Gambling Losses are Tax Deductible

Gambling losses are tax deductible. But don’t go running out to your favorite casino and gamble a bunch of your money away thinking you’re going to get a tax deductions. Doesn’t work that simply.

Your gambling losses can be used to offset any gambling winnings you had during the year. Because as a quick reminder, you have to pay federal, state and maybe even local (like New York City) taxes on any money you make gambling.

Here’s how the losses help.

Let’s say you win $1,000 for the year gambling. Yeeee! The downside again is that it’s all taxable.

Now, let’s be honest and say you actually lost $3,000 during the year on your other gambling. The IRS won’t let you deduct the full $3,000 but they will let you write off $1,000 of those losses to offset the $1,000 gain. That’s how gambling losses help.

The important part in all this, keep receipts to show proof in case they ask for it.

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Children Offer Parents Some Great Tax Benefits

Between child tax credits, child and dependent care credits, an increase in deductions and exemptions, children do give parents some great tax benefits.

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Why Can’t We Just Make Taxes Simpler to Do?

It’s safe to say that most Americans want a simpler way to file their tax returns. It’s a sentiment that we all hear around the country. But the reality of how complicated many people’s lives are make the prospect of a simpler tax return almost impossible.

The tax code will always stay complicated because it incentives certain “trying, positive societal behavior.” Namely, going to college or a trade school, buying a home, running a business that employs people, having a family while working. And many others.

Yes, there is abuse and there is a need to fix a lot of our tax code. However, lets think about this scenario. If I sit in my relatives garage playing video games (not as a job) all day and contribute nothing to society, should I get the same treatment as someone who is “trying?” Going to school, struggling with daycare, etc.

That’s why the tax code will always be complicated in a nation of 320 million people.

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Free Tax Return Reviews

At TaxAssurances we love Turbotax by Intuit and all of the other self prep tax software out there! We would give it away for free if we could.

To most people that sounds strange. Why would a professional tax preparer like something that cuts them out completely and is cheaper competition?

I’ll tell you why. FREE REVIEWS!!! That’s why TaxAssurances loves Turbotax.

Over the years, in doing FREE REVIEWS of Turbotax and other self prepared tax returns that have already been filed with the IRS, TaxAssurances has realized that between 25 – 30% of the returns were wrong. Flat out!

The taxpayer cheated themself out of a bigger tax refund because they didn’t want to “pay someone a lot of money just to put numbers in the computer.” They could “do it themselves and save money.”

So when we’ve shown the taxpayer the hundreds or thousands of dollars extra in refunds they were entitled to but #missed, they gladly pay the extra $250 or more to #fixit and get their bigger refund. And tell friends what we did.

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Tax Prep Fee National Averages

Knowing what to charge clients in a service business is an art and a science. Any number of elements go into it. Time, work, competition, client budgets, just to name a few.

That’s why TaxAssurances is glad when independent organizations like the National Society of Accountants (NSA) releases results of national surveys letting us know what tax preparers are charging for their services. It provides a great point of reference for everyone.

In the survey, they cover not only personal tax returns but business returns as well.

Here are the results.

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Chapter from TaxAssurances’ Book: Educator Expenses

The following post is a chapter in the TaxAssurances’ book, “Top 12 Tax Deductions You Might Have Missed. Tax Tips For People Who Do Their Own Federal Taxes.”

You can purchase the full book on Amazon.

Chapter 11 Educator Expenses

Every year TaxAssurances prepares tax returns for a number of people in the education profession. They all spend countless hours preparing to help educate young children. Along with that time, these educators spend their own money helping educate children. The IRS rewards that effort in a small way by providing a tax benefit.

As a result, the IRS allows teachers, instructors, counselors, principals, and aides that work at least 900 hours in elementary or secondary schools deductions of up to $250 of any unreimbursed expenses.

Those expenses include:
• books
• supplies
• computer equipment
• Other equipment that they use in the classroom.

The IRS does have these following requirements on taking these expenses as a deduction:

“Qualified expenses are deductible only to the extent a number of such expenses exceed the following amounts for the tax year:

• The interest on qualified U.S. savings bonds that you excluded from income because you paid qualified higher education expenses,

• Any distribution from a qualified tuition program that you excluded from income,

• Any tax-free withdrawals from your Coverdell education savings accounts,

• Any reimbursed expenses not reported to you in box 1 of your Form W-2 (PDF).”

For more information about the educator expense deduction, read IRS Topic 458 on the IRS.gov website.

