Work Income

by Peter
(Uvalde tx. usa)

How much can I earn before paying income tax on it.

How much you can earn before paying income tax on it depends upon your filing status. In 2010, If you are single, under the age of 65 and cannot be claimed as a dependent by another you get a $5,700.00 standard deduction and $3,650.00 exemption for a total of $9,350.00. This means that you can make up to $9,350.00 without having to pay income taxes on it. See IRS Pub17 at www.irs.gov for more information.

Thank you for your question.

Work Pay Credit

If part of my gross income is unemployment compensation can i still recieve the work pay credit?

Worked for Only 3 Months Last Year

I worked for only 3 months last year, & tax was not deducted by my company, do i need to file income tax, am not working since about an year.

Working From Home

by Roger Ludgate
(Ashby De La Zouch, Leics)

I am a UK Sales Manager for a German manufacturing company, hence I have no office in the UK. Can I claim for a partial amount of the rent that I pay to run an office from home, likewise can I claim for electricity for power and light?

If you are using an area in your house exclusively for business, you may be able to claim office in home deductions for rent and utiliies based on your percentage of business use.

Per the IRS:

Whether you are self-employed or are an employee, you may be able to deduct certain expenses for the part of your home you use for business despite the general denial of business expense deductions for the home.

To deduct expenses for business use of the home, part of your home must be used regularly and exclusively as one of the following:

The principal place of business for your trade or business

The place where you meet and deal with your patients, clients, or customers in the normal course of your trade or business; or

In connection with your trade or business, if you use a separate structure that is not attached to your home

Where the exclusive use requirement applies, you cannot deduct business expenses for any part of your home that you use for both personal and business purposes. For example, if you are an attorney and use the den of your home to write legal briefs and also for personal purposes, you may not deduct any business-use-of-your-home expenses. Further, under the principal-place-of-business test, you must determine that your home is the principal place of your trade or business after considering where your most important activities are performed and most of your time is spent, in order to deduct expenses for the business use of your home. Additionally, a portion of your home may qualify as your principal place of business if you use it for the administrative or management activities of your trade or business and you have no other fixed location for that trade or business where you conduct substantial administrative and management activities.

Deductions also may be taken for regular use of a residence for the provision of day care services or for business storage purposes; exclusive use is not required in these cases. You also may take deductions if you rent out your residence. For more information, see Publication 587.

Deductible expenses for business use of your home include the business portion of real estate taxes, deductible mortgage interest, rent, casualty losses, utilities, insurance, depreciation, maintenance and repairs. You may not deduct expenses for lawn care in general or for painting a room not used for business.

When figuring the amount you can deduct for the business use of your home, you can use the entire amount of expenses attributable solely to the portion of the home used in your business. The amount you can deduct for expenses attributable to the whole house depends on the percentage of your home used for business. To figure this percentage, you may divide the number of square feet used for business by the total square feet in your home. Or, if the rooms are approximately the same size, divide the number of rooms used for business by the total number of rooms in your home. You figure the business portion of your expenses by applying this percentage to the total of each expense. If you are a qualified day-care provider who does not use any area exclusively for day care, your business portion is further limited by the ratio of the number of hours the area is used exclusively for business to the total number of hours the portion was available for any use.

If your gross income from the business use of your home is less than your total business expenses, your deduction for certain expenses for the business use of your home, other than mortgage interest, taxes, casualty losses, and the like is limited. However, those business expenses that can not be deducted because of the gross income limitation can be carried forward to the next year but will be subject to the deduction limit for that year.

If you are self-employed, use Form 8829 (PDF) to figure your business-use-of-the-home deductions and report those deductions on Form 1040, Schedule C (PDF).

Publication 587 has detailed information on rules for the business use of your home, including how to determine if your home office qualifies as your principal place of business.

Working Son

If I claim my son on my taxes and he has worked and has W2's, do I need to enter his tax info.? If so, will this help or hurt me?

Working With Charities

by Toni Saxon
(Georgia)

I am currently serving on the board of a girls orphanage in Honduras. We have a board in Honduras and one in the US. This is not a paid position and the orphanage is a 5013C organization. I travel to Honduras several times a year to help at the orphanage and to help supervise teams that come there to help out. My question is this: Are my travel expenses to and from the orphanage tax deductible?