Recently, new developments have occurred regarding deductibility of legal expenses for a job related lawsuit, deductibility of interest on student loans paid by parents for a child, use of an internet tax stamp, a defective IRS deficiency notice, and an extension for an IRA rollover due to a bank’s error. Each of these will be discussed.
Archive for Harold Goedde
The IRS will not accept tax returns until January 23, 2017. The filing deadline will be April 18 due to April 15 falling on Saturday and the Emancipation Day holiday in Washington D.C. on April 17.
Congress (in the PATH Act) mandated the IRS to delay some refunds until February 15.
Taxpayers who have a tax deferred retirement plan (e.g., a 401K, 403B, 457B) or an IRA must take a required minimum distribution (RMD) when they reach age 70 ½ which is reported as ordinary income. In the year you become 70 ½, you can defer the first distribution until April 15 of the following year.
A loss from a legitimate business activity is fully deductible against other income. If the loss exceeds income, it can be carried forward to offset business income in future years. If an activity is deemed a hobby by the IRS, a loss cannot be deducted. The IRS has many criteria for determining whether an activity is a hobby or a business [See the author’s article on hobby losses for details].
Here are a list of developments that occurred earlier in the year and the tax implications that follow them.
Unless Congress passes legislation to extend them, the following provisions are set to expire on December 31:
The amount for single and marred filing separate is $6,300 ($7,850 if 65 and over or blind), surviving spouse and married filing joint $12,600 plus $1,500 for each spouse 65 and over, or blind, heads of household $9,300 plus $1,250 if 65 and over or blind. For taxpayers claimed as a dependent on another return, it is the greater of (a) $1,050 or (b) $350 plus earned income. The amount can’t exceed the basic standard deduction.
This article will discuss the requirements to claim a relative as a dependent, items considered as support and items not considered as support. It also discusses multiple support agreements.
Requirements for claiming an exemption. ALL of the following must be met or the exemption will be disallowed by the IRS.
This article will discuss the requirements to claim a child as a dependent and the requirements for a non-custodial parent to claim an exemption. It also discusses the ”tie breaker” rule, voluntary release of the exemption by the custodial parent to the non-custodial parent, and a recent Tax Court decision that dealt with this issue.
The IRS Practice and Procedure group is confronting the latest scheme to target taxpayers. The IRS and its Security Summit partners warned Thursday that scammers have sent fake emails purportedly containing CP2000 notices, which are used in the IRS’s Automated Underreporter Program.
This article discusses debt securities issued by the federal government—treasury securities and savings bonds and non-taxable bonds issued by states and municipalities.