Did You Overlook Something on a Prior Tax Return?
Article Highlights: Repercussions of Incorrect Tax ReturnsFiling Amended ReturnsStatute of Limitations for RefundsPotential of Audit It is not uncommon to discover that an item of income was overlooked, a deduction was not claimed, or that an amended tax document was received after the tax return was already filed. Regardless of whether the oversight will result…
Here’s What Could Happen If You Try to Short-Change the IRS
Article Highlights: Self-employed taxpayers Underreported income Unscrupulous tax preparers Phony deductions or credits Inflating the Earned Income Tax Credit Taking fake education credits Petty cheating Some refer to it as “creative accounting” or just “a little fudging here and there,” but if your tax return is missing some income that should have been reported or…
The IRS Is Issuing Some Stimulus Payments by Debit Card; Some Are Being Mistaken as Junk Mail and Thrown Out
Article Highlights: Junk Mail Stimulus Payment Debit Card If you are like most Americans, you receive tons of junk mail, which you tend to discard without ever reading. Well, if you haven’t already received your stimulus payment from the feds, maybe you shouldn’t be so quick to throw away those envelopes from unknown senders, at…
Tax Issues That Arise When Converting a Home into a Rental
Article Highlights: Reason for Conversion Basis Depreciation Cash Flow versus Tax Profit or Loss Passive Losses Home Gain Exclusion There are many reasons to convert a home into a rental, such as to ensure that a prior home produces income and appreciation after the owner buys a new home; to maximize the tax benefits for…
Haven’t Filed Past Returns? IRS May File One for You and It Won’t Be Pretty
Article Highlights: Non-Filers IRS Information Reporting IRS Prepared Substitute Return Notice of Deficiency Tax Court Appeal Liens and Levies There are millions of individuals who do not file a tax return each year, many of them simply because their income is below the filing threshold levels for the year based upon their filing status. Still…
Health Savings Account (HSA)
Looking to shield some of your hard-earned money from income taxes? You should definitely consider funding a Health Savings Account (HSA). You deposit a portion of your wages into the HSA and get a tax write-off for the deposit. The money held in the HSA is typically invested in stocks, bonds and mutual funds. The…
Tax Effects of a Business Making a Charitable Contribution
Article Highlights: Charitable Contributions Business-Related Charitable Contributions Charitable Pass-Through Deductions 20% Business Pass-Through Deduction Charitable contributions are generally allowed as part of an individual’s itemized deductions on his or her income tax return, while a business expense deduction generally isn’t allowable for a contribution made to a charitable organization. However, the IRS recently issued…
Taxable Income versus Total Income versus Adjusted Gross Income (AGI)
Check out page 1 of your 2019 Form 1040 Individual income tax return and you will find the terms Taxable Income, Total Income and Adjusted Gross Income. This blog breaks down each one and shows how they are related to one another. What is Taxable Income? Taxable Income has two definitions in this blog. The…
Capital Gains Tax Rates
Taxpayers are subject to a wide variety of tax rates. Common examples include income, sales, property and capital gains. This blog focuses on capital gains tax rates. There are two different time frames involved with capital gains: short term and long term. Short term applies to assets held for one year or less. The rate…
Do I Have to File a Tax Return?
Do I Have to File a Tax Return? Article Highlights: When You Are Required to File Self-Employed Taxpayers Filing Thresholds Benefits of Filing Even When Not Required to File Refundable Tax Credits This is a question many taxpayers ask during this time of year, and the question is far more complicated than people believe. To…