I Just Married a Foreigner, How do I File

"Some U.S. citizens believe that if they marry a non-resident of the U.S. outside of the country that the marriage doesn’t count for tax purposes, and they can continue to file taxes as a single filer. This is not correct. Generally, married people must file either jointly or as married filing separately. Each has advantages and disadvantages.

Advantages and disadvantages of filing jointly

If your spouse has no income or very little income, the married filing jointly status can help lower your tax bill. However, it can often be a headache to use. Before you jointly file, your spouse must obtain an Individual Taxpayer Identification Number (ITIN). Getting the ITIN involves sending the IRS original or certified copies of foreign identification and citizenship, typically a passport. Getting these certified copies is easier said than done.

The IRS will tell you that the U.S. Embassy will certify the documents. Depending on the day you go and the representative you see, the embassy may tell you differently. You can have the documents certified by the issuing agency, but in Costa Rica that’s even more difficult. If you manage to get the certified copies or decide to send originals, you still may have to wait several months for an answer. If the IRS rejects the application for any reason, it cannot be amended or appealed. You have to start over from the beginning.

Advantages and disadvantages of filing separately

If you marry a Costa Rican or other foreign national and choose to file your taxes as a married couple filing jointly, you will subject the foreign spouse’s income to U.S. taxation as though he or she were a resident of the United States. This will include income from employment, pensions, rental, or any other source, no matter where he or she earns it. If you marry a Costa Rican with significant income, you may find the joint filing status disadvantageous from a U.S. tax perspective.

If your spouse has income and you do not want to pay tax to the United States on this income, you may want to use the married filing separately status. This will often allow you to avoid the headache of getting an ITIN for your spouse as well. However, it is likewise fraught with disadvantages. Using this status can be costly. Tax rates are higher for this status, especially at higher income levels. With the married couple filing separately status, you lose some tax benefits such as the earned income credit or education tax credits. Most importantly for many retirees, the formula for taxing Social Security benefits becomes much less generous under this status. A retiree filing separately from a spouse might have $2,000-3,000 or more in additional tax on their Social Security benefits over what a joint filer or single filer might have.

I wish the options for a U.S. citizen married to a non-resident alien were better. Perhaps when gift shopping this year, opt for chocolate over a ring.

"

SOURCE:

Ross Lustman

http://www.ticotimes.net/2014/02/14/ask-an-expat-what-are-the-u-s-tax-implications-of-marrying-a-foreigner

EIC and Unemployment

You cannot get EIC while on unemployment.

How To Request Tax Transcripts

If you find yourself behind in filing and can't find the proper documents, you can request your tax transcripts here:

http://www.irs.gov/Individuals/Get-Transcript

Per Diem Expenses

Here is the master website for per diem: http://www.gsa.gov

Meal Costs
"The standard meal allowance is the federal M&IE rate. For travel in 2013, the rate for most small
localities in the United States is $46 a day."

Functionally you can only take 50% of your meal costs:

((Daily Meal Cost $46) x days)/2

Generally $83 per a night for hotel.

SOURCE: http://www.irs.gov/pub/irs-pdf/p463.pdf

"The IRS has announced the special per diem rates for 2014-15 that taxpayers can use for substantiating the amount of ordinary and necessary business expenses incurred while traveling away from home. The new per diem rates will go into effect on Oct. 1.

IRS Notice 2014-57 includes special transportation industry meal and incidental expenses rates, the rate for incidental expenses-only deduction, and the rates and list of high-cost localities for purposes of the high-low substantiation method.

The special meals and incidental expenses rates for taxpayers in the transportation industry are $59 for any locality of travel in the continental United States and $65 for any locality of travel outside the continental United States.

The per diem rate for the incidental expenses-only deduction is $5 per day for any locality of travel inside or outside the continental United States.

For purposes of the high-low substantiation method, the per diem rates are $259 for travel to any high-cost locality, up from $251 last year, and $172 for travel to any other locality within the continental United States, which is a little higher than the $170 rate for 2013-14.

