Tax News

Unless a taxpayer can demonstrate a profit motive, an activity is treated as a hobby. This means all income must be reported, but for 2018 through 2025, no deductions can be taken. The bar to deductio...

Life’s ups and downs can disrupt things for taxpayers, but the Tax Court has made it clear that it’s no excuse for not filing tax returns. Take the following case where a taxpayer who worked in th...

The interest rates on overpayments and underpayments are increased slightly for the first quarter of 2019, as compared with the rates for the prior quarter (Rev Rul. 2018-32). The rates are: Nonco...

Following the widespread losses of investments with Bernard Madoff, the IRS issued a safe harbor (Rev. Proc. 2009-20) to enable investors to take losses even though some recovery was possible. One cou...

If you use your vehicle for business driving, you have a choice in how to handle your expenses. You can deduct your actual costs, including an allowance for depreciation (up to certain dollar limits) ...

If you conduct an activity without a profit motive you can prove, then the hobby loss rule applies. Under the Tax Cuts and Jobs Act, you have to report all of your income (nothing has been changed her...

More than 62 million Social Security beneficiaries will receive a cost-of-living adjustment (COLA) of 2.8% starting with the December 2018 benefits, which are payable in January 2019. This COLA adjust...

A couple got divorced in Nevada in 2011. Their agreement provided for tax-free transfers of property as well as spousal support. One spouse made payments on the other’s Sallie Mae student loans and ...

The IRS may adjust interest rates for various purposes at various times. For example, the rates for overpayments and underpayments of income tax are adjusted quarterly. Interest rates for Q4 in 201...

Anyone who’s dealt with the IRS knows it can be a hassle. For some, however, it can be downright problematic. One couple claimed that the IRS’s continued collection activities following their fili...

After the Tax Cuts and Jobs Act of 2017 put a $10,000 cap on the itemized deduction (starting in 2018) for state and local taxes ($5,000 for married persons filing separately), some states created or ...

The IRS announced that it was using a new format for tax return transcripts to better protect taxpayer’s personal information (IR-2018-171, 8/22/18). Starting September 23, 2018, Get Transcript Onli...

In 2014, the IRS created the Annual Filing Season Program for voluntary education and testing of unenrolled tax return preparers (Rev. Proc. 2014-42). Those completing the program gain a limited right...

A taxpayer can claim the premium tax credit for assistance in paying for health coverage purchased through a government Marketplace. To be eligible, household income must be no more than 400% of the f...

Ordinarily, yearly contributions to ABLE accounts are capped at the annual gift tax exclusion ($15,000 in 2018). The Tax Cuts and Jobs Act temporarily increased the contribution limit. For 2018 throug...

In 2016, the U.S. Treasury created the Hardest Hit Fund (HHF) program to provide certain homeowners with assistance designed to help them keep their homes. States set up and administer the program, wh...

If you buy an electric drive car, you may qualify for a tax credit of up to $7,500. However, the credit is reduced once the manufacturer has sold more than 200,000 cars in the U.S. Tesla reported that...

To claim a home office deduction, space must be used regularly and exclusively for business. There are two exceptions to exclusive use: day care businesses and storage of inventory or product samples ...

If a taxpayer files a fraudulent tax return, both civil and criminal penalties can result. The civil penalty is 75% of the underpayment attributable to the fraud (Code Sec. 6663). But if a fraud resul...

If you have a plan loan outstanding and take a distribution that’s partially used to pay off the loan, are you taxed on the gross amount or the net amount (gross amount minus loan repayment)? That w...