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Employee Tool and Equipment Plans

Business Entity Selection and the Tax Consequences of Converting

Tool and Equipment Plans generally require employees to provide their own tools. Some plans purport to receive tax-favored treatment as “accountable plans” under the definition of adjusted gross income in Internal Revenue Code § 62(c). If you are expected to use

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Posted in Accountable Expense Plan, Business Expense, Deductible Expense, Disallowed Expenses, Employee Business Expense, Employment Tax, IRS Enforcement, IRS Examination, Tax Abuse, Tax Deductible Expenses, Tax Guidance & Preparation, Trust Fund Recovery Penalty

Reconstruction of Tax Records

Treasury Regulation 1.274-5 allows for a deduction without complete documentation if you can show that you have 'substantially complied' with adequate adequate record keeping requirements. This statute is code for ... be nice to your examiner. Basically the practice of disallowing

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Posted in IRS Appeal, IRS Audit, IRS Enforcement, IRS Examination, IRS Mediation, IRS Penalties, Tax Abuse, Tax Credit, Tax Deductible Expenses, Tax Fraud, Tax Guidance & Preparation, Tax Problems & Requests, United States Treasury

Surviving Spouse Estate & Gift Tax Exclusion

IRS Notice 2011-82 makes available the ability for taxpayers to pass along their unused estate & gift tax exclusion amounts to their surviving spouse if an estate tax return is filed. This new portability election allows estates of married taxpayers to

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Posted in Estate Tax, Gift Tax, Tax Deductible Expenses, Tax Filing Status, Tax Guidance & Preparation, Tax Problems & Requests, Trusts

Adoption Tax Credit

The Affordable Care Act increased the amount of the Adoption Tax Credit and made it fully refundable, which means it can increase the amount of your refund or decrease the amount of your tax liability in the immediate tax year. Additionally:

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Posted in Adoption, Tax Credit, Tax Deductible Expenses, Tax Guidance & Preparation

Tax Deductible Job Search Expenses

If you invest money seeking employment in your current vocation by taking such action as updating your resume and/or attending career fairs you may be able to deduct some of the expenses as miscellaneous deductions on the Schedule A of

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Posted in Tax Deductible Expenses, Tax Guidance & Preparation, Tax Relief

Medical Expense Deductions

Many medical costs are deductible including the cost of treatment to alleviate conditions or diseases and the cost of prescriptions and certain diagnostic services. Additional deductible medical expenses include: Capital expenses for special equipment installed in, or improvements made to, a

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Posted in Medical Expenses, Self Employ, Small Business, Sole Proprietor, Tax Deductible Expenses, Tax Guidance & Preparation

Millennium Multiple Employer Welfare Benefit Plan Settles with IRS

The Internal Revenue Service announced that it reached an agreement with the Millennium Multiple Employer Welfare Benefit Plan (Millennium Plan) which is presently the subject of a bankruptcy proceeding filed on June 9, 2010, in the U.S. Bankruptcy Court for the

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Posted in Disallowed Expenses, Tax Abuse, Tax Court, Tax Deductible Expenses, Tax Fraud, Tax Guidance & Preparation

Do You Have A Business? Or Is It A Hobby?

The IRS has developed a rule of thumb for analyzing business losses called the Hobby Loss Rule of Thumb that basically says if a business reports a net profit in 3 out of the last 5 years it is presumed to

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Posted in Appeals & Audit Resolution, Audit Reconsideration, Business Expense, Correspondence Audit, Deductible Expense, Disallowed Expenses, Entity Classification, IRS Audit, IRS Examination, Tax Deductible Expenses

Amortization of Intangible Costs

Also commonly referred to as 197 Intangibles, the following costs must be amortized (deducted as an expense) over 15 years (180 months) starting with the later of (a) the month the intangibles were acquired or (b) the month the trade

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Posted in Capital Gain, Capital Loss, Cost Basis, Deductible Expense, Organizational Costs, Passive Activity, Start up costs, Tax Deductible Expenses, Tax Guidance & Preparation

Small Business Health Insurance Credits-Patient Protection-Affordable Care Act 2010

The Tax Credit for Employee Health Insurance Expenses of Small Employers is part of the Patient Protection and Affordable Care Act which was signed into law in March of 2010.  The Act makes a credit available to small employers who

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Posted in Business Expense, Disallowed Expenses, Health Care Tax Credit, Health Insurance, Self Employ, Small Business, Sub-chapter S, Tax Credit, Tax Deductible Expenses, Tax Relief
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