#1 Myth – I can claim mileage traveled to/from work
Traveling to and from your regular place of employment is simply not deductible. But let’s look at what is. The Internal Revenue Service (IRS) will allow for travel back and forth for business related trips. For example, let’s say you are an attorney and you have meetings with clients throughout the day, the mileage traveled to and from these meetings are considered as deductible expenses. You have the option of taking actual cost or the standard mileage rate of .56 cents (2013) for each mile traveled.
However, if you have a second job and you traveled from your primary place of employment directly to a second job, your mileage traveled is considered a deductible expense. For example, you work at a university and also a night job at a community center. Your travel is considered a deductible expense. For more information, view IRS Publication 463.
#2 Myth – I can deduct my time donated to a nonprofit
I had to include this myth, because just this year alone, I was asked about this several times. But the IRS does not allow for a deduction for services provided to a nonprofit. For instance, if you are a chef and decide to donate your time to cook for homeless individuals at a local shelter, your time donated is not deductible. However, you may be able to deduct your mileage traveled to and from the nonprofit, payments made for food and supplies, or even amounts given to the organization.
#3 Myth – I can claim my work clothes as an deduction
This is also one of the biggest misconceptions. Many people think they are able to claim the cost of their clothing and cleaning expenses on the tax return. Now granted, in certain instances this cost may be deductible if the clothing meets two requirements. These requirements are (1) the clothes cannot be suitable for everyday wear and (2) it is a condition of employment.
However, it is not enough to say “I don’t wear these anywhere else!” It has to meet the requirements listed above to be deductible. For more information, visit Publication 529.
You received the letter many dread, the Internal Revenue Service (IRS) has requested to audit your tax return. It could be for many different reasons. Maybe your income on your tax return did not match the amount reported to the IRS or your expenses seem to be a bit questionable. If so, you could be the lucky winner of a full IRS audit. No matter what reason the IRS decides to come knocking, one thing is certain – you must be prepared. As a former IRS agent, I have had the opportunity to participate in a host of audits, and time and time again, the key to surviving these unwanted ordeals is to make certain you understand your rights and responsibilities. [Read more…]
Before you sign on the dotted line this tax season, there are many things to consider. Yes, it may be easy to bump up your deductions a couple of dollars here or there, but does it really pay to cheat on your taxes? The Bible warns us to pay unto Caesar what is due to him (Matthew 22:20-22). [Read more…]
While you have no control over when you will get a raise, you do have a little leeway when it comes to your take home pay. No matter if it has been years since you have seen a raise, there is something you can do about it. [Read more…]