Do I still need to bring my expenses to my tax appointment?

We have been getting this question a bit this year already and we would love to help clarify – at least in part. If I can separate ‘expenses’ into three main categories I can address each of them in a simpler manner.

Personal Expenses

Personal expenses – which are things like mortgage interest for your home, donations to charity, or perhaps some additional sales tax (like a new vehicle purchase). Personal expenses are still a deduction on your tax return. The thing is, we add up all the personal expenses and say, ‘we can reduce your income by THIS much’ for the calculation of taxable income -OR- use the free, no questions asked, ‘standard deduction’. The change for 2018 is that the standard deduction is so much higher than it was in 2017. It is entirely possible that your personal expenses are less than the standard deduction this year. That is not entirely a bad thing. Using a deduction that is greater than your personal expenses is essentially reducing your income by MORE than you actually paid – which is great!

Employee Expenses

Employee expenses which are expenses you incur while receiving a regular paycheck (that takes out taxes). Expenses could be miles to visit clients or other work sites, safety clothing and equipment, a portion of cell phone use, etc. Employee expenses are the expenses that were sadly removed from the tax code. They were previously calculated as part of the itemized (personal) deductions. The increased standard deduction may still be higher than if you could use your employee expenses – meaning you still didn’t really ‘lose’ them. However, that is the confirmed change for all employees – whether it’s your main job or side job, work from home, or heavy travel jobs, no expenses as an employee are included for 2018 tax purposes.

Business expenses

Business expenses which are very similar to employee expenses, but instead involves expenses incurred while self-employed, working contract, or owning a business, sometimes referred to as “1099 jobs”. Business expenses are 100% still a deduction for 2018. It is still incredibly vital to your tax return and your overall financial health to use all your expenses for this type of income.

Charles Steinmetz
Senior Tax Professional

The Molen & Associates Difference

Mike Forsyth

“Super helpful and timely. This is our first year with them and we look forward to trusting them with our taxes and business books for years to come.”

Caitlin Daulong

“Molen & Associates is amazing! They run an incredibly streamlined process, which makes filing taxes a breeze. So impressed with their attention to detail, organization, and swift execution every year. Cannot recommend them enough!”

Sy Sahrai

“I’ve been with Mr. Molen’s company for few years and I felt treated like family respect and dignity. They are caring, professional and honest, which hard to find these days. Love working with them.”

Change Independent Contractors into Employees Trouble-Free

Independent contractors are a vital part of the American workforce. They work for themselves, usually providing services to other businesses. While this setup offers many advantages to both the contractor and the hiring business, it can also create tax problems.   You...

Is retirement the same thing it used to be?

The modern concept of retirement has only been around for about 100 years. Though relatively new, what retirement looks like and how people are planning for retirement has changed significantly in the last few decades. With roughly 9000 Americans reaching the average...

Cash in: Beat The Taxman With 11 Tax-free Income Breaks

No one likes paying taxes, but what if there were a way to reduce the taxes you owe each year? Luckily, several tax-free income breaks can help lower your tax bill. Here are 11 of the best ways to beat the taxman. Break 1: accumulation and withdrawals of tax-free...

I owe to the IRS, what do I do now?

We know owing taxes can be a headache, especially if you don’t have a CPA or tax advisor to walk you through the process. If you fail to pay your taxes, in most cases you will only face interest or penalties, rather than going to prison for tax evasion. Even if you do...

Credit, Debt and Personal Finances 101

In an era of credit cards, services that allow you to “buy now, pay later”, and access to loans at your fingertips, it is easy to indulge in lifestyle you can’t necessarily afford on your budget. Before your fall too deep down the rabbit hole – or if you may already...

Buying an Electric Vehicle? Know These Tax Law Changes

 Are you thinking of buying an electric vehicle or a plug-in hybrid and taking advantage of the Electric Vehicle Tax Law Changes? If so, you have much to consider—thanks to the newlyenacted Inflation Reduction Act and Electric Vehicle Tax Law Changes. Let’s get...

Dealing With The New 62.5 Cents Mileage Rate

Due to rising gas prices, the Internal Revenue Service (IRS) announced an increase in the standard mileage rate for business travel. As a result, small businesses that make use of the standard mile rates can deduct 62.5 cents per mile for business mileage.  This is...

FAQ on Student Loan Cancellation

What is the Student Loan Cancellation? Last month, President Biden laid out a plan to cancel up to $20,000 in federal student loan debt per borrower. Beneath this seemingly simple plan comes quite a few questions about how, exactly, it will work. Naturally, borrowers...

Need to Change from 1099 to W2? Read More About This Safe Harbor Relief

IRS declared independent contractors as employees: Can Section 530 help?  Are you going through an IRS audit? Though we know that is bad but what happens if the IRS declares that many of your 1099 independent contractors are W-2 employees, now what?    Safe-harbor...

The IRS is Watching Cryptocurrency Closely

The IRS wants to know of any bitcoins or other cryptocurrencies you have. It will appear at the top of the first page of your Form 1040, below your address and name. The IRS wants to monitor crypto purchases and sales starting this year.   Anyone filing a tax return...

Request an Appointment Today

14 + 12 =

Call us at

Pin It on Pinterest

Share This