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Victims of Hurricane Isaac may qualify for tax relief from the IRS. After FEMA (Federal Emergency Management Agency) issued disaster declarations for individual assistance, the IRS announced September 7, 2012 that affected taxpayers in Louisiana will receive tax relief, and based on additional damage assessments by FEMA other locations may be added in coming days. [Read More...]
Between getting the kids back into the school routine, packing lunches and scheduling after-school activities, back to school time can be stressful around most households. Not to mention, the cost of the kids going back to school seems to be increasing. From clothes to gear to school supplies, it seems that we are spending a fortune. Here are a few tips to help you cut down on some of the costs when your kids are going back to school: Start Your Shopping At Home Before you go out to buy anything, start in your own closets first. Throughout the year you may have accumulated some treasures like pens and pencils, or even unworn clothes. Make A List And Set Limits After looking through your things at home, take inventory of what you will need when heading to the store. When you head to the store, stick to your list and set a limit on how much you want to spend. By setting a limit, you will be able to know if you can grant your child’s request for non-essential items or if you need to put those request off until later. Shop Online Shopping online is a great way to compare both products and prices. Doing your shopping online can also cut down on the hassle of having to drive to multiple stores to find everything you may need. Buy Quality Items When looking for school supplies and gear, look for items that are well made and that look like they are going to last. When looking for backpacks, try to choose a book bag that has great quality, or a life-time warranty. Try to choose a book bag that your child may want to use for multiple years, not the trendy bag that they will only like this school year. You may have to spend more for these items, but if they last then they can be used for multiple years. This means you will be able to save money in the long run. Day Care/ After School Care Tax Deduction If your child goes to day care or after school care while you work or look for work, you may be able to claim a credit for their expenses. The Child Dependent Care Tax Credit allows you to claim $3,000 in dependent care expenses for one qualifying child and $6,000 for two or more qualifying persons. In order to claim the credit, you must have a qualifying child and child care provider. A qualifying child is a child under the age of 13, or if they are 13 or older they must be physically or mentally unable to care for him or herself. In order to be considered a qualified childcare provider, the care provider must be over 19 years old and cannot be one of your dependents. They must provide you with their name, business name if applicable, address, and either Social Security Number or Employer Identification Number. All of this information must be reported on Form 2441, in order for you to claim the Child Dependent Care Tax Credit.
With the U.S. unemployment rate at 8.3%, many Americans are left looking for a new job. You may be able to deduct some of your job hunting expenses like phone calls, career counseling and the costs of preparing and mailing your resume if you are looking for a new job that is in the same line of work. The IRS recently released a list of seven tips to keep in mind when deducting costs related to your job search. Here is what you need to know: You Must Be Searching For A Job In The Same Line Of Work This factor is key! In order to qualify for a deduction, your expenses must be spent on a job search in your current occupation. If you are looking to change careers, you may not deduct expenses you incur while looking for a job in a new occupation. You Can Deduct Employment and Outplacement Agency Fees Any fees acquired from employment and outplacement agencies while looking for a job in your present profession can be used as a deduction. Furthermore, it is important to note that the IRS correspondingly states, “If your employer pays you back in a later year for employment agency fees, you must include the amount you received in your gross income, up to the amount of your tax benefit in the earlier year”. Cost Of Preparing And Mailing Your Resume Qualifies As A Deduction When looking for a job, your resume is often the first thing your potential employer sees. Having a professional resume is very important and paper, envelopes, portfolios and postage add up. As long as you are looking for a new job in your present line of work, you can deduct the amounts you spend on preparing and mailing copies of your resume to prospective employers. Tip: In order to insure you deduct your amount spent properly, keep all receipts and record the purpose of each purchase. Travel Costs May or May Not Apply If you travel to look for a new job, you may be able to deduct travel expenses to and from the area to which you traveled as long as: The job is in the same line of work. The trip is primarily to look for a new job. Tip: To determine if the trip is primarily to look for a job or personal, compare the amount of time you spent on personal activity to the amount of time you spent looking for work. There Cannot Be A Substantial Break Between Jobs If there is a substantial break between the end of your last job and the time you begin looking for a new one, you cannot deduct your job search expenses. Therefore it is important to start looking for a new job as soon as possible! Looking For Your First Job? No Deductions Apply Sorry recent high school and college grads, you cannot deduct job search expenses if you are looking for a job for the first time! MOST IMPORTANTLY: Your Job Search and Other Miscellaneous Deductions Must Exceed 2 Percent of Adjusted Gross income The IRS states, “In order to be deductible, the amount that you spend for job search expenses, combined with other miscellaneous expenses, must exceed a certain threshold. To determine your deduction, use Schedule A, Itemized Deductions. Job search expenses are claimed as a miscellaneous itemized deduction. The amount of your miscellaneous deduction that exceeds two percent of your adjusted gross income is deductible”. For instructions on how to properly fill out the Schedule A, Itemized Deductions form click here.
Now that tax season has passed, it’s time to start planning to ensure you get the biggest tax refund for tax year 2012. 1. Estimate your 2012 taxes now with our tax calculator The easiest way to find out if you are on the path to the largest refund next year, is to simply enter your income and withholdings in TaxSlayer.com’s refund calculator. You just need to plug in your income and withholdings and the calculator will do the rest. 2. Don’t like what you see? Change your Federal withholdings with your employer The easiest way to get a larger refund is to change your tax withholding from your paycheck. If you don’t like what the refund calculator has estimated, you should think about reducing your allowances either to 0 or as close to 0 as possible. If you do this, you will have more federal taxes deducted from your paycheck. In most cases, you will get the extra withholdings back when you file your 2012 tax return. 3. Clean out your closet! Donations are a fast and efficient way to help you get a little extra back on your return. Go through your closet, attic, and storage building and turn your trash into someone else’s treasure. Take your donated clothing to Goodwill or The Salvation Army and claim your receipt. Now sit back and receive your treasure with possibly an extra deduction on your tax return. Getting a larger refund requires planning, just like many other financial matters. Start planning for your refund today, by estimating it with our tax refund calculator.