by Fresh Start Tax | Aug 8, 2013 | Tax Help
Summer Job Tax Information for Students
When summer vacation begins, classroom learning ends for most students. Even so, summer doesn’t have to mean a complete break from learning. Students starting summer jobs have the opportunity to learn some important life lessons. Summer jobs offer students the opportunity to learn about the working world – and taxes.
Here are things about summer jobs that the IRS and Fresh Start Tax LLC wants students and other to know about:
1. As a new employee, you’ll need to fill out a Form W-4, Employee’s Withholding Allowance Certificate. Employers use this form to figure how much federal income tax to withhold from workers’ paychecks.
It is important to complete your W-4 form correctly so your employer withholds the right amount of taxes. You can use the IRS Withholding Calculator tool at IRS.gov to help you fill out the form.
If you do not understand the withholding process you should ask your parents or someone knowledgeable to make sure you put down the correct withholding. Do not take a guess.
2. If you’ll receive tips as part of your income, remember that all tips you receive are taxable. Keep a daily log to record your tips. If you receive $20 or more in cash tips in any one month, you must report your tips for that month to your employer. You may want to keep a separate log for your tips.
3. Maybe you will earn money doing odd jobs this summer.
If so, keep in mind that earnings you receive from self-employment are subject to income tax. Self-employment can include pay you get from jobs like baby-sitting and lawn mowing.
4. You may not earn enough money from your summer job to owe income tax, but you will probably have to pay Social Security and Medicare taxes.
Your employer usually must withhold these taxes from your paycheck. Or, if you’re self-employed, you may have to pay self-employment taxes.
Your payment of these taxes contributes to your coverage under the Social Security system.
5. If you’re in ROTC, your active duty pay, such as pay received during summer camp, is taxable.
However, the food and lodging allowances you receive in advanced training are not.
6. If you’re a newspaper carrier or distributor, special rules apply to your income. Whatever your age, you are treated as self-employed for federal tax purposes if:
- You are in the business of delivering newspapers.
- Substantially all your pay for these services directly relates to sales rather than to the number of hours worked.
- You work under a written contract that states the employer will not treat you as an employee for federal tax purposes.
If you do not meet these conditions and you are under age 18, then you are usually exempt from Social Security and Medicare tax.
If you need professional tax preparation contact us today. 1-866-700-1040.
by Fresh Start Tax | Aug 8, 2013 | Tax Help
Fresh Start Ta x Tax Tips when You Move
If you make a work-related you may be able to deduct the costs of the move.
This may apply if you move to:
- start a new job or
- to work at the same job in a new job location.
- The IRS offers the following tips on moving expenses you may be able to deduct on your tax return.
Fresh Start Tax LLC offers the following tips on moving expenses you may be able to deduct on your tax return.
In order to deduct moving expenses, you must meet these 3 requirements:
1. Your move closely relates to the start of work.
Generally, you can consider moving expenses within one year of the date you first report to work at a new job location. Additional rules apply to this requirement.
2. You meet the distance test.
Your new main job location must be at least 50 miles farther from your former home than your previous main job location was.
For example, if your old main job location was three miles from your former home, your new main job location must be at least 53 miles from that former home.
3. You meet the time test.
After you move, you must work full time at your new job location for at least 39 weeks during the first year. Self-employed individuals must meet this test and also work full time for a total of at least 78 weeks during the first 24 months upon arriving in the general area of their new job location.
If your income tax return is due before you have satisfied this requirement, you can still deduct your allowable moving expenses if you expect to meet the time test.
See Publication 521, Moving Expenses, for more information about these rules.
If you can claim this deduction, here are a few more tips from the IRS:
Travel.
You can deduct transportation and lodging expenses for yourself and household members while moving from your former home to your new home. You cannot deduct the cost of meals during the travel.
Household goods.
You can deduct the cost of packing, crating and transporting your household goods and personal property. You may be able to include the cost of storing and insuring these items while in transit.
Utilities. You can deduct the costs of connecting or disconnecting utilities.
Nondeductible expenses.
You cannot deduct as moving expenses any part of the purchase price of your new home, the costs of buying or selling a home, or the cost of entering into or breaking a lease. See Publication 521 for a complete list.
Reimbursed expenses.
If your employer reimburses you for the costs of a move for which you took a deduction, you may have to include the reimbursement as income on your tax return.
