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Tax Articles

Options Traders and taxes

The 1099-INT and 1099-DIV reported to the Internal Revenue Service details how much you received in interest and dividends through your account, while form 1099-B reported the total proceeds of your sales of stocks and bonds during the year. The amounts shown as interest and dividends should have tallied with your own records. But if…


Cost Basis

On October 3, 2008, President George W. Bush signed the Emergency Economic Stabilization Act of 2008. Tucked away in the Act is a provision that moves the responsibility of basis determination from the shoulders of the taxpayer to the shoulders of the securities industry. After December 31, 2010, every broker that is required to file an information…


Employer Misclassification of Workers

The IRS and Department of Labor have joined forces to reduce employer misclassification of workers. Last fall, the IRS began auditing 6,000 companies to determine if they have misclassified workers as independent contractors or properly classified the workers as employees and paid the required employment taxes. If an individual who has been treated as an…


Failing to Issue Form W-2 to Corporate Officers

A corporate officer who performs substantial services for the corporation and receives compensation is considered to be an employee. The corporation should issue a Form W-2 reporting the compensation as wages and withhold proper amounts for federal income tax, FICA, and FUTA purposes. Recently, the IRS Small Business/Self-Employed Division issued a memorandum providing guidance to…


New Small Business Health Care Tax Credit

The Internal Revenue Service issued new guidance to make it easier for small businesses to determine whether they are eligible for the new health care tax credit under the Affordable Care Act and how large a credit they will receive. The guidance makes clear that small businesses receiving state health care tax credits may still…


Gambling revenue recognition

A retired widow who enjoys playing the slot machines became a regular patron of a casino, and traveled there with friends every other week or so during 2004. Normally the widow would spend at least eight hours at the casino and then return home. However, sometimes she would stay longer and return home after two…


Currently Not Collectible

Currently Not Collectible means that a taxpayer has no ability to pay his or her tax debts. The IRS can declare a taxpayer “currently not collectible,” after the IRS receives evidence that a taxpayer has no ability to pay. Such evidence is usually obtained from the taxpayer on IRS Form 433-F, Collection Information Statement. A…


Tax-Free Employer-Provided Health Coverage Now Available for Children under Age 27

As a result of changes made by the recently enacted Affordable Care Act, health coverage provided for an employee’s children under 27 years of age is now generally tax-free to the employee, effective March 30, 2010. The Internal Revenue Service announced today that these changes immediately allow employers with cafeteria plans –– plans that allow…


HIRE Act of 2010 – Hiring Incentives to Restore Employment

The Hiring Incentives to Restore Employment (HIRE) Act, which was signed into law on March 18th, 2010 provides tax incentives for hiring and retaining workers and purchasing equipment and many other business assets. It also includes new measures that heighten disclosure and reporting requirements for foreign accounts. Some key features of the Act are discussed…


Certificate of Discharge of Property From Federal Tax Lien

There is no standard form available for an application for a Certificate of Discharge of Property from a Federal tax lien. This makes the application a type written letter. Submit your request and all accompanying documents in duplicate to the IRS, Attention Technical Services Group Manager. Use Publication 435 to determine where to mail your…