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Tax Home

Posted on February 14, 2021 at 2:25 PM Comments comments (8545)

Your tax home isn’t always where you live. A self-employed attorney

who had law practices in D.C. and Minn. divided his time between the two locales.

He lived in Minn., and he stayed in a hotel or temporary apartment while in D.C.

In general, your tax home is where your principal place of business is located.

The Tax Court said the lawyer’s tax home is in D.C. He spent more days working

in D.C., most of his business...

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Early Withdrawal of 401-K etc.

Posted on February 14, 2021 at 2:20 PM Comments comments (13749)

The 10% additional tax on early withdrawals is a tax, the Tax Court decides.

A 42-year-old woman who took a distribution from her workplace retirement plan

argued that she wasn’t liable for the 10% levy because it was a penalty or other amount

that required prior written supervisory approval. The Court rejected her claim,

saying the levy is a tax and not a penalty, addition to tax or additional amount.

As a result, prior written supervisory approval is unne...

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Stimulus Payments

Posted on February 14, 2021 at 2:15 PM Comments comments (12208)

Be sure to properly account for the stimulus payments you received.

You should have gotten a letter from IRS stating the amount of your first payment.

IRS hasn’t yet sent a notice for the second payment, but it says it intends to do so.

You can also go to to set up a Secure Access account

with multifactor authorization to check the payments IRS says that it sent to you.

Accidentally doubl...

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Self Employed 2020 Update

Posted on February 14, 2021 at 2:15 PM Comments comments (3808)

Schedule SE has been revised to allow for deferral of self-employment taxes.

Self-employeds can defer a portion of their SECA tax on earnings from self-employment from March 27 to Dec. 31, 2020, with half of the deferred amount due Dec. 31, 2021, and the rest on Dec. 31, 2022. Figure the maximum deferral on Part III of Schedule SE.

Include the total SECA tax on line 4, Schedule 2 of the 1040. The deferred amount goes on line 12e of Schedule 3. Opting f...

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Innocent Spouse

Posted on January 31, 2018 at 2:30 PM Comments comments (39919)

A not-so-innocent spouse gets innocent spouse relief in this case.

A couple who later divorced failed to report on their jointly filed return

taxable payouts from the wife’s retirement account, a portion of which was deposited

into the couple’s joint checking account. She claimed on audit that her ex-husband

should be liable for half the deficiency. IRS and the Tax Court let him off the hook

because, although all sides agreed that he should have known...

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Business Losses Write Off

Posted on January 31, 2018 at 2:25 PM Comments comments (17399)

Taking your C corporation’s losses on your individual return is a no-no.

Two brothers who were the sole shareholders in a regular C corporation

that operated a cattle business deducted the firm’s losses on their 1040 returns.

The brothers, who owned the livestock, claimed that the firm acted as their agent.

But its overall business purpose was to manage and run the cattle operation.

It hired and paid employees, took out workers’ comp and other i...

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Employers are required to file W-2s with the federal government by Jan. 31.

Posted on January 16, 2018 at 1:05 AM Comments comments (2186)

Employers are required to file W-2s with the federal government by Jan. 31.

This deadline matches the due date for sending copies of the forms to employees. The Jan. 31 date also applies to 1099 forms reporting nonemployee compensation.

The Service acted quickly to rein in prepayments of real property taxes.

Posted on January 16, 2018 at 1:00 AM Comments comments (19511)

The Service acted quickly to rein in prepayments of real property taxes.

Prepayments are deductible only if the property tax was assessed in 2017,

IRS says. For example, a county assesses 2017-18 property taxes on July 1, 2017, and bills the taxes in two installments, with the second due Jan. 31, 2018. Individuals who prepaid the second installment in 2017 can take a 2017 deduction for the amount.

But people aren’t able to wri...

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Nine Facts About the Adoption Credit

Posted on January 11, 2018 at 10:30 PM Comments comments (27554)

Adoptive parents around the country may qualify for a tax credit. Parents who either adopted a child or tried to adopt a child may claim the adoption credit. Here are nine things you should know about this credit.

Credit. The credit is nonrefundable. This means the credit may only reduce a taxpayer’s tax liability to zero. If the credit is more than the tax owed, the taxpayer can’t receive an additional amount as a refund.

Credit carryover. Taxpayers can carry any un...

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Employers: ACA and Holiday Workers

Posted on December 4, 2016 at 11:15 PM Comments comments (1846)

Employers that hire Holiday Help: Understand the Health Care Law’s Rules Around Seasonal Workers


As an employer, your size – for purposes of the Affordable Care Act – is determined by the number of your employees. If you hire seasonal or holiday workers, you should know how these employees are counted under the health care law.


Employer benefits, opportunities and requirements are dependent upon your organiz...

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