Oddball Tax Deductions

ACK: Kiplinger 1. A sex-change operation. A man who felt he was a woman trapped in a male body was diagnosed with gender-identity disorder. This transgender taxpayer wanted to deduct almost $22,000 in out-of-pocket medical costs for multiple surgeries, including hormone therapy, sexual-reassignment surgeries and breast augmentation, in order to become a woman. In the…

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Sperm v. Egg Donor Medical Expense Deduction

The First Circuit Court has summarily affirmed the decision of the Tax Court (Magdalin v. Commissioner, T.C. Memo. 2008-293 (Dec. 23, 2008)) denying a sperm donor’s claimed medical expense deduction, even though the Internal Revenue Service allows the expenses of egg donation as deductible medical expenses: (per Priv. Ltr. Rul. 2003-18-017 (Jan. 9, 2003) Petitioner…

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Employee is alien with no green card or valid SS#

My client’s employee is an alien who does not have a green card or valid social security number. As instructed the employer has requested the employee provide a social security number to use on the employee’s W-2, but the employee has failed to do so. What are the employer’s options presuming it is desireable to…

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Colorado Sales/Use tax exemptions eliminated/suspended

Recent legislative changes have eliminated the state sales and use tax exemption for certain items. These changes were developed by state lawmakers to help balance Colorado’s budget. The legislation has no effect on items that are either currently taxable or exempt from sales/use tax by local governments and local districts. All businesses that have Colorado…

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Your Child’s Investment Income – tax implications

The following facts will help parents determine whether their child’s investment income will be taxed at the parents’ rate or the child’s rate. Investment Income Children with investment income may have part or all of this income taxed at their parents’ tax rate rather than at the child’s rate. Investment income includes interest, dividends, capital…

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First-Time Homebuyer Credit Documentation Requirements

The IRS recognizes that the settlement documents can vary from location to location, so here are five tips to clarify the documentation requirements. Settlement Statement: Purchasers of conventional homes must attach a copy of Form HUD-1 or other properly executed Settlement Statement. Properly Executed Settle Statement: Generally, a properly executed settlement statement shows all parties’…

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Are you moving? What to do about taxes …

You can change your address on file with the IRS in several ways: Correct the address legibly on the mailing label that comes with your tax package; Write the new address in the appropriate boxes on your tax return; Use IRS Form 8822, Change of Address, to submit an address or name change any time…

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Retirement Savings Contribution Credit

If you make eligible contributions to an employer-sponsored retirement plan or to an individual retirement arrangement, you may be eligible for the Retirement Savings Contributions Credit: Income Limits The Savers Credit, formally known as the Retirement Savings Contributions Credit, applies to individuals with a filing status and income of: Single, married filing separately, or qualifying…

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Filing for Net Operating Loss Carrybacks

Relief provided under the Worker, Homeownership, and Business Assistance Act of 2009 (WHBAA) allows taxpayers to elect to carry back a net operating loss (NOL) for a period of three, four or five years, or a loss from operations for four or five years, to offset taxable income in those preceding taxable years. An NOL…

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