by The MDTAXES Network | Nov 17, 2015 | 2015 Year End Newsletter, Deductions
According to the IRS, to be deductible, an expenditure must be both “ordinary” and “necessary” in connection with your profession.? The IRS defines “ordinary” as common and accepted in a particular profession and “necessary” as helpful and appropriate for a particular profession.
Here?s a list of 16 professional expenditures commonly incurred by young health care professionals:
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Automobile expenses
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Beepers and pagers
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Books/library
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Cellular telephones?
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Computer purchases
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Education, examinations & licenses
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Equipment & instruments
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Job search
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Malpractice insurance
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Meals & entertainment
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Parking & tolls
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Professional dues, journals & subscriptions
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Psychoanalysis as part of training
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Supplies
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?Travel & lodging
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Uniforms & cleaning
?Please note:? Employees may not deduct professional expenses that are eligible for reimbursement from their employer.
by The MDTAXES Network | Dec 18, 2013 | Deductions
According to the IRS, to be deductible, an expenditure must be both “ordinary” and “necessary” in connection with your profession.? The IRS defines “ordinary” as common and accepted in a particular profession and “necessary” as helpful and appropriate for a particular profession.
Here?s a list of 16 professional expenditures commonly incurred by young health care professionals:
-
Automobile expenses
-
Beepers and pagers
-
Books/library
-
Cellular telephones?
-
Computer purchases
-
Education, examinations & licenses
-
Equipment & instruments
-
Job search
-
Malpractice insurance
-
Meals & entertainment
-
Parking & tolls
-
Professional dues, journals & subscriptions
-
Psychoanalysis as part of training
-
Supplies
-
?Travel & lodging
-
Uniforms & cleaning
?Please note:? Employees may not deduct professional expenses that are eligible for reimbursement from their employer.
by The MDTAXES Network | Dec 16, 2013 | Uncategorized
During December, you should evaluate whether you’ll save any taxes by postponing 2013 income or deductions into 2014 or by accelerating 2014 income or deductions into 2013.? While many factors should be evaluated prior to making your final decision, a few items to keep in mind are as follows:
- For 2013, a single person will itemize once allowable deductions exceed $6,100 and a married couple will itemize once allowable deductions exceed $12,200.
- A taxpayer is no longer subject to Social Security or self-employment taxes once wages and net self-employment earnings exceed and $113,700 in 2013 and $117,000 in 2014.
- Miscellaneous itemized deductions, such as unreimbursed employee business expenses, are only deductible to the extent they exceed 2% of adjusted gross income (AGI). Items paid with credit cards are deductible in the year charged.
- Medical and dental expenses are deductible to the extent they exceed 7.5% of AGI, and are deductible in the year paid.
If you need assistance in determining whether you should either postpone or accelerate your income or deductions, or whether you?ll be hit by the AMT, please give us a call.
by The MDTAXES Network | Jul 26, 2013 | Charity, Planning, Taxes, Uncategorized
From IRS Tax Tips Newsletter:
Do you plan to travel while doing charity work this summer? Some travel expenses may help lower your taxes if you itemize deductions when you file next year. Here are five tax tips the IRS wants you to know about travel while serving a charity.
1.?You must volunteer to work for a qualified organization. Ask the charity about its tax-exempt status. You can also visit IRS.gov and use the Select Check tool to see if the group is qualified.
2.?You may be able to deduct unreimbursed travel expenses you pay while serving as a volunteer. You can?t deduct the value of your time or services.
3.?The deduction qualifies only if there is no significant element of personal pleasure, recreation or vacation in the travel. However, the deduction will qualify even if you enjoy the trip.
4.?You can deduct your travel expenses if your work is real and substantial throughout the trip. You can?t deduct expenses if you only have nominal duties or do not have any duties for significant parts of the trip.
5.?Deductible travel expenses may include:
- Air, rail and bus transportation
- Car expenses
- Lodging costs
- The cost of meals
- Taxi fares or other transportation costs between the airport or station and your hotel
To learn more see Publication 526, Charitable Contributions. The booklet is available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).
by The MDTAXES Network | May 23, 2013 | Miscellaneous
In today’s consumer driven world we live in, almost everyone builds up clutter that never sees the light of day. Why not take this opportunity to clean out your closets, garages, and attics and generate a tax deduction while you’re at it?
Donating these goods can also save you taxes, as long as you itemize your deductions instead of claiming the standard deduction. Just make sure to make a list of what you donated, and somehow come up with the fair value of each donated item.
According to the instructions to the Form 8283 – Non-cash Charitable Contributions:
The FMV of used household items and clothing is usually much lower than when new. A good measure of value might be the price that buyers of these used items actually pay in consignment or thrift shops. You can also review classified ads in the newspaper or on the Internet to see what similar products sell for.
You cannot claim a deduction for clothing or household items you donate after August 17, 2006, unless the clothing or household items are in good used condition or better. However, you can claim a deduction for a contribution of an item of clothing or household item that is not in good used condition or better if you deduct more than $500 for it and include a qualified appraisal of it with your return.
Publication 526 – Charitable Contributions sheds more light onto this issue:
The fair market value of used household items, such as furniture, appliances, and linens, is usually much lower than the price paid when new. These items may have little or no market value because they are in a worn condition, out of style, or no longer useful. For these reasons, formulas (such as using a percentage of the cost to buy a new replacement item) are not acceptable in determining value.
You should support your valuation with photographs, canceled checks, receipts from your purchase of the items, or other evidence. Magazine or newspaper articles and photographs that describe the items and statements by the recipients of the items are also useful. Do not include any of this evidence with your tax return.
Properly valuing your donated clothing and household rules has become more important in the post August 17, 2006 “Good or Better” world. If you ever get audited, there is a good chance that the IRS will use these new rules as a way to greatly reduce the deduction they will allow you to claim unless you can:
? Substantiate that the donated goods were in good condition or better, and
? Demonstrate how you came up with the Fair Market Value you claimed
To help you put a value on the donated goods, we have created a few different tools based on the published values of used merchandise sold at the thrift shops of the Salvation Army and Goodwill Industries. For starter, check out UDoGood, an iPhone App. Or, download our Non-cash Charitable Donation worksheet in either pdf format or as an Interactive Microsoft Excel Spreadsheet. (To download the Excel Spreadsheet, right click your mouse and hit “Save Target As”, and then choose the directory on your computer where you want this file to sit.)
Simply complete either version of this worksheet, take a few photos of what you are donating, and file along with your tax records, and use this information when completing your Form 8283 next year to attach to your federal income tax return.? Hopefully this information will do the trick if you ever get audited.? While we don’t recommend that you exaggerate the value you claim for the items you’re donating, we do believe you should take the full deduction based on the fair market value of the stuff you gave away.
