Taxable or Non-Taxable Income?

Generally, most income you receive is considered taxable but there are situations when certain types of income are partially taxed or not taxed at all.

To help taxpayers understand the differences between taxable and non-taxable income, the Internal Revenue Service offers these common examples of items not included as taxable income:

• Adoption Expense Reimbursements for qualifying expenses
• Child support payments
• Gifts, bequests and inheritances
• Workers' compensation benefits

What filing status should I use?

Your federal tax filing status is based on your marital and family situation. It is an important factor in determining your standard deduction, your tax liability, eligibility for deductions and credits and whether you must file a return.

Your marital status on the last day of the year determines your status for the entire year. State law determines if a taxpayer is married or legally separated under a divorce.

If more than one filing status applies to you, you may choose the one that gives you the lowest tax obligation.

There are five filing status options:

• Single. Generally, if you are unmarried, divorced, or legally separated according to your state law as of December 31 and you do not qualify for another filing status, your filing status is Single.

Columbus TV anchor needs a new tax preparer

Just days after I published a blog post about Deducting the cost of Work Clothes and Uniforms, the Columbus Dispatch ran a story over the weekend about local TV anchor Anietra Hamper's issues with the IRS. To me this is a case of bad advice from a tax preparer.

IRS Publication 529 is clear when it comes to clothing costs. "It is not enough that you wear distinctive clothing. The clothing must be specifically required by your employer. Nor is it enough that you do not, in fact, wear your work clothes away from work. The clothing must before not be suitable for taking the place of your regular clothing."

The Clock is Ticking

If you haven't filed a prior year tax return, it's not too late. Generally, a refund can be claimed by filing the tax return within three years from the due date.

That means if you haven't filed your 2007 return, the deadline is April 18, 2011 to claim your refund. If you extended that return, the due date is October 17, 2011.

The Internal Revenue Service (IRS) announced that it has $1.1 Billion for People who have not filed a 2007 tax return.

Don't wait any longer, file your return.

Deducting the cost of Work Clothes and Uniforms

Qualified uniform expenses are the cost and upkeep of uniforms and certain articles that are:

• Specifically required as a condition of employment, and
• Not adaptable to general use as regular clothing

The deduction is also allowed for "Uniforms required by your employer that are not suitable for ordinary wear" as well as "protective clothing required in your work."

This includes protective clothing such as safety shoes, boots, safety glasses, hard hats, and work gloves. Taxpayers should look into this deduction if their occupation is a carpenter, cement worker, chemical worker, electrician, fishing boat crew member, machinist, oil field worker, pipe fitter, steamfitter, or truck driver.