| Substantiation Requirements for Employee Expenses |
| The Internal Revenue Service considers certain employee expenses to be particularly susceptible to abuse. Therefore, in order to claim a deduction for travel, entertainment, business gifts, or the use of certain listed property such as automobiles, an employee must substantiate the expenditure with adequate records or sufficient evidence corroborating the taxpayer's own statements. This documentation must show the amount, time, place, and business purpose of the expense. The IRS has placed an additional substantiation requirement for entertainment and gift deductions. The taxpayer claiming the deduction must be prepared to show the business relationship of the expense.More... |
| Rental Income and Expenses |
| A taxpayer who rents out property is required to report rental income to the extent of the cash or the fair market value of any property received. Most individuals report their operations to the Internal Revenue Service using the cash basis method of accounting. Therefore, they must include rental income when it is actually received. An amount paid by a tenant to cancel a lease is rental income that is taxable in the year received.More... |
| Joint or Separate Return |
| Every married couple has to make the yearly financial decision of whether to file a joint or separate federal income tax return. Filing a joint return is most beneficial when there is a substantial difference in the incomes of the spouses. Because the incomes of both spouses are combined in a joint return, it allows some of the income of higher earning spouse to be taxed at the lower marginal rate available to the joint filers, resulting in tax savings.More... |
| Taxability of Military Pay |
| In general, if you are a member of the U.S. Armed Forces, your pay is included in gross income for federal income tax purposes. Basic pay includes amounts paid as back wages and amounts paid for services performed during active duty, attendance at designated service schools, drills, reserve training, and training duty. Special pay, including amounts received by medical and dental officers, nuclear-qualified officers, and amounts paid for services performed during diving duty, foreign duty, hostile fire, imminent danger, and special duty assignment must also be included in gross income. In addition, if you receive bonuses for enlistment and reenlistment, payments for accrued leave, muster out payments, personal money allowances paid to high-ranking officers, and certain scholarship and student loan repayments, you must include them in gross income.More... |
| Educator Expense Deduction |
| Eligible educators are entitled to deduct up to $250 from gross income for unreimbursed out-of-pocket expenses incurred for books, supplies, computer equipment (including related software and services), other equipment, and supplementary materials used in the classroom. If the educator teaches courses in health and physical education, expenses for supplies are qualified expenses only if they are related to athletics.More... |
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