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Tag Archive for Alabama

Self-Employed? 5 Easy Ways To Lower Your Tax Bill

If you’re like most small business owners, you’re always looking for ways to lower your taxable income. Here are five ways to do just that.

1. Deducting The Cost Of A Home Computer

If you purchased a computer and use it for work-related purposes, you can take advantage of the Section 179 expense election, which allows you to write off new equipment in the year it was purchased if it is used for business more than 50 percent of the time (subject to certain rules).

2. Meal Expenses For Company Picnics And Holiday Parties

If you host a company picnic or holiday party–even if it is at your home–100 percent of your meal expenses are deductible. Prior to tax reform legislation passed in late 2017, 50 percent of your business-related entertainment expenses (with some exceptions) were generally deductible. Starting in 2018, however, entertainment-related expenses are no longer deductible. If you have any questions, please don’t hesitate to call.

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Medicines Exempt From Alabama Sales And Use Tax

Aaron Giles

The state of Alabama is relatively limited when it comes to providing sales and use tax exemptions for medical purchases made by hospitals and health care facilities. However, there is an Alabama sales and use tax exemption available for medicines and other substances consumed by the body.

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An Interesting Look: Alabama’s Latest Online Sales Tax News

Monika Miles

A couple of weeks ago we started a series that looks at the ramifications of various online sales tax legislation states across the country are proposing and signing into law. We started with Colorado as they’ve been at the forefront of the debate since 2010. Today we take a look at Alabama!

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New Tax Filing Security Protocols

Annette Nellen

New Security Step – IR-2016-124 (9/22/16) – The IRS alerted people filing an extended return electronically for 2015 (due 10/17/16), that they likely would be asked to enter their AGI (Adjusted Gross Income) for 2014. The purpose is to help properly identify the taxpayer. The information release reminds people how to order a tax transcript from the IRS should they not have it.

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“Words Have Meaning — Especially Statutory Words”

By Michael J. Fleming

One of my mentors constantly reminds me that, “We are accountants; words have meaning.” My immediate response is to usually think that, “if we were not accountants would words not have meaning?” However, once I get past my sarcastic thoughts, I realize that he is challenging us to be more precise and succinct in our writing and to not just read surface meanings but to really analyze the words for alternative meanings. Looking for alternative meanings is especially important when it comes to state tax audit defense. Since you can’t change the facts, you sometimes have to change the argument.

This concept was illustrated quite pointedly in the recent decision of Van Horn v. Alabama Department of Revenue, Alabama Department of Revenue, Administrative Law Division, No. S. 12-863, January 3, 2013. In this case, the taxpayer or his employees traveled throughout AL to take photographs which were later developed at the home office and sent to customers by common carrier. The taxpayer also made in-person phone calls. The DOR examiner assessed the taxpayer for the local taxes based on the sales and photographing visits. The administrative law judge agreed that it could be argued that the taxpayer had purposely availed himself of the economic market and met the conditions of Quill. However, Quill did not apply because the DOR had not updated its regulations concerning local nexus. Basically the only activity that mattered was solicitation and the taxpayer actually traveled into four jurisdictions to solicit sales. However the Administrative Law Judge (ALJ) found that this was still not enough to create nexus. His reasoning was that the statute read “salesmen” while in the taxpayer’s case there was only one “salesman”. He clarified that since the state only used the plural form, the regulation anticipated multiple sales people and therefore the taxpayer did not have nexus.

Words have meaning! In this case the state failed to update its language to be more encompassing and capture the implications of Quill as well as using only the plural form of a word. What great illustrations! We don’t suggest taking this approach when doing tax planning but when you find yourself in an audit situation having someone who can think outside the box is invaluable. My mentor constantly forces us to do so.

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