Update your address. When you move, be sure to update your address with the IRS and the U.S. Postal Service to ensure you receive mail from the IRS. File Form 8822, Change of Address, to notify the IRS.
Tax form to file.
To figure the amount of your deduction for moving expenses, use Form 3903, Moving Expenses.
Always keep your receipts in case of a tax audit
Make sure you can always show proof of expenses by keeping all your receipts in case you are pulled for IRS tax audit.
Fresh Start Tax LLC would love to prepare your tax return.
We can assure that you will pay the lowest amount allowed by law.
You can have former IRS agents and managers prepare your tax returns and build up a lifetime relationship with truly qualified tax professionals.
Moving, Work Related – Tax Deduction Tips – Fresh Start Tax
by Fresh Start Tax | Aug 7, 2013 | Tax Help
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Armed Forces Tax Information
The tax law provides some special benefits for active members of the U.S. Armed Forces and certain benefits for individuals serving in combat zones.
For more information on the various tax benefits available to members of the U.S. Armed Forces, please refer to Publication 3, Armed Forces’ Tax Guide.
For federal tax purposes, the U.S. Armed Forces includes commissioned officers, warrant officers, and enlisted personnel in all regular and reserve units controlled by the Secretaries of Defense, the Army, Navy, and Air Force.
The Coast Guard is also included, but not the U.S. Merchant Marine or the American Red Cross. However, these and other support personnel serving in a combat zone may qualify for certain tax deadline extensions normally available to individuals in the U.S. Armed Forces serving in a combat zone.
For more information on benefits available to individuals serving in a combat zone (including non-military individuals), please refer to Publication 3, Armed Forces’ Tax Guide, or go to Tax Information for Members of the Military on the IRS.gov website.
Military, Armed Forces – IRS Help – Affordable Tax Help Experts
by Fresh Start Tax | Aug 6, 2013 | IRS Tax Problem, Tax Help
Federal Tax Problems – Tax Resolution & Easy Solutions
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by Fresh Start Tax | Aug 6, 2013 | Tax Help
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by Fresh Start Tax | Aug 6, 2013 | Tax Help
Simplified Option for Home Office Deduction
Do you work from home? You’ll want to read this information for the very simplified options for home office tax deductions.
As former IRS agents and managers please be advised that this is a favorite target for IRS tax auditors because this is an area very well abused by taxpayers.
Make sure you take only the tax deductions that you can document in this area because of the continued abuse. So, do not make yourself a target for the Internal Revenue Service
If so, you may be familiar with the home office deduction, available for taxpayers who use their home for business. Beginning this year, there is a new, simpler option to figure the business use of your home.
This simplified option does not change the rules for who may claim a home office deduction.
It merely simplifies the calculation and record keeping requirements. The new option can save you a lot of time and will require less paperwork and record keeping.
Here are facts you to know about the new, simplified method to claim the home office deduction.
1. You may use the simplified method when you file your 2013 tax return next year. If you use this method to claim the home office deduction, you will not need to calculate your deduction based on actual expenses.
You may instead multiply the square footage of your home office by a prescribed rate.
2. The rate is $5 per square foot of the part of your home used for business.
The maximum footage allowed is 300 square feet. This means the most you can deduct using the new method is $1,500 per year.
3. You may choose either the simplified method or the actual expense method for any tax year.
Once you use a method for a specific tax year, you cannot later change to the other method for that same year.
4. If you use the simplified method and you own your home, you cannot depreciate your home office. You can still deduct other qualified home expenses, such as mortgage interest and real estate taxes.
You will not need to allocate these expenses between personal and business use. This allocation is required if you use the actual expense method. You’ll claim these deductions on Schedule A, Itemized Deductions.
5. You can still fully deduct business expenses that are unrelated to the home if you use the simplified method. These may include costs such as advertising, supplies and wages paid to employees.
6. If you use more than one home with a qualified home office in the same year, you can use the simplified method for only one in that year.
However, you may use the simplified method for one and actual expenses for any others in that year.
If you need to optimize all your tax-deductible contact us today and speak directly to former IRS agents and managers who can ensure that you will pay the lowest amount of tax allowed by law. We are a full service tax firm that specializes in IRS tax problem help, tax preparation and any IRS or state tax issue.