The amount of the $259 high rate and $172 low rate that is treated as paid for meals is $65 for travel to any high-cost locality and $52 for travel to any other locality within the continental United States.

Notice 2014-57 also lists the high-cost localities that have a federal per diem rate of $216 or more.

The rates are effective for per diem allowance for lodging, meal, and incidental expenses, or for meal and incidental expenses only, that are paid to any employee on or after Oct. 1, 2014, for travel away from home on or after that date.

In October 2011, the IRS provided the general rules for using a per diem rate (Rev. Proc. 2011-47) to substantiate the amount of ordinary and necessary business expenses for lodging, meals, and incidental costs paid or incurred while traveling away from home. Taxpayers using the rates and list of high-cost localities provided in Notice 2014-57 must comply with the rules in Rev. Proc. 2011-47.

A year later, the US General Services Administration published final regulations revising the definition of incidental expenses under the federal travel regulations to include only fees and tips given to porters, baggage carriers, hotel staff, and staff on ships.

“Transportation between places of lodging or business and places where meals are taken and the mailing cost of filing travel vouchers and paying employer-sponsored charge card billings are no longer included in incidental expenses,” the IRS wrote in Notice 2014-57. “Accordingly, taxpayers using per diem rates may separately deduct or be reimbursed for transportation and mailing expenses.”"

SOURCE: http://www.accountingweb.com/article/2014-15-diem-rates-travel-expenses-set-irs/223868

"2014-2015 Special Per Diem Rates

Notice 2014-57

SECTION 1. PURPOSE

This annual notice provides the 2014-2015 special per diem rates for taxpayers

to use in substantiating the amount of ordinary and necessary business expenses

incurred while traveling away from home, specifically (1) the special transportation

industry meal and incidental expenses (M&IE) rates, (2) the rate for the incidental

expenses only deduction, and (3) the rates and list of high-cost localities for purposes of

the high-low substantiation method.

SECTION 2. BACKGROUND

Rev. Proc. 2011-47, 2011-42 I.R.B. 520, provides rules for using a per diem rate

to substantiate, under § 274(d) of the Internal Revenue Code and § 1.274-5 of the

Income Tax Regulations, the amount of ordinary and necessary business expenses

paid or incurred while traveling away from home. Taxpayers using the rates and list of

high-cost localities provided in this notice must comply with Rev. Proc. 2011-47. Notice

2013-65, 2013-42 I.R.B. 440, provides the rates and list of high-cost localities for the

period October 1, 2013, to September 30, 2014.

Section 3.02(3) of Rev. Proc. 2011-47 provides that the term “incidental

expenses” has the same meaning as in the Federal Travel Regulations, 41 C.F.R. 300-

3.1, and that future changes to the definition of incidental expenses in the Federal

Travel Regulations would be announced in the annual per diem notice. Subsequent to 2

publication of Rev. Proc. 2011-47, the General Services Administration published final

regulations revising the definition of incidental expenses under the Federal Travel

Regulations to include only fees and tips given to porters, baggage carriers, hotel staff,

and staff on ships. Transportation between places of lodging or business and places

where meals are taken, and the mailing cost of filing travel vouchers and paying

employer-sponsored charge card billings, are no longer included in incidental expenses.

Accordingly, taxpayers using per diem rates may separately deduct or be reimbursed

for transportation and mailing expenses.

SECTION 3. SPECIAL M&IE RATES FOR TRANSPORTATION INDUSTRY

The special M&IE rates for taxpayers in the transportation industry are $59 for

any locality of travel in the continental United States (CONUS) and $65 for any locality

of travel outside the continental United States (OCONUS). See section 4.04 of Rev.

Proc. 2011-47.

SECTION 4. RATE FOR INCIDENTAL EXPENSES ONLY DEDUCTION

The rate for any CONUS or OCONUS locality of travel for the incidental

expenses only deduction is $5 per day. See section 4.05 of Rev. Proc. 2011-47.

