in the united states, Taxes, taxpayer, turbotax

What To Do If You Are Missing Your Forms W2

By //  by Khaleef Crumbley

Even though employers had until January 31st to get all of their Forms W2 mailed out to their employees, there are still many people who haven’t received one as of yet. If you are missing one of more of your forms W-2, the IRS has procedures in place to assist you.

What Information Is Included On My Forms W2?

You should receive a Form W-2, Wage and Tax Statement, from each of your employers. This form includes all of the income that you received from your employer, all of the various taxes that have been withheld during the tax year (federal, state, local, social security, etc), and any other deductions (pre-tax medical premium, retirement savings, etc).

The IRS requires that every employer issue forms W-2 to all of their employees, so that they can be included when the employee goes to file a tax return. Here is what the IRS recommends in the case of a missing Form W-2:

What Should I Do If I Am Missing Forms W2?

1. Contact your employer If you have not received your W-2, contact your employer to inquire if and when the W-2 was mailed. If it was mailed, it may have been returned to the employer because of an incorrect or incomplete address. After contacting the employer, allow a reasonable amount of time for them to resend or to issue the W-2.

2. Contact the IRS If you do not receive your W-2 by February 14th, contact the IRS for assistance at 800-829-1040. When you call, you must provide your name, address, city and state, including zip code, Social Security number, phone number and have the following information:

  • Employer’s name, address, city and state, including zip code and phone number
  • Dates of employment
  • An estimate of the wages you earned, the federal income tax withheld, and when you worked for that employer during 2010. The estimate should be based on year-to-date information from your final pay stub or leave-and-earnings statement, if possible.

3. File your return You still must file your tax return or request an extension to file April 18, 2011, even if you do not receive your Forms W-2. If you have not received your Forms W2 by the due date, and have completed steps 1 and 2, you may use Form 4852, Substitute for Form W-2, Wage and Tax Statement. Attach Form 4852 to the return, estimating income and withholding taxes as accurately as possible.  There may be a delay in any refund due while the information is verified.

4. File a Form 1040X On occasion, you may receive your missing W-2 after you filed your return using Form 4852, and the information may be different from what you reported on your return. If this happens, you must amend your return by filing a Form 1040X, Amended U.S. Individual Income Tax Return.

Once you are ready to prepare a return, then be sure to contact us to set up an appointment for tax preparation. If you decide to file your own taxes, we recommend using TurboTax to do so.

Be sure you are aware of the tax filing delay, as well as the fact that the tax filing deadline has been extended this year. To get the most out of your tax situation in 2011, you should know the IRA Contribution Limits, 401k Contribution Limits, and the Income Tax Rates for 2011!

photo by Arvind Balaraman

This article was featured in the following carnivals:

Totally Money Blog Carnival: Presidential Quotes Edition

To Keep Up To Date With The Latest Tax News And Regulations, Sign Up For Our Email Updates:



TurboTax is Easy, Free Edition, Fast Refund

Filed Under: Taxes Tagged With: form w2, forms, income tax in the united states, internal revenue service, irs tax forms, payroll tax, social security, tax, tax return, tax returns, tax statement, taxation in the united states, Taxes, withholding tax

Free Tax Software Giveaway At KNS Financial

By //  by Khaleef Crumbley

H&R Block was kind enough to provide us with several free copies of their H&R Block AT Home Tax Preparation software.

Free Tax Software You Can Trust

Many of you already know that H&R Block provides professional tax preparation all across the country. However, like TurboTax, they also provide software with which, you can prepare your own return. H&R Block AT Home is available in a few different flavors depending on your needs.

