Monday, December 18, 2006

REPORTING those RENEWED DEDUCTIONS



HOW TO REPORT THOSE RENEWED DEDUCTIONS:
You will need to enter the amounts for Educator Expenses, Sales Tax and Tuition and Fees deductions on a line provided for another deduction and place a code to the left of the entry. Both the described deduction and the renewed item will have to be totaled and entered as a single amount

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EDUCATOR EXPENSE DEDUCTION FOR SUPPLIES:
Enter on Line 23, Form 1040- the line provided for Archer MSA deduction.
Codes: E for Educator Expense, B for Both, No code for MSA only.
TUITION AND FEES DEDUCTION:
Enter on Line 35, Form 1040-the line provided for Domestic Production activities
Codes: T for Tuition and fees. B for Both. No code for Domestic Production only
STATE AND LOCAL SALES TAX DEDUCTION:
Enter on Line 5, Schedule A-the line provided for State and local Income tax.
Code= ST
This is an either/or deduction, so there will be NO code B.
This information is not intended to be advice to the recipient.In compliance with Treasury Department Circular 230, unless stated to the contrary, any Federal Tax advice contained in this Blog was not intended or written to be used and cannot be used for the purposes of avoiding penalties.

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