Education Tax Benefits

If you pay tuition, fees, and other costs for attendance at an eligible educational institution for yourself, your spouse, or your dependent, you may be able to take advantage of one or more of the education tax benefits.You can claim more than one education benefit in a tax year as long as you do not use the same expenses for more than one benefit.

Exception:  Qualified expenses used to claim education benefits can also be used to eliminate the 10% penalty on premature IRA distributions.

You may claim only one of the following education tax benefits for the same student per year: tuition and fees deduction, American Opportunity Credit, or Lifetime Learning Credit.

Read the entire communication here Education Tax Benefits

Education Deductions.

Deductions reduce the amount of income subject to income tax. Deductions for education expenses include:

• Tuition and fees deduction up to $4,000 from gross income. Income limitations apply.

• The provision for deducting tuition and fees expired for tax years after 2013.

• Student loan interest deduction up to $2,500 from gross income. Income limitations apply.

• Business deduction on Schedule C or F. You can deduct the cost of education related to the business or farm activity.

• Miscellaneous itemized deduction on Schedule A, subject to the 2% AGI limitation. You can deduct the unreimbursed cost of education required to keep your current job or maintain and improve skills needed for your job. You cannot deduct the cost of education that qualifies you for a new trade or business.

Read the entire communication here Education Tax Benefits

Any accounting, business or tax advice contained in the Tax E Man Blog or http://www.PatTax.net, including attachments, links and enclosures, are not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax related penalties.

If desired, Pat Tax, Inc. would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired.

The Tax E Man Blog, along with our website http://www.PatTax.net, are designed to be year round resources for tax consultation, preparation and representation services provided by Pat Tax, Inc. . Please feel free to contact us with any questions or concerns.

Read the entire communication here Education Tax Benefits

Services We Provide Include 

• Income Tax Preparation for individuals and small businesses
•  Electronic filing of all Federal and State returns with direct deposit of refunds
• Scheduled electronic payment of balance due
• Income Tax Consulting
• IRS Tax Representation
• Unified Tax Returns
•  Amended Tax Returns

“Empowering clients thru education, a stress free transaction and an excellent service experience.”

 

Charitable Organizations

Qualified charitable organizations include nonprofit groups that are religious, charitable, educational, scientific, or literary in purpose, or that work to prevent cruelty to children or animals.

Expenses Incurred While Volunteering

Out-of-pocket expenses incurred in performing volunteer work for a charitable organization (including the charitable mileage deduction) are considered cash contributions. The value of a donor’s time is not deductible.

Read the entire communication here Charitable Contributions Guide

Contributions That Benefit the Taxpayer

If a taxpayer receives a benefit in exchange for a charitable contribution, the deduction is reduced by the value of the benefit received.

Example: Paul made a $70 donation to Public TV and received a $40 CD of his all-time favorite band, Herman’s Hermits, in appreciation for his donation. His deduction equals $30.

Auto Expenses

Deductible out-of-pocket expenses include the cost of using the taxpayer’s auto in providing services for a charitable organization. Deduct the actual cost of gas and oil or the standard mileage rate. Add parking and tolls to amount claimed for either standard mileage rate or actual expenses. A mileage log is required.

Read the entire communication here Charitable Contributions Guide

Standard Mileage Rate

The general standard mileage rate for charity is 14¢ per mile in 2014.

Contributions of Property

If used items were given to charity, such as clothing or furniture, the fair market value of the items is used to determine the deductible amount. Fair market value is what a willing buyer would pay a willing seller when neither has to buy or sell and both are aware of the conditions of the sale.

Planning Tip:  Most cell phones today can take pictures. Take a picture of all items donated. Keep the electronic pictures for proof the items were in good used condition or better at the time they were donated.

Note: No deduction is allowed for a charitable contribution of clothing or household items unless the clothing or household item is in good used condition or better. The IRS is authorized by regulation to deny a deduction for any contribution of clothing or a household item that has minimal monetary value, such as used socks and undergarments.

Read the entire communication here Charitable Contributions Guide

Any accounting, business or tax advice contained in the Tax E Man Blog or http://www.PatTax.net, including attachments, links and enclosures, are not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax related penalties.

If desired, Pat Tax, Inc. would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired.

The Tax E Man Blog, along with our website http://www.PatTax.net, are designed to be year round resources for tax consultation, preparation and representation services provided by Pat Tax, Inc. . Please feel free to contact us with any questions or concerns.

Services We Provide Include 

• Income Tax Preparation for individuals and small businesses
•  Electronic filing of all Federal and State returns with direct deposit of refunds
• Scheduled electronic payment of balance due
• Income Tax Consulting
• IRS Tax Representation
• Unified Tax Returns
•  Amended Tax Returns

“Empowering clients thru education, a stress free transaction and an excellent service experience.”