Thursday, May 21, 2015

Deductions for Volunteers


Q.  My spouse and I are volunteers at a State Park, approximately 300 miles from our home for 6 weeks. We are not full timers, and are paying for our own travel expenses, meals, plus providing supplies for me to run their Interpretive program and arts/crafts.  Also, I use my POV to distro activity flyers each week at seven locations throughout the park. We also use POV to drive 14 miles RT to obtain supplies, run errands (I paid $55 to print and laminate posters and teaching materials). 

We are keeping gas receipts and logging about 15 miles/day 3-4 times each week. Park provides a RV site, uniform shirt, but we had to purchase work pants, shoes, gloves plus lots of bug spray. 

What are our possible IRS allowable deductions?

A.  Travel from your home to your work place is considered "commuting" and therefore is not a deduction. However, the mileage you put on your POV for business purposes is deductible. In order to take the deduction you must have a log book, kept on a contemporaneous basis showing the mileage & business purpose for your mileage. Personally I keep a little pocket calendar in the glove box of my car during the tax filing season to keep track of mileage for numerous trips to the post office and banks, and the occasional trips to business clients. The IRS is very strict about this: no log, no deduction!

All of your out-of-pocket costs for supplies are deductible. The costs of your uniforms which I know are required are also deductible. The really good news is that the use of your parking space is considered to be for the convenience of your employer, and therefore a tax free benefit! 

Thanks for being a volunteer at one of our beautiful state parks. We just left Valley of the Rogue State Park in OR yesterday and enjoy every minute of our stays in the few state parks where a big rig can fit! Thanks also for writing and stay safe.

Monday, May 18, 2015

What Exactly is an RV Lot?

Q.   I just found your Blog. It is tremendous and has excellent advice.
 
I am hoping you can lead me in the right direction with my question.
 
I owned an RV site. I bought it in 2006 and used it personally until 2011. In 2011 I converted it to full time RV site rental use. It has been in a rental program managed by the park company (they work for the owners) since then. It has a concrete pad, a small dog house with electrical links and a small storage shed. It has had no personal use since 2011. I sold it in 2014 at an approximately a 50% profit.
 
The Federal tax books identify all sorts of properties that one may own and how to treat them tax wise - residential, real, and etc. However, they do not mention RV site.
 
I am struggling with how to label the property and what forms to use for the sale. Do you have any suggestions?


A.  RV lots are like any other lot anywhere: real property. Improvements are just that. When you sell your RV lot, your tax basis would be the purchase price together with the cost of purchase along with the capital improvements you added to your lot. In this case you added a concrete pad, dog house, a storage shed, and electrical connections. The total of this becomes your "tax basis" and when deducted from your net selling price results in either a capital gain or loss. This is reported on form 8949 and ultimately Form 4797 (if you took any depreciation on the capital improvements) and Schedule D. Thanks for a good question!

Friday, May 15, 2015

Time is Money!

Although I try to post questions as they come in, this year became too hectic. Along with new clients, many new schedules, and all those ACA (Affordable Care Act) questions and forms, I got really behind. Hopefully I got back to you as individuals so as not to hold up the filing of your return. I finally had to give up posting some questions, and will now endeavor to post those that may be of general interest. Thanks for your patience and as always, I really appreciate your following this blog!

Wednesday, May 6, 2015

State analysis of Retiree friendly places to retire.

Yesterday my husband & I were privileged to join several members of the management team Dowling & Yahnke Wealth Manaegment for lunch & to discuss various issues. Over the years we have guided several clients to each other's firms for help with various issues.

When passing out our travel cards (not business cards) with the picture of The Popeye Express along with this website, the discussion turned to issues surrounding questions which most RVers ask, the most frequent one being "Where to Retire?".

Gregory Richardson responded later in the day with a link to this website which I find most interesting:  Kiplinger State-by-State Guide to Taxes on Retirees. See what happens when you meet really good people!

And speaking of wealth management, I can think of no better way to return the favor than to post a link to their website: Dowling & Yahnke in case you should need their services.

Monday, February 23, 2015

Working from Home (or your RV)

Every once in awhile I run across an interesting and informative article which I consider to be worthwhile from an RVers point of view. This link to Five Things you Need to Know about Taxes. . . is one of them. Not everything pertains to RVers, but there is enough good stuff in here to keep you on your toes, especially if you are from one of the states mentioned in the article.

Sunday, February 1, 2015

Mea Culpa

In regard to using the per diem rates for travel expenses, a kind reader wrote in. I quote:

"Regarding M&IE rates (per diem rates), IRS Publication #1542 does in fact only mention employers and employees, but that does not mean that per-diem rates cannot be used by self-employed people. Some IRS laws use the word "employer" to include self-employed individuals. It is obviously confusing to people.

This is excerpted from the 2015 U.S. Master Tax Guide, paragraph 954(b): "Self-employed individuals may use the "M&IE-only" rate [meals and incidental expenses only] to substantiate meals and incidental expenses while traveling away from home...[however] the amount of lodging costs must be proven by documentary evidence."

Thank you so much, D. Broughton for your help. I try to do my best, but no one knows all the ins and outs, much less the conflicting areas in our tax code. If ever you find a problem area, please don't be shy about, but let me know. We are all in this together trying to help each other out!

Thursday, January 22, 2015

New Possible Reason to File a Return

With the filing season just getting off to a full swing, I thought I'd review the reasons you need to file a return.  They are:

  1. The amount of your total income, and the filing status for your age
  2. If you had taxes withheld during the year, or if you paid estimated tax payments, you will need to file in order to claim a refund
  3. If you worked and earned less than $52,427 you may be eligible to claim the Earned Income Tax Credit
  4. If you have children under the age of 13, you might qualify for the Additional Child Tax Credit
  5. If you or your dependent were a student at a post secondary educational institution for at least half time (for a minimum of 1 academic period) you may qualify for the American Opportunity Credit which can be up to $2,500
and New for 2014

If you purchased health insurance through the Health Insurance Marketplace in 2014 and chose to have advance payments of the premium tax credit sent directly to your insurer, you must file a federal tax return.

In order to file, you must first receive Form 1095-A which is supposed to be mailed to you by January 31.

Additional resources can be found at www.irs.gov for:

  • The Premium Tax Credit
  • Form 8962 Premium Tax Credit (PTC)
  • Publication 5187, Health Care Law
  • Schedule 8812 (Form 1040A or 1040) Child Tax Credit
  • Form 8863 Education Credits
  • Publication 596, Earned Income Credit
  • Publication 972, Child Tax Credit
  • Publication 970, Tax Benefits for Education
IRS YouTube Videos & Podcasts are available for:

  • Do I have to File a Tax Return?
  • Premium Tax Credit
  • Education Tax Credits
I expect this may be a frustrating tax filing season. Please allow plenty of time for preparation, but don't put off filing until the last minute. Doing so increases the odds of scamers filing early using your social security number and claiming your refund.