Tag Archive for Kathryn Morgan

Research Basics – Part 1 of a 6 Part Series On Research

TaxConnections Picture - IRS OnlineIt is important, especially in a profession like ours that involves people’s money, that we have good verified sources of research. Of course there’s the grand daddy of all sources, the IRS itself. How many of you surf the IRS website frequently? Like the new format that came out last summer? Find it easier to use? I don’t know about you, but the search engine was never awesome to begin with and now it’s even worse and harder to use in my opinion.

Many companies have jumped into the breech in translating “IRSese” into plain language. Some of these are free access and some are paid access. I have tried many of them with varying degrees of success or failure. My requirements for a research resource are fairly simple.

1. It must be authenticated.

2. It must be broad scoped.

3. It must be user friendly.

4. It must have a super search engine.

So does that mean I only do research online? Nope, you can ask my co-workers, I’m always coming in with new books, magazines, newsletters, and other things with tax news in them. Read More

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Mining Nuggets of Gold From Military Tax Reporting Documents Part 2

Continuing our discussion on the Military Leave and Earnings Statement (LES) and how it can help your clients.  Today we are going to rev up your client’s itemized deductions.

The LES and Itemized Deductions

Let’s look at some other areas of the LES.  Military members get lots of different types of pay and allowances depending on their job, marital status, where they live and where they are assigned.  Other than base pay, enlistment or special duty bonuses, most of these allowances are non-taxable.  Of course, you are all aware that all combat and hazardous duty pay is also non-taxable.  For the most part DFAS, the military pay system, is pretty good about getting these numbers right on the LES and the W2s, but it never hurts to check.

There are several items on the LES that affect the itemized deductions on a tax return.  Let’s start with state and local sales taxes.  We all know that as of today, at least, the itemizing taxpayer has the choice of taking a deduction for either the state income taxes paid or estimated sales taxes.  How many of you know that you can increase your client’s formula-calculated standard sales tax deduction by making use of certain items on the LES?

Look at bottom part of the LES on the line titled “YTD Entitle”, this is the total income of all kinds the taxpayer received from the military.  Now, look at box in the middle section of the LES titled “Wages YTD” which should match the W2 box 1.  Quite a difference, isn’t there?  The difference between these figures needs to be added to Read More

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