Again, You can purchase the full book on Amazon.

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Mileage As a Deduction (Guest Blogger: Arlene Perry )

Hello to all my entrepreneurs who are happily making that time-consuming commitment to creating a business for themselves and a legacy for their loved ones.

You’re busy running around, from client to client or location or location while running up all those miles on your vehicle. Well I have some good news for you. Those miles can be tax deductible. And in turn, will help decrease your taxable income. Because who in their right mind wouldn’t want to have less income to report to our best friend, Uncle Sam?

Business owners, including the self-employed, are allowed to deduct the mileage used for business. To do so, they have to use either the current IRS rate of 54 cents per mile or the business portion of their actual auto expenses. Expenses like gas, car payments and insurance. Whatever method they decide to use, they must have good, accurate, written records maintained and produced if ever the IRS should audit them.

The IRS does consider mileage deduction an easy target for auditing because there are strict restrictions on the type of mileage that qualifies as a deduction.

Individuals may also deduct their mileage if they are an employee who uses his or her car for business. Keep in mind though that the mileage Can’t Include Commuting To And From Work And Can’t Be Reimbursed By Your Employer. Here’s what Mileage can be deducted:

 Travel between 2 different work locations
 Travel to temporary work location (less than 1 year) from your home
 Travel for business related work errands, (ex. Banking, Purchasing Supplies, Setting up work events)
 Travel for clients’ meetings, both self-employed and employees
 Travel for business meetings or clients’ entertainment
 Travel to airports if related to clients

*****SELF-EMPLOYED PERSONS WILL CLAIM THEIR MILEAGE AS AN EXPENSE ON SCHEDULE C RATHER THAN ITEMIZING ON SCHEDULE A LIKE EMPLOYEES WILL DO****

In addition to the above rules, there are a few other things that can be beneficial to the tax payer. Here they are:

 People who are unemployed and traveling looking for work may deduct mileage to find a new job in their current occupation. BUT NOT traveling seeking employment in a new industry. They can deduct expenses paid traveling by public transportation.

 Those working full-time 39 weeks in the last 12-month period and have relocated at least 50 miles for work are entitled to claim a smaller deduction of 23 cents a mile

 For those working from home, usually the self-employed, there is no commuting mileage. So you claim all mileage traveling to business locations such as a second office or the clients’ locations.

As stated earlier in this post, it’s vital for individuals to keep accurate records when deciding to claim mileage. Audits by the IRS are unpredictable and have absolutely nothing to do with tax preparers.

Taxpayers are responsible for the upkeep of their own records. Which is why I also highly recommend they meet with a Bookkeeping or Accounting professional at least once a year. Twice for optimum benefits.

Additionally, I suggest investing in a travel log that can be obtained from any stationary store. And if individuals are technologically savvy, there are plenty of Apps available like QuickBooks Self-Employed. These will allow them to keep the records needed for the IRS if need be . They will need to show the number of miles for each trip, the date and time for each trip, the location they went to and the purpose of the trip which would include a client’s name if appropriate.

Mileage is a deduction/expense the tax payer is entitled to, but many bypass it because of the work involved. I say take every deduction you can and put in the effort because it can be worth it.

FOR ADDITIONAL INFORMATION ON THIS SUBJECT, REVIEW IRS PUBLICATION 463 at https://www.irs.gov/pub/irs-pdf/p463.pdf

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Arlene Perry, Bookkeeper, MBA
Arlene@ArlenesUnlimitedServices.Com

Arlene Perry, MBA is the owner of Arlene’s Unlimited Services; a full service tax preparation, bookkeeping and payroll business. Having had the business since 1998,  she serves the Manhattan and Bronx areas of New York City.

Within this time, Ms. Perry has worked with a variety of small businesses in different industries. They include security and retail as well as the bookkeeping of non-profit organizations.

Arlene graduated with a Bachelor’s degree in Accounting and a Masters degree in Business from Monroe College in New Rochelle, New York.

Prior to returning to college, Ms. Perry worked for the City of New York as a Police Officer. While serving, she prepared the tax returns for many of her co-workers and kept the financial records of a non-profit youth group that she was a part of.

Presently, Ms. Perry is working for a great non-profit organization focusing on keeping our youth out of the prison system. She’s also creating a side Baking Business. She’s a proud member of Real Sisters Rising, M & M Projects and Administrator of a Bookkeepers and Food Groups on FaceBook.

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