Scholarships received by a student toward a degreed education is tax free for qualified expenses such as tuition, fees, books, supplies and equipment. The room and board and travelling expenses are taxable and should be included in the 1040 tax return. The scholarships received for a non-degreed education is all taxable. For more information please refer to IRS publication 970.
Tag: Self-employed
Are you reaching the age of retirement?
Workers born in 1943 to 1954 can retire with full benefits at the age of 66 years. Workers born in 1960 and after have to wait until they are 67 years old. You may request to receive your benefits at age 62. However, your benefit will be reduced by almost 20%.
If you retire at your normal retirement age, i.e. 66 and start getting your full benefits and then go back work, you will not be subject to the social security test for working seniors between the age of 65 and 69. This test was eliminated in January 1, 2000.
However, you are subject to withholding for social security and medicare taxes on your wages. Social security benefits may become taxable if the retiree has other income besides his social security benefit. Please go to mztaxservice.com and click on Tax Info page to go to the IRS site for more information or contact us for any questions you may have.
Meals and Entertainment Receipts for IRS
What type of receipts you need to keep for IRS for your Meals and Entertainment?
Make sure that you keep the detailed and itemized receipt of the restaurants instead of your credit card receipts.
Also keep the itemized receipt of your hotel bill while travelling for your business instead of just your credit card receipts.
Six most common Tax documents
Six most common documents needed for preparing your Tax Return
1. W-2 form from your current employer and W-2 forms from all the other employers that you might have had in 2017.
2. 1099-Misc forms issued to you as an independent contractor.
3. 1099 Interest and 1099- Div from any bank or broker for accounts such as Saving accounts or Investments.
4. 1099-R form for any distribution you might have had from your retirement accounts such as IRA or 401K.
5. 1098 form for the interest you paid for your mortgage if you owned a house.
6. 1098-T from your school for any tuition paid or grants received if you are a student.