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A time of transition, changing jobs may lower your taxes

September is often a time of transition, when people decide to make major life decisions–such as changing jobs. If you’re looking for a new job, then you may be able to claim a tax deduction for some of your job hunting expenses–as long as it’s in your same line of work. Here are seven things you need to know about deducting these costs: 1. Your expenses must be for a job search in your current occupation. You may not deduct expenses related to a search for a job in a new occupation. If your employer or another party reimburses you for an expense, you may not deduct it. 2. You can deduct employment and job placement agency fees you pay while looking for a job. 3. You can deduct the cost of preparing and mailing copies of your resume to prospective employers. 4. If you travel to look for a new job, you may be able to deduct your travel expenses. However, you can only deduct them if the trip is primarily to look for a new job. 5. You can’t deduct job search expenses if there was a substantial break between the end of your last job and the time you began looking for a new one. 6. You can’t deduct job search expenses if you’re looking for a job for the first time. 7. You will usually claim job search expenses as a miscellaneous itemized deduction, but can deduct only the amount of your total miscellaneous deductions that exceed two percent of your adjusted gross...

Which Moving Expenses are Deductible?

If you moved due to a change in your job or business location, or because you started a new job or business, you may be able to deduct your reasonable moving expenses; however, you may not deduct any expenses for meals. If you meet the requirements of the tax law for the deduction of moving expenses, you can deduct allowable expenses for a move to the area of a new main job location within the United States or its possessions. Your move may be from one United States location to another or from a foreign country to the United States. Note: The rules applicable to moving within or to the United States are different from the rules that apply to moves outside the United States. These rules are discussed separately. To qualify for the moving expense deduction, you must satisfy three requirements. Under the first requirement, your move must closely relate to the start of work. Generally, you can consider moving expenses within one year of the date you first report to work at a new job location. Additional rules apply to this requirement. Please contact us if you need assistance understanding this requirement. The second requirement is the “distance test”; your new workplace must be at least 50 miles farther from your old home than your old job location was from your old home. For example, if your old main job location was 12 miles from your former home, your new main job location must be at least 62 miles from that former home. If you had no previous workplace, your new job location must be at least 50...

Renting out a Vacation Home

Tax rules on rental income from second homes can be complicated, particularly if you rent the home out for several months of the year, but also use the home yourself. There is however, one provision that is not complicated. Homeowners who rent out their property for 14 or fewer days a year can pocket the rental income, tax-free. Known as the “Master’s exemption”, because it is used by homeowners, near the Augusta National Golf Club in Augusta, GA who rent out their homes during the Master’s Tournament (for as much as $20,000!). It is also used by homeowners who rent out their homes for movie productions or those whose residences are located near Super Bowl sites or national political conventions. Tip: If you live close to a vacation destination such as the beach or mountains, you may be able to make some extra cash by renting out your home (principal residence) when you go on vacation–as long as it’s two weeks or less. And, although you can’t take depreciation or deduct for maintenance, you can deduct mortgage interest and property taxes on Schedule A. In general, income from rental of a vacation home for 15 days or longer must be reported on your tax return on Schedule E, Supplemental Income and Loss. You should also keep in mind that the definition of a “vacation home” is not limited to a house. Apartments, condominiums, mobile homes, and boats are also considered vacation homes in the eyes of the IRS. Further, the IRS states that a vacation home is considered a residence if personal use exceeds 14 days or more than 10%...

website design has been moved

We have reinvented the design part of the business and move it to its own company,  awfedesign, separating out the logical from the abstract. Awfedesign will be offering more services and packages for design work: website design, illustrations, art designs, logos, etc. We are also adding more ways to buy domains, emails and hosting packages. Click on the link and check out our new design...

When does tax season start?

We here at chaoticcancellation are busy getting your end of year financials in order, reconciling December statements and generally getting caught from the end of the year 2012.  We hope that by mid-February, we will be able to start tax preparation and getting your tax returns done early and/or sending your financials to your CPA. January is our time to get caught up and the Internal Revenue Service has announced that it has revised its opening date for tax season, pushing it out just eight days to January 30, 2013. Normally, the tax season opens on January 22 each year however due to tax legislation, its been pushed out. The statement on the IRS website The IRS is currently reviewing the details of this week’s tax legislation and assessing what impact it will have on this year’s filing season. The IRS will soon make available additional information on when taxpayers can start filing 2012 tax returns. What this means is that the IRS will begin accepting tax returns on January 30, 2013. Most taxpayers should be able to file on that date though some taxpayers will have to wait a bit for revised forms. Those include folks claiming residential energy credits, depreciation of property or general business credits. Mid-February is when we will start processing tax returns for our...

Online Accounting

Online Accounting Finally!! Many of you have been asking for an online accounting solution and we have finally found a great solution, it’s called Xero which we have partnered with. We are in the process of getting certified and if you are interested, we will be more than happy to convert your QuickBooks File to Xero so you can see your cash flow in...