Get IRS Tax Information for Student Financial Aid Applications

by Fresh Start Tax | Jun 29, 2017 | Tax Help

IRS Offers Help to Students, Families to Get Tax Information for Student Financial Aid Applications

The U.S. Department of Education today announced the IRS Data Retrieval Tool is now available for borrowers applying for an income-driven repayment plan.

New encryption protections have been added to the Data Retrieval Tool to further protect taxpayer information. The IRS Data Retrieval Tool will return Oct. 1, 2017, on the online 2018–19 Free Application for Federal Student Aid (FAFSA®) form.

Update April 7, 2017: See Also: Questions and Answers:

Mailings about suspicious activity related to the DRT and FAFSA

Update March 30, 2017:

Internal Revenue Service (IRS) and U.S. Department of Education Office of Federal Student Aid (FSA) Statement‎ about the IRS Data Retrieval Tool (DRT)

You must have information from your tax return in order to file a Free Application for Federal Student Aid (FAFSA®) or apply for an income-driven repayment plan.

The IRS Data Retrieval Tool (DRT) used to access your tax information for the FAFSA and income-driven repayment (IDR) plan applications is currently unavailable.

This does not limit an individual’s ability to apply for aid or an IDR plan. Applicants can manually provide their tax return information.

The online FAFSA and IDR applications remain operational, and applicants can continue filing the FAFSA or applying for an IDR plan as they normally would.

Getting Your 2015 Tax Return Information For the 2016–17 and 2017–18 FAFSA

Applicants filing a 2016–17 or 2017–18 FAFSA must use data from their 2015 tax returns.

You should always retain a copy of your tax return, either electronically or on paper, and keep it in a secure place.

If you did not keep a copy of your tax return, here are some options:

Access the tax software product you used to prepare and file your 2015 return. You may be able to access your account to download/print a copy.

Contact the tax preparer/provider who filed your 2015 return if you used a tax professional.

Download your tax transcript (a summary) at Get Transcript Online. Review the rigorous identity authentication requirements for Secure Access before attempting to register.

Use Get Transcript by Mail and a transcript will be mailed to the address on your return within five to 10 days.

Call our automated line at 800-908-9946 to order a transcript by mail.

If you filed an amended tax return, Form 1040X, you should use the adjusted gross income and earned income listed on your revised tax return.

Getting Your Alternative Documentation For IDR Applications

IDR plan applicants must submit alternative documentation of income to their federal loan servicers after they complete and submit the online IDR application.

The process for submitting the alternative documentation of income is explained to borrowers as part of the online IDR application.

As a general rule, alternative documentation of income consists of copies of pay stubs or most recently filed tax return

IRS: Home Office Deduction Often Overlooked by Small Business Owner + Home Deductions

by Fresh Start Tax | Jun 29, 2017 | Tax Help

IRS: Home Office Deduction Often Overlooked by Small Business Owners

The Internal Revenue Service today reminded small business owners who work from a home office that there are two options for claiming the Home Office Deduction.

The Home Office Deduction is often overlooked by small business owners.

As part of National Small Business Week (April 30-May 6), the IRS is highlighting a series of tips and resources available for small business owners.

The Regular Method

The first option for calculating the Home Office Deduction is the Regular Method.

This method requires computing the business use of the home by dividing the expenses of operating the home between personal and business use.

Direct business expenses are fully deductible and the percentage of the home floor space used for business is assignable to indirect total expenses. Self-employed taxpayers file Form 1040, Schedule C , Profit or Loss From Business (Sole Proprietorship), and compute this deduction on Form 8829, Expenses for Business Use of Your Home.

The Simplified Method

The second option, the Simplified Method, reduces the paperwork and recordkeeping burden for small businesses.

The simplified method has a prescribed rate of $5 a square foot for business use of the home.

There is a maximum allowable deduction available based on up to 300 square feet.

Choosing this option requires taxpayers to complete a short worksheet in the tax instructions and entering the result on the tax return.

There is a special calculation for daycare providers. Self-employed individuals claim the home office deduction on Form 1040, Schedule C , Line 30; farmers claim it on Schedule F, Line 32 and eligible employees claim it on Schedule A, Line 21.

Regardless of the method used to compute the deduction, business expenses in excess of the gross income limitation are not deductible.

Deductible expenses for business use of a home include the business portion of real estate taxes, mortgage interest, rent, casualty losses, utilities, insurance, depreciation, maintenance and repairs.

In general, expenses for the parts of the home not used for business are not deductible.

Deductions for business storage are deductible when the dwelling unit is the sole fixed location of the business or for regular use of a residence for the provision of daycare services; exclusive used in most cases.