SECTION 5. HIGH-LOW SUBSTANTIATION METHOD

 1. Annual high-low rates. For purposes of the high-low substantiation method, the

per diem rates in lieu of the rates described in Notice 2013-65 (the per diem

substantiation method) are $259 for travel to any high-cost locality and $172 for travel to

any other locality within CONUS. The amount of the $259 high rate and $172 low rate

that is treated as paid for meals for purposes of § 274(n) is $65 for travel to any highcost

locality and $52 for travel to any other locality within CONUS. See section 5.02 of 3

Rev. Proc. 2011-47. The per diem rates in lieu of the rates described in Notice 2013-65

(the meal and incidental expenses only substantiation method) are $65 for travel to any

high-cost locality and $52 for travel to any other locality within CONUS.

 2. High-cost localities. The following localities have a federal per diem rate of $216

or more, and are high-cost localities for all of the calendar year or the portion of the

calendar year specified in parentheses under the key city name.

Key city County or other defined location

Arizona

 Sedona City limits of Sedona

 (March 1-May 31)

California

 Monterey Monterey

 (July 1-August 31)

 Napa Napa

 (October 1-November 30 and February 1-September 30)

 San Francisco San Francisco

 San Mateo/Foster City/Belmont San Mateo

 Santa Barbara Santa Barbara

 Santa Cruz Santa Cruz

 (June 1-August 31)

 Santa Monica City limits of Santa Monica

 Sunnyvale/Palo Alto/San Jose Santa Clara

Colorado

 Aspen Pitkin

 (December 1-March 31 and June 1-August 31)

 Denver/Aurora Denver, Adams, Arapahoe, and

Jefferson

 Steamboat Springs Routt

 (December 1-March 31)

 Telluride San Miguel

 (December 1-March 31 and June 1-September 30)

 Vail Eagle

 (December 1-March 31 and July 1-August 31)

District of Columbia4

Washington D.C. (also the cities of Alexandria, Falls Church, and Fairfax, and the

counties of Arlington and Fairfax, in Virginia; and the counties of Montgomery and

Prince George's in Maryland) (See also Maryland and Virginia)

Florida

 Boca Raton/Delray Beach/Jupiter Palm Beach and Hendry

 (January 1-April 30)

 Fort Lauderdale Broward

 (January 1-March 31)

 Fort Walton Beach/De Funiak Springs Okaloosa and Walton

 (June 1-July 31)

 Key West Monroe

 Miami Miami-Dade

 (October 1-March 31)

 Naples Collier

 (January 1-April 30)

Illinois

 Chicago Cook and Lake

 (October 1-November 30 and March 1-September 30)

Louisiana

 New Orleans Orleans, St. Bernard, Jefferson

(October 1-June 30) and Plaquemine Parishes

Maine

 Bar Harbor Hancock

 (July 1-August 31)

Maryland

 Baltimore City Baltimore City

 (October 1-November 30 and March 1-September 30)

 Cambridge/St. Michaels Dorchester and Talbot

 (June 1-August 31)

 Ocean City Worcester

 (June 1-August 31)

 Washington, DC Metro Area Montgomery and Prince George’s

Massachusetts

 Boston/Cambridge Suffolk, City of Cambridge

 Falmouth City limits of Falmouth

 (July 1-August 31)

 Martha's Vineyard Dukes

 (July 1-August 31)

 Nantucket Nantucket

 (June 1-September 30)5

Montana

 Glendive/Sidney Dawson and Richland

New Hampshire

 Conway Carroll

 (July 1-August 31)

New York

 Glens Falls Warren

 (July 1-August 31)

 Lake Placid Essex

 (July 1-August 31)

 New York City Bronx, Kings, New York, Queens,

 and Richmond

 Saratoga Springs/Schenectady Saratoga and Schenectady

 (July 1-August 31)

 Tarrytown/White Plains/New Rochelle Westchester

North Carolina

 Kill Devil Dare

 (June 1-August 31)

