TAXPAYER PENALIZED FOR WASTING COURT’S TIME A self-employed hearing aid specialist (“petitioner”) claimed he had no taxable income and made no estimated tax payments on his 2006 and 2007 tax returns. Through third-party information returns and a bank account analysis, the IRS determined he had unreported business receipts of $209,331 for 2006 and $279,600 for [...]
MAKING YOUR HOBBY A BUSINESS Taxpayers often enjoy their hobby activity more than they do their job. In many cases, they invest a great deal of time and money, and some eventually make their hobby a full or part-time business activity. Unfortunately, the IRS has a lot to say when it comes to the business [...]
Before this year, you could claim itemized deductions for medical expenses paid for you, your spouse and your dependents to the extent those expenses exceed 7.5% of your adjusted gross income (AGI). But the rules have changed for the worse in 2013 and beyond. Due to the 2010 Affordable Care Act, the old 7.5%-of-AGI [...]
Many taxpayers make adjustments to their investment portfolio near year-end to take profits, to recognize tax losses to reallocate their assets, and for various other reasons. When making purchases of mutual funds near year-end, however, you should be wary of actually purchasing a tax liability. This is a danger: mutual funds must pay out their [...]
The IRS has a new website that provides information on the Affordable Care Act (www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions). The site explains tax benefits and responsibilities for individuals, employers, and other organizations. In addition, it provides information about tax provisions that are in effect now and those that will go into effect in 2014 and beyond. Topics include premium [...]
Taxpayers are often confused about when a gift is taxable or nontaxable. We thought it would be a good time to review some basic information on the annual gift tax exclusion. Most gifts are not subject to the gift tax. For example, there is usually no tax when you make a gift to your spouse [...]