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Financial Questions and Answers

Q: I plan to give my three employees cell phones. Can I deduct the expense?

A: Tax law allows employers to provide cell phones to their employees income tax free as long as the arrangement is for “substantial” non-compensatory business reasons. Some examples: The employer must be able to contact the worker at all times for work-related emergencies or the employee has to call clients while away from the office. The tax law does not require employees to keep records of all their cell phone use in order for the employer to meet this business purpose test.

Q: My father recently passed away. Can my mother continue to use the “married filing jointly” tax status when filing her tax return?

A: Generally, your mother can file a joint return for the year her husband died and file in cooperation with the executor or administrator of her husband’s estate. If your mother provides qualifying support for a dependent child for whom she can claim a tax exemption and has not remarried, she may generally file as a qualifying widow in each of the two years following the death of her husband. As a qualifying widow, your mother can use the married filing jointly tax rates. If your mother is ineligible to file jointly or as a qualifying widow, she may be able to file as head of household. To qualify, she must provide support for a relative and meet other conditions.

October 2017 Newsletter Previous Article