North Dakota

 Williston Williams, Mountrail, and

McKenzie

Pennsylvania

 Philadelphia Philadelphia

(October 1-November 30 and March 1-June 30

and September 1-September 30)

Rhode Island

 Jamestown/Middletown/Newport Newport

 (October 1-October 31 and May 1-September 30)

South Carolina

 Charleston Charleston, Berkeley and

 (March 1-May 31) Dorchester

Texas

 Midland Midland

Utah

 Park City Summit

 (December 1-March 31)6

Virginia

 Washington, DC Metro Area Cities of Alexandria, Fairfax, and

Falls Church; counties of

Arlington and Fairfax

 Virginia Beach City of Virginia Beach

 (June 1-August 31)

Washington

 Seattle King

Wyoming

 Jackson/Pinedale Teton and Sublette

 (July 1-August 31)

 3. Changes in high-cost localities. The list of high-cost localities in this notice differs

from the list of high-cost localities in section 5 of Notice 2013-65.

a. The following localities have been added to the list of high-cost localities: San

Mateo/Foster City/Belmont, California; Sunnyvale/Palo Alto/San Jose, California;

Glendive/Sidney, Montana; Williston, North Dakota.

b. The following localities have changed the portion of the year in which they are

high-cost localities: Sedona, Arizona; Napa, California; Vail, Colorado; Fort

Lauderdale, Florida; Miami, Florida; Philadelphia, Pennsylvania.

c. The following localities have been removed from the list of high-cost localities:

Yosemite National Park, California; San Diego, California; Floral Park/Garden

City/Great Neck, New York.

SECTION 6. EFFECTIVE DATE

This notice is effective for per diem allowances for lodging, meal and incidental

expenses, or for meal and incidental expenses only, that are paid to any employee on

or after October 1, 2014, for travel away from home on or after October 1, 2014. For

purposes of computing the amount allowable as a deduction for travel away from home, 7

this notice is effective for meal and incidental expenses or for incidental expenses only

paid or incurred on or after October 1, 2014. See sections 4.06 and 5.04 of Rev. Proc.

2011-47 for transition rules for the last 3 months of calendar year 2014.

SECTION 7. EFFECT ON OTHER DOCUMENTS

Notice 2013-65 is superseded.

DRAFTING INFORMATION

The principal author of this notice is Neville R. Jiang of the Office of Associate

Chief Counsel (Income Tax & Accounting). For further information regarding this notice

contact Mr. Jiang at (202) 317-7007 (not a toll-free call)."
SOURCE: http://www.irs.gov/pub/irs-drop/n-14-57.pdf

Business Travel Expenses

I'm putting it here direct from the IRS.
"Topic 511 - Business Travel Expenses

Travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession or job. Generally, employees deduct these expenses by using Form 2106 (PDF), Employee Business Expenses, or Form 2106-EZ (PDF), Unreimbursed Employee Business Expenses, and Form 1040, Schedule A (PDF), Itemized Deductions. You cannot deduct expenses that are lavish or extravagant or that are for personal purposes.

You are traveling away from home if your duties require you to be away from the general area of your tax home for a period substantially longer than an ordinary day's work, and you need to get sleep or rest to meet the demands of your work while away.

Generally, your tax home is the entire city or general area where your main place of business or work is located, regardless of where you maintain your family home. For example, you live with your family in Chicago but work in Milwaukee where you stay in a hotel and eat in restaurants. You return to Chicago every weekend. You may not deduct any of your travel, meals or lodging in Milwaukee because that is your tax home. Your travel on weekends to your family home in Chicago is not for your work, so these expenses are also not deductible. If you regularly work in more than one place, your tax home is the general area where your main place of business or work is located.

In determining your main place of business, take into account the length of time you normally need to spend at each location for business purposes, the degree of business activity in each area, and the relative significance of the financial return from each area. However, the most important consideration is the length of time you spend at each location.

