Home Office Deduction Pitfall – IRS Form 8829

The home office deduction is something that you can choose not to take and sometimes that is the best choice.  If you are legitimately using dedicated space in your house for your on-going business with a profit motive or you are required to keep an office in your house for the benefit of your employer…

Details

Inherited IRA’s Are NOT a Protected Asset Class in FEDERAL Bankruptcy Proceedings

Traditional retirement accounts are generally speaking considered a protected asset should you be required to endure FEDERAL bankruptcy protection. However an Inherited IRA is not generally considered a protected asset in 2 distinguishable regards: The distributions of funds from an inherited IRA to a surviving beneficiary transforms the nature of the IRA.  An inherited IRA…

Details

Self Employed Health Insurance Tax Facts

When signing up for a health insurance plan registered under your business, the business may be able to deduct premiums paid for medical and dental insurance and qualified long-term care insurance for you, your spouse, and your dependents if you are one of the following: A self-employed individual with a net profit reported on Schedule C…

Details

Foreign Earned Income – IRS Form 2555

IRS Form 2555, Foreign Earned Income Exclusion says basically that United States Citizens and resident aliens who live and work abroad may be able to exclude all or part of their foreign salary or wages from their income when filing their U.S. federal tax return. They may also qualify to exclude compensation for their personal services…

Details

Expenses Disallowed by IRS become Constructive Dividends

One of the areas that the IRS more frequently becomes involved in deals with expenses that are deducted by a closely-held corporation. Many expenses are personal to the stockholder/employee. When the IRS reviews such expenses and disallows the expenses for business purposes, the stockholder is deemed to have received a constructive dividend, which is fully…

Details

How Can Someone Legitimately Deduct the Cost of a Ski Trip

So in that I’m a self professed ski bum I often get asked on the chair lift by total strangers how someone can legitimately deduct the cost of s ski trip on their taxes.  Today for some strange reason I felt compelled to research the answer and blog about it. If your ski trip is…

Details

Alternative Minimum Tax (AMT) IRS From 6251

It is blowing my mind how many people this year have become unwittingly liable for the Alternative Minimum Tax.  Good people who thought they had been withholding enough taxes now find themselves owing big. The people hit the hardest seem to have a few common characteristics.  One in particular however stands out, taxpayers that converted…

Details

Protecting Yourself in IRS Collection Matters

The key to slowing down or even preventing the IRS from taking enforcement action is to make certain the IRS representative you are working with places the installment agreement proposal in “pending” status. In order for an installment agreement proposal to be placed in pending status, it must be (1) valid on its face, and (2)…

Details

Can a Personal Service Corporation (PSC) elect Sub-chapter S Status? IRS Form 2553

This is a GREAT question that I’ve been getting lately. The basic answer is – as ALWAYS – it depends. Internal Revenue Code (IRC) 448(d)(2) defines a qualified personal service corporation as an entity where substantially all of the activities involve the performance of services in the fields of health, law, engineering, architecture, accounting, actuarial…

Details

IRS Appeals – Innocent Spouse Claims

This is an overview of actions the Appeals Officer takes during IRS Appeals consideration of an innocent spouse case. It references the IRS IRM 25.15.12.10.  The IRS Appeals Officer is to consider the facts and circumstances of the case and all pertinent information when making a determination.  In addition to this the IRS Appeals Officer…

Details