Who Else Is Using Your Identity?

These days it seems like everyone knows someone who has had their credit card hacked, been scammed over the phone or computer.  Even the IRS is grappling with the issue of fraud and identity theft.  According to the IRS, identity theft tax refund fraud is its number one fraud.  This happens when someone steals an individual’s personal information, files a fraudulent tax return using someone else’s social security number and has the refund deposited into their own account.  Often, the victim is unaware of what happened until they try to file their own tax return.

Year-End Tax Tips

1.      Review your portfolio.  Consider taking a loss if you have substantial capital gains.

2.      Max out your retirement plan contributions.  2014 maximum IRA contribution is $5,500 (plus $1,000 if age 50 or over).  2014 maximum 401(k) contribution is $17,500 (plus $5,500 if age 50 or over).

3.      Consider contributing to a 529 Plan if you have children or grandchildren.  For example, New York allows a deduction up to $5,000 (or $10,000 for married filing joint filers) for contributions made by an account owner to an account belonging to New York’s 529 College Savings Plan.

Deduction Series: Job Hunt Expenses

Are you considering a new job in your current line of work?  If so, the costs associated with your job hunt may reduce your income taxes!

In order to qualify, expenses must be incurred while searching for a job in the field in which you are currently employed.  You may deduct job search costs that are in excess of 2% of your adjusted gross income (AGI), and you must itemize your deductions when you file your income tax return.

Among the costs you can deduct are:

Resume Costs – Includes the cost of preparing, printing and mailing your resume.

Placement Agency Fees – Includes agency fees you pay while looking for a job in same occupation.

 

Travel and Transportation Expenses – Includes expenses for travelling to a new area to look for a job in your current field.  The trip must be for the primary purpose of looking for a job.  You should track your time and make sure that your time was primarily devoted to your job search to ensure the travel costs qualify.   If you use the standard mileage rate to compute your auto expenses, the 2014 rate is 56 cents per mile.

Honorine M. Campisi, CPA