You can deduct travel expenses paid or incurred in connection with a temporary work assignment away from home. However, you cannot deduct travel expenses paid in connection with an indefinite work assignment. Any work assignment in excess of one year is considered indefinite. Also, you may not deduct travel expenses at a work location if you realistically expect that you will work there for more than one year, whether or not you actually work there that long. If you realistically expect to work at a temporary location for one year or less, and the expectation changes so that at some point you realistically expect to work there for more than one year, travel expenses become nondeductible when your expectation changes.

You may deduct travel expenses, including meals and lodging you incurred in looking for a new job in your present trade or business. You may not deduct these expenses if you had them while looking for work in a new trade or business or while looking for work for the first time. If you are unemployed and there is a substantial break between the time of your past work and your looking for new work, you may not deduct these expenses, even if the new work is in the same trade or business as your previous work. Refer to Publication 529,Miscellaneous Deductions.

Travel expenses for conventions are deductible if you can show that your attendance benefits your trade or business. Special rules apply to conventions held outside the North American area.

Deductible travel expenses while away from home include, but are not limited to the costs of:

1. Travel by airplane, train, bus or car between your home and your business destination. (If you are provided with a ticket or you are riding free as a result of a frequent traveler or similar program, your cost is zero.)
2. Using your car while at your business destination. You can deduct actual expenses or the standard mileage rate, as well as business-related tolls and parking fees. If you rent a car, you can deduct only the business-use portion for the expenses.
3. Fares for taxis or other types of transportation between the airport or train station and your hotel, the hotel and the work location, and from one customer to another, or from one place of business to another.
4. Meals and lodging.
5. Tips you pay for services related to any of these expenses.
6. Dry cleaning and laundry.
7. Business calls while on your business trip (This includes business communications by fax machine or other communication devices).
8. Other similar ordinary and necessary expenses related to your business travel (These expenses might include transportation to and from a business meal, public stenographer's fees, computer rental fees, and operating and maintaining a house trailer).
9. Shipping of baggage, and sample or display material between your regular and temporary work locations.

Instead of keeping records of your meal expenses and deducting the actual cost, you can generally use a standard meal allowance, which varies depending on where you travel. The deduction for business meals is generally limited to 50% of the unreimbursed cost.

If you are an employee, your allowable travel expenses are figured on Form 2106 or Form 2106-EZ. Your allowable unreimbursed expenses are carried from Form 2106 or Form 2106-EZ to Form 1040, Schedule A (PDF), and are subject to a limit based on 2% of adjusted gross income. Refer to Topic 508 for information on the 2% limit. If you do not itemize your deductions, you cannot deduct these expenses. If you are self-employed, you can deduct travel expenses on Form 1040, Schedule C (PDF), Profit or Loss From Business, orForm 1040, Schedule C-EZ (PDF), Net Profit From Business, or if you are a farmer, on Form 1040, Schedule F (PDF), Profit or Loss From Farming.

If you are a member of the National Guard or military reserve, you may be able to claim a deduction for unreimbursed travel expenses paid in connection with the performance of services as a reservist that reduces your adjusted gross income rather than an itemized deduction on Form 1040, Schedule A This travel must be overnight and more than 100 miles from your home. Expenses must be ordinary and necessary. This deduction is limited to the regular federal per diem rate (for lodging, meals and incidental expenses) and the standard mileage rate (for car expenses) plus any parking fees, ferry fees and tolls. Claim these expenses on Form 2106 or Form 2106-EZ and carry them to the appropriate line on Form 1040. Expenses in excess of the limit can be claimed only as an itemized deduction on Form 1040, Schedule A.

Good records are essential. Refer to Topic 305 for information on recordkeeping. For more information on these and other travel expenses, refer to Publication 463, Travel, Entertainment, Gift, and Car Expenses."

RESOURCE: http://www.irs.gov/taxtopics/tc511.html

For Divorced Parents Who Alternate Claiming the Kids

Remember to change your filing status and to make sure your are getting your child tax credit if qualified.

IRS Interest Paid

Usually received as a letter from the IRS is taxable and appears under OTHER INCOME as IRS INTEREST.