Reduce Your Taxes with Miscellaneous Deductions +
Tips for Taxpayers Who Owe Taxes
Your Taxes with Miscellaneous Deductions
If you itemize deductions on your tax return, you may be able
to deduct certain miscellaneous expenses. You may benefit from
this because a tax deduction normally reduces your federal
Here are some things you should know about miscellaneous
Deductions Subject to the Two Percent Limit.
You can deduct most
miscellaneous expenses only if they exceed two percent of your
adjusted gross income. These include expenses such as:
- Unreimbursed employee expenses.
- Expenses related to searching for a new job in the same profession.
- Certain work clothes and uniforms.
- Tools needed for your job.
- Union dues.
- Work-related travel and transportation.
Deductions Not Subject
to the Two Percent Limit.
Some deductions are not subject
to the two percent of AGI limit. Some expenses on this list
- Certain casualty and theft losses. This deduction applies if you held
the damaged or stolen property for investment. Property that
you hold for investment may include assets such as stocks,
bonds and works of art.
- Gambling losses up to the amount of gambling winnings.
- Losses from Ponzi-type
investment schemes (think Bernie Madoff).
Many expenses are not
deductible. For example, you can’t deduct personal living or
family expenses. Report your miscellaneous deductions on
Schedule A, Itemized Deductions. Be sure to keep records of
your deductions as a reminder when you file your taxes in
Summertime Tax Tip 2013-15)
8 Tips for Taxpayers Who Owe Taxes
most taxpayers get a refund from the IRS when they file their
taxes, some do not. The IRS offers several payment options for
those who owe taxes.
Here are eight tips for those who owe federal taxes.
1. Tax bill payments. If you get a bill from the IRS
this summer, you should pay it as soon as possible to save
money. You can pay by check, money order, cashier’s check or
cash. If you cannot pay it all, consider getting a loan to pay
the bill in full. The interest rate for a loan may be less
than the interest and penalties the IRS must charge by law.
2. Electronic Funds Transfer. It’s easy to pay your tax
bill by electronic funds transfer. Just visit IRS.gov and use
the Electronic Federal Tax Payment System. You may also use
EFTPS to pay your taxes by phone at 800-555-4477.
3. Credit or debit card payments. You can also pay your
tax bill with a credit or debit card. Even though the card
company may charge an extra fee for a tax payment, the costs
of using a credit or debit card may be less than the cost of
an IRS payment plan. To pay by credit or debit card, contact
one of the processing companies listed at IRS.gov.
4. More time to pay. You may qualify for a short-term
agreement to pay your taxes. This may apply if you can fully
pay your taxes in 120 days or less. You can request it through
the Online Payment Agreement application at IRS.gov. You may
also call the IRS at the number listed on the last notice you
received. If you can’t find the notice, call 800-829-1040 for
help. There is generally no set-up fee for a short-term
5. Installment Agreement. If you can’t pay in full at
one time and can’t get a loan, you may want to apply for a
monthly payment plan. If you owe $50,000 or less, you can
apply using the IRS Online Payment Agreement application. It’s
quick and easy. If approved, IRS will notify you immediately.
You can arrange to make your payments by direct debit. This
type of payment plan helps avoid missed payments and may help
avoid a tax lien that would damage your credit.
Taxpayers may also apply using IRS Form 9465, Installment
Agreement Request. If you owe more than $50,000, you must also
complete Form 433F, Collection Information Statement. For
approved payment plans the one-time user fee is $105 for
standard and payroll deduction agreements. The direct debit
agreement fee is $52. The fee is $43 if your income is below a
6. Offer in Compromise. The IRS Offer-in-Compromise
program allows you to settle your tax debt for less than the
full amount you owe. An OIC may be an option if you cannot
fully pay your taxes through an installment agreement or other
payment alternative. The IRS may accept an OIC if the amount
offered represents the most IRS can expect to collect within a
reasonable time. Use the OIC Pre-Qualifier tool to see if you
may be eligible before you apply. The tool will also direct
you to other options if an OIC is not right for you.
7. Fresh Start. If you’re struggling to pay your taxes,
the IRS Fresh Start initiative may help you. Fresh Start makes
it easier for individual and small business taxpayers to pay
back taxes and avoid tax liens.
8. Check withholding. You may be able to avoid owing
taxes in future years by increasing the taxes your employer
withholds from your pay. To do this, file a revised Form W-4,
Employee’s Withholding Allowance Certificate, with your
employer. The IRS Withholding Calculator tool at IRS.gov can
help you fill out a new W-4.
For more information about payment options give is a call at
IRS Summertime Tax Tip 2013-14)
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