News

If you are suffering or about to suffer an IRS audit, you should know how your tax positions stack up against the IRS examiners’ positions.  In most cases, you are discussing the facts, not the law, and you prove your facts with receipts, canceled checks, and logbooks.  Once you...

If you made an error on your tax return, don’t worry—there are two easy ways to fix it:  A superseding return A qualified amended return A superseding return is an amended or corrected return filed on or before the original or extended due date. The IRS considers the changes...

Do you claim a tax deduction for a home office? Should you include or exclude your garage space in your calculations of business-use percentage? Ronald Culp earned an office deduction for 78 percent of his home. That’s a nice percentage, but what’s really interesting is how the court looked...

Did you take a coronavirus distribution (CVD) of up to a combined limit of $100,000 from one or more of your traditional IRAs in 2020?  You can recontribute the CVD amount(s) back into one or more traditional IRAs within three years of the withdrawal date(s). You treat each withdrawal...

The tax law can jump up and bite you in unexpected places. One example of that is the nanny tax.  Do you have a household employee such as a nanny, a caregiver for an elderly relative who moved in with you during the pandemic, or a live-in housekeeper?  You...

The Work Opportunity Tax Credit rewards your good deeds.  And now, because of new legislation, the rules are in place for longer than usual.  If you need to hire workers in your business, this dollar-for-dollar reducer of your taxes is one to know about. Suppose your business hires a...

The PayPal loophole is going away in a little over six months from now. You may remember the strategy where you can avoid giving 1099s to contractors and vendors when you use PayPal or a similar service as your payment platform. With this strategy, you push the reporting requirements...

When you buy business or investment real property, such as an apartment building, you usually pay one lump sum for land, buildings, and other improvements. There’s no cost breakdown. You can’t depreciate land because it doesn’t wear out. So, as far as depreciation goes, land is useless.  What you...

Here’s a vehicle story that you will find of interest. Taxpayer DJ is in an IRS audit of his 2018 tax return. It is now at the IRS appeals level. The vehicle in question is an SUV with a curb weight of 5,700 pounds and a gross vehicle weight...

Cryptocurrencies have gone mainstream.  For example, you can use bitcoin to buy far more than you would think. To see, try googling “What can I buy with bitcoin?” You will get more than 350,000 hits. But using cryptocurrencies has federal income tax implications that may surprise you.  With the...

What happens when lawmakers enact a new tax? It starts small. It looks easy. In 1935, the self-employment tax topped out at $60. Those 1935 lawmakers must be twirling in their graves with the new rules for 2021, which levy the following taxes: A self-employment tax of up to...

Disasters such as storms, fires, floods, freezes, and hurricanes can damage or destroy vital business records. You need accounting and tax records not only to file your taxes (including claims for casualty losses), but to file insurance claims, bill clients, pay bills, obtain loans, deal with federal and state...