It's tax time

We received the latest batch of forwarded mail from our neighbors a few days ago. With the myriad of tax forms in the batch, we can tell it is tax time. For the last little while, I have been reading up on the US taxation rules. The US Internal Revenue Service's publications are horribly complicated, but I found this very useful article that focuses on taxation for people on sabbatical leaves.

We got Intuits' tax software TurboTax via internet download. A handsome discount was offered when we connected to the Intuit's website through Fidelity, which holds my (and most University of California employees') retirement portfolio. I suppose the discount was the consolation for checking my plummeting retirement portfolio balance.

There are several tax advantages for going on sabbatical for less than a year. First, I (as an exchange academic) don't have to pay any tax in Germany due to the US-German tax treaty. One can also deduct certain un-reimbursed expenses incurred during the sabbatical as job-related travel expenses:

• Lodging: my portion of the rent in Germany is deductible
  
• Meals: 50% of the federal meals and incidental expenses (M&IE) per diem rate
  
• Transportation: my cost to travel to and from Germany, and my commuting cost (i.e. my monthly tram pass) are deductible

Needless to say, these deductions lower our taxes – a welcoming relief during this economic climate.