Staples $5K Tax Giveaway

Transcript of the Staples and TaxMama Twitter Tax Event 2/28/12

I want to thank EVERYONE who joined us, retweeted us and asked great questions.

Staples:  Kick off tweets 

Welcome to our Twitter tax event! We were here with @TaxMama, ready to lay down some tax tips and answer questions.    Okay, here we go! Take it away, @TaxMama. 

TaxMama:  Topic 1: Tax brackets

Info provided here doesn’t constitute personal tax advice. Tax laws are complex; please consult w/ your personal tax advisor. 

Welcome! @TaxMama here. For the next hour I’ll be tackling a ton of tax topics. First up: filing status and exemptions. 

Choose from: single, married filing jointly, married filing separately, head of household, widow(er) w/ dependent child.  

Your filing status determines filing requirements, standard deduction, correct tax, and certain deductions/credits.  

If you’re eligible to file under more than one status, generally choose the one that gives you the lowest tax.  

For widows and widowers with or without a dependent child, your status depends on a few factors.  

You may file single if widowed b4 1/1/11 & didn’t remarry in ’11, or you may want to file differently http://1.usa.gov/yzkPbq

 Ever hear of Alternative Minimum Tax (AMT)? It ensures we all pay a minimum tax after exclusions, deductions and credits. 

The AMT exemption provides a basic exclusion for taxpayers who are required to pay AMT. 

Here’s a secret. You CAN reduce the dreaded AMT. 2 sets of credits reduce it – See Form 1040, lines 47-54 and lines 64-71.  

Credits that reduce the AMT include Dependent Care, EITC, Homebuyers, Retirement Savers, Education, Child Tax credit & more.  

For more info on AMT – like why it exists, how it’s changed and how it affects you, check out this link http://tax.sh/ycSPzp  

Self-employment (SE) tax is Social Security & Medicare taxes for people who work for themselves. Use Schedule SE (Form 1040).  

SE tax rules apply regardless of age or whether you’re already receiving Social Security or Medicare. 

Do you have a question about anything I’ve talked about so far? Please post your question in the TaxQuips Forum.   

 Topic 2: Dependents

 

Alright, next up: dependents. Wondering if you can claim someone, or yourself, as a dependent? Let’s find out. 

Each dependent may be claimed by only one taxpayer. A dependent is defined as a qualifying child or relative.

A qualified child must live with you for 6+ months. A relative qualifies if you provide for more than 50% of their total support.  

For more qualifying child and relative requirements, check out this page: http://1.usa.gov/xsq71e   

If you’re someone’s dependent, you may still have to file your own taxes, dep on income, marital status & any special taxes.  

Also, if someone claims you as a dependent, you may not claim your own personal exemption on your own tax return. 

What if a stepchild lives with a stepparent after a divorce? The stepparent can still claim the stepchild as a dependent. 

If you’re someone’s qual. child, you aren’t eligible for Earned Income Tax Credit. EITC is a credit for low wage earners. 

Do you have a specific question about dependents or EITC? Please post your question in the TaxQuips Forum. 

Topic 3: Where is your tax home?

 

Do you live in one state (resident state) but work in another (nonresident state)? This next series of tweets is for you. 

You pay taxes in your nonresident state only on the wages you earn there.  

Do your federal return first, then nonresident state. Note the tax liability there. You’ll need it for your resident return. 

State income tax for folks working briefly in a city or state is called jock tax.  

Did you work in multiple states, even if only for a few days? You may still have to file returns in each state. 

You can deduct qualified travel expenses for temporary assignments (less than 1 year) away from your main place of work. 

If an assignment in another state lasts more than 1 year, that state might be considered your new tax home.  

Moving on to Travel! What fun!  

Travel outside the U.S. for business? You can deduct all travel expenses if less than 25% of time was for personal activity.  

Spouse and children travel with you? You can deduct their entertainment expenses only if there was a clear business purpose.  

Ex: You entertain a client and it’s impractical for their spouse not to join. If your spouse joins, expenses may be deducted. 

