Employee Tool and Equipment Plans

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 your own tools and equipment on the job and get reimbursed be very careful in…

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Calculating Adjusted Basis in an S-Corporation

It seems to me that a relatively significant problem for most Sub chapter S Corporations is accounting for the capital accounts of each and every single shareholder. The company must maintain reasonably detailed records of each shareholder’s equity investments of cash and property, loans that each shareholder advances to the company as well as distributions…

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Medical and Dental Expenses – IRS Publications 502 + 969

This post is a quick overview of IRS Publication 502, Medical and Dental Expenses and IRS Publication 969 Health Savings Accounts and Other Tax-Favored Health Plans. You can deduct expenses primarily paid for the diagnosis, cure, mitigation, treatment or prevention of disease, or treatment affecting any structure or function of the body. For drugs, you can only deduct…

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IRS Rules for Providing K-1’s Electronically: Rev. Proc. 2012-17

Certain entities, such as partnerships, are required annually to file K-1s with the IRS and provide a copy to their partners. The IRS estimates that partnerships filed almost 26 million K-1s during 2011. Revenue Procedure 2012-17 provides new rules describing when partnerships may provide K-1s electronically to partners. These new rules make it easier for partnerships to provide…

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Understanding IRS Notices and Letters

Look on the IRS notice or letter you received in the upper right hand corner for an alpha numeric sequence.  The corresponding IRS explanations below to their Notices and letters are sub categorized as follows: 1. Redesigned Notices 2. Other Notices 3. Individual Filer 4. Business Filer Redesigned Notices Notice Number Description Topic CP01H You…

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Unemployment Benefits and the IRS

Unemployment compensation generally includes, among other forms, state unemployment compensation benefits, but the tax implications depend on the type of program paying the benefits. You must report unemployment compensation on line 19 of Form 1040, line 13 of Form 1040A, or line 3 of Form 1040EZ as represented by any IRS Form 1099-G‘s that you receive,…

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IRS Bartering Tax Center

Bartering is the trading of one product or service for another. Usually there is no exchange of cash. However, the fair market value of the goods and services exchanged must be reported as income by both parties in the year exchanged. The IRS has an online Bartering Tax Center that is worth checking out to help get it…

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Updated Rules Issued for IRS Communications with Appeals Office – Rev. Proc. 2012-18

The IRS Office of Appeals resolves more than 100,000 tax cases each year. Employees staffed in this function are trained to resolve disputes taking into consideration the hazards of litigation as well as the benefits of efficient tax administration. They are not necessarily trained to advocate on behalf of the United States Government’s best interest as they…

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Tax Deductible Job Search Expenses

Recently the IRS’ Outreach Corner published an article stating that if you’re searching for a job, “you may be able to deduct some of your expenses, such as attending career fairs, moving expenses and submitting resumes, on your tax return as long as you are looking for a new job in your current occupation.” This is…

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