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| Your Questions Answered. What Do You Think? |
1-On the job injury and Social Security Worker’s Compensation
2-Work Clothing: Uniform or Street Wear?
3-Classroom Expenses
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On the job injury and Social Security Worker’s Compensation
The Question: I am receiving worker’s compensation benefits and social security. The year end form I received from Social Security (form SSA-1099), reported a total, which was the combined worker’s compensation and Social Security. It also showed that my worker’s compensation reduced my social security benefits. Do I have to report the worker’s compensation portion (offset) on my tax return?
The Answer: Yes, the worker’s compensation offset amount is treated as a social security benefit received.
The Reason: The amount of worker’s compensation now being paid in conjunction with Social Security is no longer considered worker’s compensation. It is now considered to be Social Security. Therefore, if you were receiving worker’s compensation due to a job-related injury, and then apply for and collect social security benefits, the SSA-1099 shows a worker’s compensation and social security amount. Now, up to 85 percent of your benefit may be taxable.
Tax Hint: If you receive several years of social security as a lump sum in the current year, you may be able to save some tax dollars by allocating your benefit between the current and prior year. IRS Publication 915 has the instructions and worksheets.
Work Clothing: Uniform or Street Wear?
The Question: If I am required to wear special clothes for my job, like a suit, or a black or white dress, can I deduct these clothes as a business expense on my tax return?
The Answer: No.
The Reason:Work clothing must meet two requirements to be deductible as a business expense. (1) The specialized clothing must be required for the employment; and (2) the clothing must not be suitable for general or personal wear. Allowable clothing might be for delivery workers, letter carriers, health care, police, professional athletes, bus drivers, musicians, and entertainers. Protective clothing, such as safety shoes, safety glasses, or work gloves is allowable. Not allowed work clothing (which could be used outside your work) might be a business suit, bib overalls, standard shoes, blue work clothes, a white cap, shirt, jacket, colored clothing.
Classroom Expenses
The Question: Can an English teacher claim the following expenses: Admission to movies, theater tickets (to see Camelot), video rentals for home, subscription to daily newspaper, subscription to magazines for the classroom, reading glasses, camera batteries, dry cleaning for work clothes, birthday cards and gifts for students and co-workers?
The Answer: Maybe.
The Reason: Although some of the expenses are certainly relevant for an English teacher, they must be ordinary and necessary business expenses, and not personal, living, or family expenses. So buying a videotaped production of "Death of a Salesman" to help drive home Arthur Miller's points to your students would likely meet tax muster. But purchasing a new television upon which to watch it instead of using your school's working-but-old Zenith may raise some IRS eyebrows.
It is up to the taxpayer to keep very accurate records to establish the business purpose.
Ponder: Should a high school head golf coach be able to deduct his golf club membership fee which then allows him and his students to use the course if the school does not provide a facility? What about a tennis coach?
Questions? Contact Joseph Reisman at 2751 Coney Island Avenue, Brooklyn, NY 11235-5004
Tel: 718-332-1040; Fax: 718-743-2721; E-mail: JSReisman@TaxHelp1040.com.
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Posted on Aug 07, 2006 20:19pm by JSREISMAN
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