Archive for Harold Goedde

New Tax Court Rulings—June 2016

Harold Goedde

Some recent legal rulings from tax court which involving insider trading profits, deductions from business mileage, excessive borrowing on life insurance policy, and taxpayer fraud.

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Some Cautions Affecting Your Tax Situation

For this post, I will present some news about tax topics that may affect your current situation: earned income tax credit (EITC), delayed nonresident refunds, and expatriate income tax.

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Effect of Workman’s Compensation On Taxability Of Social Security Benefits

Harold Goedde

Workman’s compensation for on-the-job injuries is non-taxable if it is to compensate the employee for medical care. But when a person also receives Social Security disability benefits, these benefits can increase the amount of Social Security subject to tax. This article will describe how this interaction occurs and its effect on the amount of taxable Social Security and increase in tax owed.

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Denial of Tax Exemption for Accountable Health Care Organization

Harold Geodde

A ruling by the Internal Revenue Service (IRS) creates a significant obstacle to a new type of health care network that the Obama administration has promoted as a way to provide better care at lower cost, at least according industry lawyers and providers. Health care markets are rapidly changing as independent doctors and hospitals race to form networks, otherwise known as accountable care organizations, in which they coordinate care for patients. The doctors and hospitals have financial incentives to keep patients healthy and to control costs, and they can share in the savings if they meet performance goals. The new entities, which now cover more than 28 million people, according to Leavitt Partners, help manage care for Medicare beneficiaries, people with employer-sponsored insurance, and consumers who buy coverage through online marketplaces under the Affordable Care Act.

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Alimony Payments Made Under Pre­trial Order—Things to Consider

Harold Geodde

In order for alimony payments made under pretrial order to be deductible (for Adjusted Gross Income) and taxable to the ex-spouse, the following conditions must be met:

(1) Payments must be made in cash

(2) Payments are received under a divorce or separate maintenance court decree

(3) The divorce or separation agreement does not designate the payment as something other than alimony (for example, a property settlement)

(4) The payer­ spouse and recipient­ spouse are not members of the same household at the time the payments are made

(5) There is no requirement to make the payments after the payer or recipient’s death.

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Student Gets Caught By The IRS On Education Credit

The credits for education are based on eligible expenses paid in the current year for academic periods beginning in the current year and/or the first three months of the following year. In a recent case, a student paid tuition of $5,895 in December 2011 for the spring 2012 semester that started February 1.

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New Court And IRS Rulings – March 2016

Mortgage Broker­ – No Self Employment Tax.

A broker who managed mortgages received a fee when he sold his house used as a personal residence. He reported the commission as self employment income but the IRS said he has to pay self- employment tax on the commission. The Tax Court overruled the IRS stating that the commission was not subject to self­employment tax because the sale relates to a personal transaction [Guarino, TC Sum. Op. 2016­12].

Deduction Denied for Amounts Paid to Children. Read more

Opportunities For Tax Savings

American Opportunity Credit The tax law passed by Congress in December 2015 extended many provisions retroactive to January 1, 2015 and made many of them permanent. Taxpayers who qualify for the deductions and credits but did not take advantage of them on their 2015 return, can file an amended return to use them. They should also be aware of the ones made permanent and use them in preparing future returns.This article discusses the major provisions to help taxpayers save taxes.

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New Developments – March 2016


Obama Care Penalty Exemptions

For taxpayers who didn’t have health care insurance in 2015, they may be eligible for waiver of the penalty which is $325 person ($162.50 for each child under age 18). Exemptions are for:

(1) taxpayers who can’t afford to pay the premium. This applies if the Read more

Year End Tax Points and Recent Developments


(Some information was reported by The Kiplinger Tax Letter (December 2015)

Timing of year-­end contributions: Contributions made by check are deductible in 2015 if the check is mailed by year­-end. If payment is made by bank credit card, it is deductible in 2015 if the charge is made by year­-end. It doesn’t matter hen the credit card payment is made. If the donation is made with a retail store credit card, the deduction cannot be taken until the card is paid, even though it was charged in

Donations of securities and other property:

This is an excellent way to make a contribution without paying cash. Taxpayers can deduct the fair value of the securities on the date of the gift. Donating appreciated securities Read more

New Developments – Tax Credits For 2015


1. Earned income (EITC).

Taxpayers with no children it is $503, with one child $3,359, two qualifying children $5,548, three qualifying children $6,342 but are subject to AGI phase­outs. The recent tax law makes permanent the increase of $5,000 in the phase­out amount for joint filers scheduled to expire after 2017. The law also makes permanent the increased 45% credit percentage for taxpayers with three or more qualifying children. Under prior law, both increases had been available only through 2017. It also makes permanent the reduced earned income threshold of $3,000. The law makes the following provisions permanent:

(a) Taxpayer Identification Number (TIN) Required. The EITC is denied with respect to any taxable year for which the taxpayer has a TIN that has been issued after the due date for filing the return, including extensions. Read more

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