Unreimbursed Employee Business Expenses

Taxpayers that pay business expenses out of their pocket, but don't get reimbursed by their employer, may be eligible to deduct the expenses on their tax return.

1. Ordinary and Necessary: The IRS requires that the expenses be ordinary (common and acceptable in the industry) and necessary (appropriate and helpful to a business).

2. Examples of Expenses: Below is a list of potentially deductible expenses:

• Required work clothes or uniform not appropriate for everyday use
• Supplies and tools for use on the job
• Business use of a car
• Business meals and entertainment
• Business travel away from home
• Business use of your home
• Work-related education or certificates

          (The above list is not all-inclusive.)

3. Keep Good Records: The better your records, the easier it is to support your expenses in the event of an audit. Record keeping can include, but is not limited to, logs for mileage and meals, receipts, invoices, statements, etc.

To find out if you can deduct your unreimbursed employee business expenses, give us a call at (610)863-8347  for a free consultation.

Did you get married this year?

If so, here are a few ways how getting married affects your taxes:  

1. Name Change: If you are changing your name, you will need to notify the Social Security Administration. Your name on your tax return must match what is on file at the Social Security Administration.

2. Address Change: If you have moved, you will need to notify the IRS of your address change.

3. Filing Status Change: You have the option to file married filing jointly or married filing separately. In most cases, married filing jointly is more advantageous, but both statuses are something to consider before filing.

4. Withholding Change: You may want to change your tax withholding at work to take into consideration the new filing status and possibly additional deductions.

5. Tax Form Change: Now that you are married, you may be able to take itemized deductions, which requires additional forms and a longer tax return.

We are here to help determine the most advantageous filing status and get all of the proper forms filed after you get married. Give us a call at (610) 863-8347 for a free consultation!

Beat the Recapture Tax on Your Home Office

The depreciation you claim with your home-office deduction is subject to a recapture tax when you sell your home.

But you may be able to avoid the recapture tax by following one easy step when it comes time to sell your current home and buy a replacement. And you not only avoid the recapture tax, but you also increase your tax basis in your replacement home. This gives you a double dip in tax benefits.

You make this work by following IRS Revenue Procedure 2005-14, which shows you how to combine the tax-favored Section 1031 tax-deferred exchange and the Section 121 home-sale exclusion rules so that you can sell your home and

1. avoid some or all the taxes on the sale of the personal part of your home,
2. avoid and/or defer some or all the taxes on the sale of the office part of your home,
3. avoid and/or defer some or all the taxes on the sale of the rental part of your home, and
4. defer all the taxes on the depreciation recapture caused by the office or rental part of your home.

Before you take any steps to sell your home, contact us at (610) 863-8347 so we can help you make this tax-saving strategy work for you.