Here are the variations:

Free – File For FREE:

  • FREE to prepare, FREE to print, FREE to e-file
  • FREE expert advice from our community of tax specialists
  • FREE audit support and representation from an enrolled agent – NEW and only from H&R Block
    100% Accuracy Guarantee and Maximum Refund Guarantee

Basic – Simple Tax Situations:

Everything in Free, plus:

  • Import last year’s return
  • Step-by-step guidance to maximize your refund
  • Double check for errors

Deluxe – Homeowners/Investors:

Everything in Basic, plus:

  • Import your W-2, 1099 and last year’s return
  • Searches hundreds of deductions
  • Personalized tax guidance
  • Mortgage interest and charitable tax deduction maximizers
  • Sale of stocks, bonds, and mutual funds

Premium – Self-employed:

Everything in Deluxe, plus:

  • FREE live tax advice2
  • Schedule C guidance
  • Tax laws and planning resources
  • Advanced tax calculators
  • Rental income assistance

The “Premium” version is what we are giving away here! The normal price is $49.95 just to file your federal tax return. To add on a state return, you have to pay $34.95 for each state! I guess it’s a real good thing that they are allowing me to offer this edition (the federal portion) as free tax software.

Free Tax Software For All?

Alright, maybe not for all, but for six! That’s right, H&R Block was nice enough to provide me with six codes for my loyal readers!

How To Enter To Win Free Tax Software:

  1. Link to any of the following articles from your website using the anchor text provided: http://knsfinancial.com/ira-contribution-limits-for-both-roth-and-traditional (IRA Contribution Limits), http://knsfinancial.com/401k-contribution-limits (401k Contribution Limits), http://knsfinancial.com/should-i-cosign-for-a-loan (cosigner). Please note that if you do not use the anchor text provided in the parenthesis EXACTLY AS IT IS WRITTEN, then your entry will not count! This is worth 5 entries for each article (potential of 15 entries)

  2. Sign up for email updates from KNS Financial (you can use the form at the bottom of this post, or the one in the upper right-hand portion of the website) – 3 entries

  3. Subscribe to the KNS Financial RSS Feed – 3 entries

  4. Follow @KNSFINANCIAL on Twitter and Tweet about this contest to your followers using the following (1 entry) – “Win free tax preparation software from @knsfinancial – http://bit.ly/hXCJ0j”

  5. Follow @FGSW (“Fat Guy Skinny Wallet” my new website about Weight Loss, Diet, Fitness, and Debt Management) on Twitter and Tweet about this contest using the following (1 entry) – “Win free tax preparation software from @knsfinancial – http://bit.ly/hXCJ0j via @FGSW”

So, you can have a total of 23 entries for this giveaway!!!

Here are a few more details about this giveaway:

  • You must leave a comment for each method of entry

  • If you win, you will receive a code to use the H&R Block Premium online version for free – keep in mind that the state return is not included

  • If you have already done one of more of the following, you are still eligible for the giveaway – just be sure to leave a comment stating what you have done (and follow the other rules as well)

  • If you have signed up for email updates, please use the same email when you leave a comment (or provide me with the email that you used within the body of the comment). I will match up your comment to my email list to be sure that people aren’t trying to “game the system”

  • If you have tweeted about this giveaway, please provide a link to the tweet as well as your Twitter username so I can match up the entries

  • Although, I plan to reference my email subscriber list and the Twitter records for both accounts, you will only receive credit for an entry if you leave a comment below. For instance, if you are signed up for emails and you fail to leave a comment telling me that you signed up, then you will not be entered.

  • The contest will end on Monday February 21 at 11:59 PM EST

  • I will be using the random number generator found at Random.org to choose the 6 winners.

  • If you are chosen as a winner, you must respond to the confirmation email within 72 hours – if not, another entrant will be randomly selected to take your place. Please leave an email that you plan to check often!

If you are more comfortable having a professional prepare your return, then be sure to contact us to set up an appointment for tax preparation.

Be sure you are aware of the tax filing delay, as well as the fact that the tax filing deadline has been extended this year. To get the most out of your tax situation in 2011, you should know the IRA Contribution Limits, 401k Contribution Limits, and the Income Tax Rates for 2011!

To Keep Up To Date With The Latest Tax News And Regulations, Sign Up For Our Email Updates:

Filed Under: free, Taxes Tagged With: 401, business, economy of the united states, federal tax returns, finance, free, free tax software, giveaway, giveaways, h&r block, income tax in the united states, irs tax forms, software, tax, tax compliance solutions, tax preparation, tax software, tax specialist, tax tips, taxation in the united states, Taxes

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