Even if you are not the owner of a small business, you may be able to take tax deductions on the business use of your home as an employee. The rules are very similar to those for a small business owner. 1. As you complete your tax return, keep in mind the area of your home must be used as a principal place of business, such as a place for doing paperwork, meeting with clients or working on projects. 2. For you to take the tax deduction, the area must be used for regular and exclusive use, not just once every so often. In other words, you must use it for business purposes often, and it has to be a dedicated space, not a domestic area that you happen to do some work in. 3. You must use your home for the convenience of your employer. 4. You can’t get rent from your employer for the use of a portion of your home to conduct his or her business. When you deduct home office business expenses, you are actually determining the percentage of your home that you use for business and allocate that portion of the home as a business expense. Other business use of home expenses includes utilities, mortgage interest, depreciation, repairs and insurance. You may take these tax deductions regardless of whether you own your home or rent. Keep these things in mind to increase your tax deductions if you are eligible to the business use of a home deduction.

We all know tax season can be a hurried and frustrating time. Getting all of the necessary paperwork, maximizing your refund, and finding the right way to file are all time consuming. Whether you were completely organized for the tax season or pulling receipts out left and right, now is a great time to take advantage of a Tax Return Transcript. Best of all, it’s free. If you were to order a complete copy of your filed tax return from the IRS, it would cost $57.00. Just like an educational transcript, a Tax Return Transcript contains a summary of the work you have done and your results. First, it has most of the line items from your tax return, including information from your 1040, 1040A, or 1040EZ. A Tax Return Transcript also contains accompanying forms and schedules. So why is this important if you already have a copy of your tax return? A Tax Return Transcript can be used for the following goals. • Meeting the requirements of lending institutions offering mortgages • Compacting information needed to apply for student loans • Having the necessary figures to apply for a visa It is important to note that a tax return transcript does not reflect changes made after the return was filed. The IRS provides three convenient ways of obtaining the transcript: • Order a Transcript online • Call 1-800-908-9946 (5-10 business days for delivery) • Fill out Form 4506T and mail it in. (5-10 business days for delivery) Since the online ordering is fastest, we will provide some quick tips to make it go smoothly. First, you have to decide whether you want a tax return transcript or a tax account transcript. A tax return transcript has most of the line items from your tax return, including information from your 1040, 1040A, or 1040EZ. A tax return transcript also contains accompanying forms and schedules. The tax return transcript is available for this year and up to the last three years. A tax account transcript includes marital status, type of return filed, adjusted gross income, and taxable income. Also, it includes any adjustments you or the IRS made after you filed your return. These are also available for this year and up to the last three years. By filling out Form 4506T, you can send your transcript to third parties like your accountant, financial institution, or government agency. The IRS does require you signature for this information to be released. The IRS provides a visual preview of a transcript at the bottom of the page of Tax Return Transcripts. The IRS provides a simple and easy tool to obtain the tax return transcript online. It’s a 1-2-3 process that you can find by clicking Order a Transcript. Keep checking back to the blog for more helpful information regarding your taxes.

The past couple of months have been punctuated by an abnormally high number of catastrophic storms across the country. The effects of these disasters were felt from coast to coast and will continue to be felt for a long time to come. Events such as these provide a tangible reminder of how precious life can be. The IRS is one of many government agencies doing their part to do everything they can to ease the burden on those affected by the storms. As is common practice the IRS has set up various forms of tax relief that are available to those in affected areas. Recently they have set up such programs for victims in Kentucky, Mississippi, Tennessee, Missouri, Arkansas, Mississippi, Georgia, Alabama, Oklahoma, and North Carolina. Many of these areas qualify for relief measure such as extended filing deadlines, waved penalties, and more. For more information please visit the IRS page for Tax Relief in Disaster situations here or few the applicable fact sheets here and here.

We know you’re out there. Yes, you, the taxpayer who owes the IRS and still hasn’t filed your tax return or requested an extension. Maybe you’ve put off filing your taxes for so long you’re in a panic and don’t know what to do. However, we’re here to tell you that you can still save money when you e-file, even though you will face penalties. Here’s how. Go ahead and file your tax return, even though you’ve put it off until past the deadline, because the penalties you already owe will increase if you don’t. E-file today and you can keep that from happening. The IRS charges a failure-to-file penalty at 5 percent of the balance due on your taxes per month. Even letting just part of a month lapse will tack on 5 percent- so don’t wait. The increase can be as high as 25 percent of the balance you owe. That is money you will save if you e-file now. The minimum penalty for a return over 60 days late is the less of $135 or the balance due. The IRS also charges a failure-to-pay penalty at 0.5% per month plus a monthly interest charge. The penalty cannot be more than 25% of the unpaid tax. The reality is that the tax deadline has passed and it is too late to file an extension. In order to save yourself some money and sanity, you should complete your return today and pay any tax due.