Tax deduction question

[dss62467]

Hey everyone! I haven't been here in awhile. Hope everyone is doing well. My home PC is at the doctor's because I tried to play desktop support with it and totally hosed it up. So I haven't been online very much. I also haven't been exercising much because it's still to stinking hot and now I've got prickly heat rash on my neck, which will just get irritated by sweating more. That's my story and I'm stickin' with it.

But here's my question for anyone who has a clue about taxes. I just ordered a Dell handheld. With my new job, when I actually get up to speed, I will be asked to work weekends sometimes - so I figured a handheld would be a great way to allow me the freedom that I'll want and still be able to do what's required of me, since I'll be able to do it through the Internet. So I'm wondering if that handheld will be tax deductible as an unreimbursable business expense?

 

[luvtorun]

Donna,

I do my taxes each year with Tax Cut. My husband has a lot of business expenses but some of not deductible. This is what Tax Cut has "told" me when I researched the IRS database. If the business expense is required by the employer and not reimbursed, it is deductible. If it not required but you use it for business, it is not deductible. I wanted to deductible DH's cell phone since he uses it on the job but his employer does not require him to have it, so the IRS database told me that I could not deduct it.

 

[Debra L]

The business portion of the handheld is deductible on Schedule A, but only the amount that exceeds 2% of your AGI. And right out of the 2004 Form 1040 instructions for Schedule A: "An expense does not have to be required to be considered necessary."

You can get more details in Publication 529 at the IRS.gov website.

I'm a CPA.

Debra

 

[Kit_]

I was going to reommend seeing a tax person, most of the software stuff that you do it yourself and send your taxes in, will cheat you out of things, because it's not a live person, who completely understands the situation. The diffenece bettwen Tax Cut and my tax person was insane this year. Tax Cut = $50 back, my tax man = $4000 back. I will always, mail all my info to my CPA from now on, even with his fee, the amount I got was well well worth it. But you got to have a good one, some of them who just use Tax Cut or whatever once your there, are worthless. As then they are just doing what you can do, and not really looking at all the true info, the IRS has to look up and see how this or that is really used. This is also why the H&R block can say bring your taxes into us, we'll get you more money back then if you do it yourself. They know the computer software that helps you with your taxes down't allow for all the deductions. Or at least tell you about them, correctly.

Kit

 

[dss62467]

Yeah, I think I'll buy that. I used Turbo Tax this year and it's been a nightmare with the IRS. They keep sending me stuff that I owe more money, then send a refund, then send me a bill for the refund they just sent. They're making me nuts! I'm definitely going to a CPA from now on. Is H&R Block good?

 

[WantFit]

I used H&R Block before. I don't have good experience. They used very inexperienced young people, sounds to me like just grad. They acted more like sales person then professional. They kept telling me that I should buy insurance from them, that insurance will guaranttee no problem with IRS. And they asked questions made no senses. I am not CPA, but I am in this field. It just irritated me.

I am suggesting you find the local paper or phone books, trying to talk to them, asking them how many years they have been doing tax filing, do they have experience in situation like your case? What is the procedure? How long you expect them to finish your filing after you submit all your paper work? Also ask for reference. Last year, I had a nightmare. I gave my tax prepareor all documents in Mar. But he did not finish until a couple days before deadline. Then he some how did not file it online.

Good Luck

WantFit

 

[luvtorun]

I actually called the IRS hotline and posed this question. The lady I spoke with referred me to the same publication I had found myself and reiniterated that fact to me. If this was an error, I may have a tax service check it out next year. I would love to deduct his cell phone expense.

 

[renodebbie3]

I am also a CPA and I agree with Debra, unreimbursed employee business expenses are deductible on Schedule A under miscellaneous itemized deductions. Only the portion used for business is deductible.

 

[catwoman]

I used to work for H&R Block and my office was quite excellent. We had some very knowledgeable associates...and we didn't always do what corporate asked us to do regarding pushing other products. I know I didn't. I was like, "These people are here to get their taxes done, not buy insurance or IRA's".

Now, in defense of that, some recent tax laws made opening an IRA highly profitable for some people. In their cases, we pushed the IRA because it sometimes increased their tax refund hundreds of dollars (enough to offset opening the IRA by quite a nice margin). Also, the "insurance" that was referred to I believe is what was called "Peace of Mind". I always recommended this to someone who had a complicated return, because it served as "insurance" that if the IRA came back to the person and said, "You owe us more money," H&R Block would pick up the tab, pay the fees, and pay the back taxes. We did this as a means to take care of our customers if we made a mistake on their tax return (and, let's face it, H&R Block preparers are human and CAN make mistakes on occasion).

So, that explains the hub-bub with H&R Block.

All-in-all, I think H&R Block is an excellent choice for tax preparation. Other tax prep companies even send their employees to H&R Block's training/certification classes. Remember, too, that some H&R Blocks are franchises. Make sure you get one that is affiliated with the corporate headquarters, and not a franchise, and aske specifically for their most experienced tax professional.

Tax laws have changed too much for me to be able to answer the specific tax question at hand, though. I believe you'll find the answers to your questions in the instructions for Schedule A (you have to be able to itemize deductions to claim a business expense) and at the IRS website.

 

[GraceNote]

I'm not a tax expert, but I DID stay at a Holiday Inn Express... That being said, I have deducted 'the business portion' of some home office items that weren't necessarily required by my employer. I used to work from home a specified number of hours per week, and continued to do so on an 'as-needed' basis. I needed some things to make my life easier (fax machine, special paper, presentation materials, etc.) I've never had any trouble with the IRS over it - of course, check back with me after seven years, right? (Isn't that the statute of limitations?) If you don't work a regular home schedule, I'm not sure how the proration works, but that would probably be best left to a professional to make sure you stay in the green zone. Good luck!