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Long-term disability income that you receive prior to the minimum retirement age under your employer’s plan and that is shown as taxable compensation in box 1 of Form W-2 is treated as earned income...

Teachers can include COVID-19-related expenses in claiming their “above-the-line” deduction of up to $250. Such expenses include face masks; disinfectant; hand soap; hand sanitizers; disposable gl...

An amended return to claim a refund generally can be filed up to three years from the due date of that return (or the actual filing date if after the due date)....

Refunds of federal income taxes are never taxable because the taxes were not deductible. Refunds of state income taxes may or may not be deductible. It depends on whether the taxpayer itemized deducti...

Seniors generally are subject to the same tax rules as other individuals when it comes to reporting income and claiming deductions and credits. However, those age 65 and older can claim an additional ...

Yes. The Consolidated Appropriations Act, 2021, created a one-year opportunity. Use the prior year’s income if it results in a larger earned income tax credit. But don’t if it results in reducing ...

Taxation of the payment depends on various factors. If, for example, the settlement was the result of accounting errors erroneously inflating the price of the stock, then the payment is a refund of yo...

The Consolidated Appropriations Act, 2021, specifically allows businesses to deduct all of their expenses to the extent otherwise allowed under tax law. This includes expenses covered by PPP loans tha...

Distribution of the second round of stimulus payments to individuals began early in 2021. The payment amounts were based on 2019 AGI (obviously the IRS does not yet know 2020 AGI because 2020 returns ...

The additional standard deduction amount for blindness applies per person. If one spouse is blind, the couple’s standard deduction is increased by one additional amount for a married person ($1,300 ...

You can treat the distribution from the IRA as exempt from the penalty if you are disabled. Just be sure that you meet the strict definition of disability that applies in this case. To be disabled in ...

You can take distributions from your IRA to satisfy required minimum distributions (RMDs) in cash or in kind, meaning in stock. The option you use depends on what’s in your account and what you want...

While interest on municipal bonds is tax free for federal income tax purposes, gain or loss on the sale of the bonds must be reported. The loss is treated as a capital loss, which is deductible within...

It depends. If you qualify for the home sale exclusion, then gain up to $250,000 ($500,000 on a joint return) is tax free; there is no capital gain. If your gain excludes your applicable exclusion amo...

Roth IRAs are designed for retirement savings. While contributions are not tax deductible, withdrawals of earnings after age 591/2 are tax free as long as the account has been open for at least 5 year...

No. The deadline for 2012 contributions was April 15, 2013, regardless of filing extensions. However, you can make a 2013 contribution now; you don’t have to wait until the end of the year or even u...

Not really. Most of the taxes you refer to (as well as taxes on airline tickets, gasoline at the pump, and cable and Internet access) are excise taxes, which are not deductible as itemized deductions ...

The law doesn’t put a cap on generosity. However, when gifts to an individual exceed a certain amount, you’ll have to deal with federal gift taxes. In 2014, you can give up to $14,000 per individu...

While the interest on municipal bonds is tax free, this doesn’t mean gain or loss on the sale of bonds is excludable from gross income. Gain or loss on the sale of municipal bonds is figured in the ...

A child who is unrelated to the person who provides support may be able to claim a dependency exemption if the child is a qualifying relative. Even though there are no blood ties, a qualifying relativ...

The starting point is determining whether you have a gain or loss. If you have a gain, your other buying or selling activities have no impact on reporting the gain. If you have a loss and buy substant...

It depends. HH bonds were issued in exchange for E and certain other bonds to enable bondholders to continue deferring the tax on the interest that accrued. The Treasury stopped issuing HH bonds in 20...

It depends on whether you’re viewed under the tax law as a developer. If you hold the lot as investment property, any gain you reap is taxed as capital gain. You may also owe an additional 3.8% tax ...

Sorry about your personal loss. The inheritance isn’t taxable, but receiving funds from the annuity is because your cousin never paid tax on this income. Sounds confusing, but it’s the same thing ...

Yes. While there are certain ordering rules for applying capital losses against capital gains, ultimately, long-term capital losses can offset any short-term gains....

No. It was your property that was donated, so the donation belongs to you. You could have given the items to your brother as a gift and let him make the donations....

First, you must determine whether this was a business or nonbusiness bad debt. A business bad debt is fully deductible as an ordinary loss; a nonbusiness bad debt is treated as a short-term capital lo...

If you have a C corporation that files Form 1120, you only report compensation (including wages, bonuses, and taxable fringe benefits), dividends, and other taxable distributions received. The corpora...

It depends. Whether you owe income taxes depends not only on your wages, but on all of your income. If your gross income is below the filing threshold for your filing status, you’ll obtain a full re...

You’re not asking the right question. You should be asking whether your spouse is your employee. Under the circumstances described, where your spouse is working solely for you and you have control o...

No. The requirement to issue a Form 1099 for the payment of services of $600 or more to an independent contractor applies only to businesses. It does not apply to services for individuals....

Medical expenses can be deducted as itemized medical expenses only in the year in which they are paid. If you can’t use them in the year of payment because you don’t itemize or total medical costs...

No. An individual’s charitable contributions can be deducted only as an itemized deduction. Even if the rental property is a trade or business, with income and expenses reported on Schedule C rather...

Yes. Even though there is an age limit for making deductible IRA contributions, there is no age limit for making a conversion from a traditional IRA to a Roth IRA. There is no need to have earned inco...

High-income taxpayers pay an additional charge for Medicare Parts B and D. The Part B surcharges for 2014 are unchanged from 2013; those for Part D are only slightly higher for 2014 than in 2013.  �...

Gifts up to $14,000 in 2013 are not taxable for gift tax purposes (they are never taxable for income tax purposes, regardless of amount). The additional $1,000 per child could be taxable, although you...