FILING YOUR TAXES
Tips For Filing Your Taxes.
School isn’t cheap, so make sure you get the most from educational expenses. You may be able to deduct the cost of work-related education expenses paid during the year if you're a:
- Self-employed individual
- Disabled individual with impairment-related education expenses
To be deductible, your expenses must be for education that (1) maintains or improves skills needed in your present work or (2) a law requires to keep your present salary, status or job.
Education expenses incurred during temporary absence from your work may also be deductible, but the education must relate to maintain or improve skills needed in your present work. After your temporary absence, you must return to the same general type of work. Usually, absence from work for one year or less is considered temporary. Expenses that you can deduct include:
- Tuition, books, supplies, lab fees, and similar items
- Certain transportation and travel costs
- Other educational expenses, such as the cost of research and typing
Business Travel Expenses
Travel expenses are the ordinary and necessary expenses of traveling away from home for your business or profession. You can't deduct expenses that are lavish or extravagant, or that are for personal purposes. Deductible travel expenses while away from home include, but aren't limited to, the costs of:
- Travel by airplane, train, bus or car between your home and your business destination. (If you're provided with a ticket or you're riding free as a result of a frequent traveler or similar program, your cost is zero.)
- Fares for taxis or other types of transportation between:
- The airport or train station and your hotel,
- The hotel and the work location of your customers or clients, your business meeting place, or your temporary work location.
- Shipping of baggage, and sample or display material between your regular and temporary work locations.
- Using your car while at your business destination. You can deduct actual expenses or the standard mileage rate, as well as business-related tolls and parking fees. If you rent a car, you can deduct only the business-use portion for the expenses.
- Lodging and non-entertainment-related meals.
- Dry cleaning and laundry.
- Business calls while on your business trip. (This includes business communications by fax machine or other communication devices.)
Scholarships, Fellowships and Grants
Amounts you receive may be tax-free such as: tuition, books, supplies, and equipment required for courses at the educational institution. Taxed items include: payments for teaching, research, or other services required as a condition for receiving the scholarship or fellowship grant.
Record keeping Importance
Well-organized records make it easier to prepare a tax return and help provide answers if your return is selected for examination or if you receive an IRS notice. For assessment of tax you owe, this period is generally 3 years from the date you filed the return. Returns filed before the due date are treated as filed on the due date.
Roth IRA Contributions
A Roth individual retirement arrangement (Roth IRA) is a tax-favored account or annuity set up in the United States solely for the benefit of you and your beneficiaries. You can contribute to a Roth IRA if you have taxable compensation and your modified adjusted gross income is within certain limitations.
The Internal Revenue Code limits the amount that an employee may elect to defer in a 401(k) plan. Your elective contributions may also be limited based on the terms of your 401(k) plan and are reported as an information item in box 12 of your Form W-2. Some distributions from a 401(k) plan may qualify for lump-sum distribution treatment or rollover treatment as long as they meet the respective requirements.
Having TAXiety? We Have the Answers.
It’s no secret — taxes can be a challenge to understand. If preparing for this year’s tax season gives you TAXiety, don’t hesitate — schedule an appointment with your local Liberty Tax Practitioner. Let the tax pros at Liberty Tax be your tax resource.