Sheri Muntean MS, CPA - Blog

The options for getting a tax benefit from education expenses are vast and difficult to understand and choose between. In 2009, you have the following opportunities to reduce your tax burden by disclosing education expenses on your tax return:

Business Related Education Expenses

If your education was required by law or your employer to keep your current job or pay rate or to maintain your current skill level at the job your currently hold, your education expenses are deductible as business expenses (to the exent they were not reimbursed by your employer). Travel and other related expenses are also likely to be deductible which are primarily related to these education expenses. If your education expenses were part of minimum requirements to get a job, qualify you for a new trade or business, or were not required to maintain your job or skill level they may not be deductible as business related expenses. However, they may still qualify for other deductions or credits.

Tuition Deduction

The ability to deduct qualified higher education expenses has been extended through 2009. "Qualified higher education" is defined the same way it is for the HOPE credit. You cannot deduct education expenses if you chose to use them...

Tags: american opportunity credit, business education, college, credit, deduction, education, hope credit, lifetime learning credit

Another reason to file a tax return no matter how much money you made...

If you earned income through active employment (versus from interest and dividends, for example), you probably qualify for the "making work pay" refundable credit. In 2009 and 2010, you will get a credit on your tax return of the lesser of $400 ($800 for married filing jointly) or 6.2% of your earned income.

What is a refundable credit? What this means is, even if you owe no taxes, you will still get a refund if you qualify for this (or any other) refundable credit.

Questions? Please email me at sheri@shamballacentre.com.

Tags: credit, individual, making work pay, refundable credit, tax

Interestingly, most individuals do not need to keep all their gas receipts and other auto-related receipts if they keep a milage log. In 2010, the standard milage rate for business use of a vehicle is up to 55 cents a mile, which is remarkable. The reason it is so high is the deduction is designed to take into account (and replace the calculations for) the depreciation on your vehicle, repairs, insurance, and fuel.

Keep in mind, commuting to work is NOT business usage and is not deductible. Trips to meetings and locations away from your primary place of business are deductible. Keep a written record of your trips (in a log or by keeping mapquest results documenting the distance you traveled to and from specific locations) and you can deduct legitimate business travel.

In 2010, charitable travel is deductible at 14 cents a mile, and medical related travel is deductible at 24 cents a mile (though the usual limitations on medical deductions do apply). Special rates are also applicable for mail carriers (47.5 cents per mile).

Rates do vary from year to year, so if you have questions about other years, please email me at sheri@shamballacentre.com!

Tags: business, business travel, deduction, expenses, standard milage rate, tax

Most people have heard about the First Time Homebuyer's Credit, but what many people don't know is that individuals who have already owned a home may still qualify.

Anyone who has not owned a home at any point in the last three years may be eligable for the credit. Owning a home before that time does not disqualify you. However, purchasing a home from a related party may disqualify you.

If you have questions as to whether you qualify for this credit on your 2009 individual income tax return, please feel free to ask!

Tags: credit, first, homebuyer, individual, tax, time