Make a permanent move for work? Moving expenses are deductible if you meet the following 3 reqs: http://1.usa.gov/xvrSyQ  

@TaxMama is here for all your moving and out-of-state tax questions, so please post your question in the TaxQuips Forum.  

Topic 4: Building a tax-friendly home office

 

Work from home, or looking to buy tax software? Stay tuned for my next tweets about a tax-friendly home office. 

Deductions for a home office are gen. based on the % of your home’s area devoted to biz. Details: http://1.usa.gov/zwoRsV 

No, office in home is NOT necessarily a red flag. 

Depreciation of the home business property must be deducted.   

You can hire your children to work in your business and deduct the cost. Make sure you can prove they are actually working.  

Now on to tax software. Consider these features: double checking, plain English, even payroll processing for employers.

TurboTax guides you step by step to your maximum refund and double checks for errors. See all titles. http://bit.ly/yQLOYE 

Staples also offers a selection of H&R Block and TaxACT software titles. Check them out here. http://bit.ly/AeQQwr  

Don’t forget personal finance software. It can organize personal accounts, categorize spending and more. http://bit.ly/zRw6sF  

Other great record-keeping tools are VersaCheck, Rediform, BlueLine and Dome. Find them at Staples.com. http://bit.ly/zUesaF  

All right, let’s hear from you. Any home office or tax software questions for @TaxMama? Please post your question in the TaxQuips Forum.  

 Topic 5: Deductions   

Time to talk deductions.

You can take a standard deduction or itemize. Itemize if the total exceeds your standard deduction. 

Standard deductions are based on your filing status and whether you’re 65+ or blind. See them here. http://1.usa.gov/zWSqj2  

Itemize when you have large, uninsured medical expenses, job expenses, theft or casualty losses or gave large amounts to charity. 

An activity is considered a business if it follows the “Three-Years-of-Profit Test.” But there are ways around that.  

Office supplies are valid business deductions, as are other ordinary or necessary expenses. More info: http://1.usa.gov/yCnan5 

Are you an employee looking to itemize? Find out what expenses are eligible here: http://bit.ly/z7mNwM  

Before employees can deduct expenses, they must submit all eligible ones to their employer. http://1.usa.gov/zF7Bqj  

Check out my YouTube clip about whether uniforms and work clothing are deductible expenses. http://bit.ly/wIPO13  

Small businesses get tax credits for providing health insurance to workers, even if they only have part-time staff. http://1.usa.gov/ytgIDX 

Self-employed? Deduct your health insurance costs – if you follow the special rules! http://bit.ly/wNqdSz  

In 2010, the Small Business Jobs Act removed the tough cell phone record-keeping rules. More info: http://1.usa.gov/xMZrGA

Attention students! If you had a student loan for qualified education expenses, you may be able to deduct up to $2,500 of interest.

Okay everyone, hit @TaxMama with your deduction questions. Let’s make sure you get the tax credits you’re entitled to. Please post your question in the TaxQuips Forum.

Topic 6: New Schedule D Form 8949 

 

Have you used Schedule D before?

There’s now a new form to report all capital gains and losses:  Form 8949.

You may find yourself using as many as SIX Forms 8949. Even your tax pro is frustrated

Event closing tweets – 8pm ET

 

That’s a wrap! Thank you for following the @Staples  Twitter event. Have any questions? @TaxMama is waiting! Please post your question in the TaxQuips Forum.  

Be sure to follow @TaxMama for more great tax tips. As for the winners, @Staples will DM the selected winner in the next week! 

And don’t forget to check out the latest tax deals and info on Staples.com now! http://bit.ly/zUesaF 

Q&A closing tweet – 9pm ET  

Again, thanks so much for joining and all your questions! Happy tax season to all and have a less taxing life!  

Remember to drop by at www.Staples.com for supplies and free delivery.

And drop by www.TaxMama.com for free answers to your questions.  

 

 

 

 

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