Job Search Expenses Can be Tax Deductible

Summertime is the season that often leads to major life decisions, such as buying a home, moving or a job change. If you are looking for a new job that is in the same line of work, you may be able to deduct some of your job hunting expenses on your federal income tax return.

Here are seven things the IRS wants you to know about deducting costs related to your job search:
1. To qualify for a deduction, your expenses must be spent on a job search in your current occupation. You may not deduct expenses you incur while looking for a job in a new occupation.

2. You can deduct employment and outplacement agency fees you pay while looking for a job in your present occupation. 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.

3. You can deduct amounts you spend for preparing and mailing copies of your résumé to prospective employers as long as you are looking for a new job in your present occupation.

4. If you travel to look for a new job in your present occupation, you may be able to deduct travel expenses to and from the area to which you travelled. You can only deduct the travel expenses if the trip is primarily to look for a new job. The amount of time you spend on personal activity unrelated to your job search compared to the amount of time you spend looking for work is important in determining whether the trip is primarily personal or is primarily to look for a new job.

5. You cannot deduct your job search expenses if there was a substantial break between the end of your last job and the time you begin looking for a new one.

6. You cannot deduct job search expenses if you are looking for a job for the first time.

7. The amount of job search expenses that you can claim is limited. To determine your deduction, use Schedule A, Itemized Deductions. Job search expenses are claimed as a miscellaneous itemized deduction and the total of all miscellaneous deductions must be more than two percent of your adjusted gross income.

Please contact us if you have questions or want to determine if your expenses are tax deductible.

Links:

• Schedule A, Itemized Deductions (PDF)
• Publication 529, Miscellaneous Deductions (PDF)

Our Client, VIA Motors unveiled electric truck today

The world's first extended-range electric truck, designed in Utah, was unveiled this morning. It will soon be tested by major companies around the country who want to save on gas and cut down their emissions.  Full article can be found here.

For more information about VIA Motors, check out their website.

Mantyla McReynolds Serves Local Charity

Mantyla McReynolds is committed to not only being a successful Utah CPA firm, but supporting the community.  Although nearly all of the staff volunteer individually, the firm wanted to work together to assist a local charity.  Mantyla McReynolds is very pleased with the decision to support Ascend Alliance with their annual Gala Arts Fest on Saturday, June 9^th at Thanksgiving Point.  Not only is Mantyla McReynolds able to support a great organization that is committed to ending poverty, but are able to provide assurance to donors as they collect and account for several hundred thousand dollars that will be collected throughout the evening. 

   

For more information about the event, visit http://ascendalliance.org/Events.aspx

About Ascend, A Humanitarian Alliance

For the past 30 years Ascend Alliance Humanitarian has been a driving force in international outreach, providing exceptional internships, expeditions and fighting poverty.  Ascend is a private, non-profit organization, tax-exempt under section 501(c)(3) of the United States Internal Revenue Code. The Alliance operates under the governance of a volunteer board of directors, which is comprised of successful business professionals, experienced humanitarians and community leaders. 

 
Ascend has a strong, local group of donors, partners, volunteers, interns and staff members who contribute their time, resources and skills to further their goals.  They are also open to affiliations with other like-minded, organizations to join with them in helping achieve their mission:  Lift Others…Lift Yourself!  It is through these powerful and special relationships that Ascend is able to overcome language barriers and transcend political and cultural challenges to change lives and perspectives through local and global outreach operations.

Automated IRS System Helps College-Bound Students with Financial Aid Application Process

College-bound students and their parents typically want to make every dollar and every minute of the college experience count including money spent on tuition and time spent on the college financial aid application process. The Internal Revenue Service is helping minimize the time spent on the completion of the Free Application for Federal Student Aid (FAFSA) form by automating access to federal tax returns with the IRS Data Retrieval Tool. This tool provides the opportunity for applicants to automatically transfer the required tax data onto the FAFSA form.

Here are some tips on using the IRS Data Retrieval Tool:

• Benefits The IRS Data Retrieval tool is an easy and secure way to access and transfer tax return information directly onto the FAFSA form, saving time and improving accuracy. Also, the increased accuracy reduces the likelihood of being selected for verification by the school’s financial aid office.
• Eligibility Criteria Taxpayers who wish to use the tool to complete their 2012 FAFSA form must:
• have filed a 2011 tax return;
• possess a valid Social Security Number;
• have a Federal Student Aid PIN (individuals who don’t have a PIN, will be given the option to apply for one through the FAFSA application process);
• have not changed marital status since Dec. 31, 2011.
• Exceptions If any of the following conditions apply to the student or parents, the IRS Data Retrieval Tool can not be used for the 2012 FAFSA application:
• an amended tax return was filed for 2011;
• no federal tax return for 2011 has been filed ;
• the federal tax filing status on the 2011 return is married filing separately; a Puerto Rican or other foreign tax return has been filed.
• Alternatives If the IRS Data Retrieval Tool can not be used and if the college requests verification documentation, it may be necessary to obtain an official transcript from the IRS. To order tax return or tax account transcripts, visit www.irs.gov and select  Order a Transcript  or call the Transcript toll-free line at 1-800-908-9946.

In addition to helping reduce the time and effort involved in completing and submitting the FAFSA form through the IRS Data Retrieval Tool, the IRS offers money-saving information to college students and their parents.  Important information regarding tax credits and deductions for qualifying tuition, materials and fees is available at the IRS Tax Benefits for Education: Information Center and in IRS Publication 970, Tax Benefits for Education both of which are available at www.IRS.gov.

Start Planning Now for Next Year's Tax Return

The tax deadline may have just passed but planning for next year can start now. The IRS reminds taxpayers that being organized and planning ahead can save time, money and headaches in 2013. Here are eight things you can do now to make next April 15 easier.

1. Adjust your withholding Why wait another year for a big refund? Now is a good time to review your withholding and make adjustments for next year, especially if you'd prefer more money in each paycheck this year. If you owed at tax time, perhaps you'd like next year's tax payment to be smaller. Use IRS's Withholding Calculator at www.irs.gov or Publication 919, How Do I Adjust My Tax Withholding?

2. Store your return in a safe place Put your 2011 tax return and supporting documents somewhere secure so you'll know exactly where to find them if you receive an IRS notice and need to refer to your return. If it is easy to find, you can also use it as a helpful guide for next year's return.

3. Organize your recordkeeping Establish a central location where everyone in your household can put tax-related records all year long. Anything from a shoebox to a file cabinet works. Just be consistent to avoid a scramble for misplaced mileage logs or charity receipts come tax time.

4. Review your paycheck Make sure your employer is properly withholding and reporting retirement account contributions, health insurance payments, charitable payroll deductions and other items. These payroll adjustments can make a big difference on your bottom line. Fixing an error in your paycheck now gets you back on track before it becomes a huge hassle.

5. Shop for a tax professional early If you use a tax professional to help you strategize, plan and make financial decisions throughout the year, then search now. You'll have more time when you're not up against a deadline or anxious for your refund. Choose a tax professional wisely. You are ultimately responsible for the accuracy of your own return regardless of who prepares it. Find tips for choosing a preparer at www.irs.gov.

6. Prepare to itemize deductions If your expenses typically fall just below the amount to make itemizing advantageous, a bit of planning to bundle deductions into 2012 may pay off. An early or extra mortgage payment, pre-deadline property tax payments, planned donations or strategically paid medical bills could equal some tax savings. See the Schedule A instructions for expenses you can deduct if you're itemizing and then prepare an approach that works best for you.

7. Strategize tuition payments The American Opportunity Tax Credit, which offsets higher education expenses, is set to expire after 2012. It may be beneficial to pay 2013 tuition in 2012 to take full advantage of this tax credit, up to $2,500, before it expires. For more information, see IRS Publication 970, Tax Benefits for Education.

8. Keep up with changes Find out about tax law changes, helpful tips and IRS announcements all year by subscribing to IRS Tax Tips through www.irs.gov or IRS2Go, the mobile app from the IRS. The IRS issues tips regularly during summer and tax season. Special Edition tips are sent periodically with other timely updates.

The IRS emphasizes that each household's financial circumstances are different so it's important to fully consider your specific situation and goals before making large financial decisions. 

Please contact us if you have any questions.  801-269-1818


Links:

• IRS Withholding Calculator
• Publication 919, How Do I Adjust My Tax Withholding? (PDF)
• 2011 Form 1040 (Schedule A) (PDF)
• Publication 970, Tax Benefits for Education (PDF)

What To Do If You Receive a Notice from the IRS

The IRS sends millions of letters and notices to taxpayers for a variety of reasons. Many of these letters and notices can be dealt with simply, without having to call or visit an IRS office.

Here are six things to know about IRS notices and letters.

1. There are a number of reasons why the IRS might send you a notice. Notices may request payment, notify you of account changes, or request additional information. A notice normally covers a very specific issue about your account or tax return.

2. Each letter and notice offers specific instructions on what action needs to be taken.

3. If you receive a correction notice, please notify us immediately so we can review the correspondence and compare it with the information on your return.

4. Sometimes the notice is just a correction to your account, then usually no reply is necessary unless a payment is due or the notice directs otherwise.

5. If we do not agree with the correction the IRS has made, it is important to respond as requested. We need to send a written explanation of why we disagree and include any documents and information we want the IRS to consider along with the bottom tear-off portion of the notice. It is not unusual for the IRS to take four to six weeks to respond after we have responded to them. 

6. IRS notices and letters are sent by mail. The IRS does not correspond by email about taxpayer accounts or tax returns. If you receive any email correspondence from the IRS, do not open any attachments and immediately delete the email.

The most important thing to remember is that a response is needed even though you know you are right.  And the sooner a response is made the better.  Our job is to help you to respond in a manner that will solve the problem quickly and easily.  Please call us as soon as you receive any notice from the IRS or state tax commission.

Amended Returns: Eight Facts

If you discover an error on your federal income tax return after you e-filed or mailed it, you may want or need to amend your return. Perhaps you are eligible for a deduction or credit and you missed it the first time?

Here are eight key points the IRS wants you to know about when considering whether to file an amended federal income tax return.

1. Use Form 1040X, Amended U.S. Individual Income Tax Return, to file an amended income tax return.

2. Use Form 1040X to correct previously filed Forms 1040, 1040A or 1040EZ. An amended return cannot be e-filed; you must file it by paper.

3. Generally, you do not need to file an amended return to correct math errors. The IRS will automatically make that correction. Also, do not file an amended return because you forgot to attach tax forms such as W-2s or schedules. The IRS normally will send a request asking for those.

4. Be sure to enter the year of the return you are amending at the top of Form 1040X. Generally, you must file Form 1040X within three years from the date you filed your original return or within two years from the date you paid the tax, whichever is later.

5. If you are amending more than one tax return, prepare a 1040X for each return and mail them in separate envelopes to the appropriate IRS campus. The 1040X instructions list the addresses for the campuses.

6. If the changes involve another schedule or form, you must attach that schedule or form to the amended return.

7. If you are filing to claim an additional refund, wait until you have received your original refund before filing Form 1040X. You may cash that check while waiting for any additional refund.

8. If you owe additional 2011 tax, file Form 1040X and pay the tax before the due date to limit interest and penalty charges that could accrue on your account. Interest is charged on any tax not paid by the due date of the original return, without regard to extensions.