With more than 350 combined years of experience in tax and tax-related fields, our experts share their practical insights on the latest topics affecting taxpayers.
Regulations clarify treatment of final Form 1041 excess deductions
Beneficiaries may be able to claim some deductions that were not deductible by the estate or trust on the final Form 1041 under final regulations.
How does the gift tax medical exclusion work?
A client pays medical expenses for a non-relative. Can they take a deduction for medical expenses? Are they subject to gift tax?
Unemployment compensation exclusion on 2020 returns
ARPA exempts the first $10,200 of unemployment compensation per person for 2020.
How much can a parent expect to receive for the child tax credit in 2021?
A noncustodial parent, who claims his two children on his tax return, is interested in the changes made to the child tax credit for 2021.
How does a small business deal with receipt of virtual currency?
A sole prop is paid virtual currency for work. How do they report it on their tax return? What about the checkbox on Form 1040 and what if they sell it?
Foreign earned income exclusion: Waiver of time requirements due to adverse conditions
The IRS waived the 2020 foreign earned income exclusion time requirement in Iraq.
“Childless” taxpayers and the Earned Income Credit
Taxpayers who were previously excluded from the earned income credit because of their living situations may now be able to claim it
The Earned Income Credit rules, explained
Overview of the rules for the earned income credit (EIC)
It’s all about balance (sheets)
Business owners should know the components of balance sheets and how others will use balance sheets. Find out more from The Tax Institute.
COBRA premium assistance guidance for 2021
The DOL has released a set of FAQs providing comprehensive guidance on temporary COBRA premium assistance under ARPA.
Revocation of Form 8332
Releasing a child’s exemption releases the child's credits. To revoke the release, a custodial parent must file Form 8332.
Question of the Week: Must a newlywed same-sex couple file as married filing jointly or separately, even if they would like to use single or head of household filing statuses?
Must a newlywed same sex couple file as married filing jointly or married filing separately, or can they file as head of household and single in 2020 as they did prior to their wedding?
Excess APTC for 2020 suspended; IRS to adjust already-filed returns
Taxpayers do not need to repay excess advance premium tax credits (APTCs) or file Form 8962 to reconcile the APTC when they file their 2020 tax returns.
Form 1040 due date May 17, 2021; IRS gives more relief to Form 1040 filers
The due date to file and pay 2020 individual tax returns (Form 1040) is postponed to May 17, 2021. Penalties and interest will not accrue before May 18.
Does a 2020 retirement plan offset qualify for special 2020 COVID-19 retirement rules?
Question of the Week 3/31/21: Two clients had outstanding 401(k) loans when they lost their jobs due to COVID-19. Will they qualify for the 2020 retirement plan loan offset rules?
How do distributions and losses that exceed basis impact an S corporation shareholder?
An S corporation shareholder took distributions from his business, guaranteed a business loan and co-signed a loan in 2020. How does this affect his basis?
Overview of the American Rescue Plan Act (ARPA)
The American Rescue Plan Act (ARPA) makes a third round of stimulus payments, suspends tax on unemployment benefits, and temporarily modifies family and small business tax benefits.
Is a self-employed taxpayer eligible for a tax credit for the lost workdays due to Covid?
Question of the Week 2/17/21: How do the self-employed calculate tax credits for COVID-19 sick and family leave?
Four things taxpayers need to know before opening an ABLE account
Potential tax consequences, heavy recordkeeping, and complications with other government benefits could surprise some families with ABLE accounts, if they’re not prepared.
Unemployment income and kiddie tax
Is unemployment income subject to kiddie tax? Short answer is yes, find out more here.
Can a college student living with their parents receive a recovery rebate credit (RRC)?
Question of the week: Four full-time college students have asked about the recovery rebate credit. When can a college student claim the recovery rebate credit?
Recovery Rebate Credit Calculation FAQs
In this article we go over the calculation steps and use examples to explain how the RRC works from the new set of FAQs on the recovery rebate credit (RRC) now available on IRS’s website.
Tax consequences of a traditional IRA to a Roth conversion and how soon money is available
Question of the Week 2/10/21: Can my client transfer funds from his traditional IRAs to a backdoor Roth and what are the tax consequences of doing so?
Six questions and answers for new and growing businesses: Common business owner mistakes when hiring employees for the first time
Hiring workers will inevitably make a small business’ tax filings more complex in many ways. Careful planning can help prevent later headaches.
Simplified tax accounting rules for small businesses are finalized
Final regulations implement changes the TCJA made to small business accounting rules. Learn more about the simplified tax accounting methods.
Taxpayers impacted by COVID-19 use Form 8915-E to report early distributions from retirement accounts
Question of the week: When is Form 8915-E used to report COVID-19 distributions by qualified individuals? Find out from The Tax Institute at H&R Block
Are income tax and deduction rules different for second draw PPP loans?
Question of the week: A small business client applied for a second draw PPP loan. Which expenses can be forgiven? Are expenses paid with the forgiven loan deductible?
New items in the Form 1040 final instructions 2020
The IRS has released the final version of Form 1040 instructions for tax year 2020.
How does MAGI impact the cost of Medicare? Can a taxpayer appeal increase of Medicare premiums due to increased MAGI?
QOTW: 1/21/21 What life-changing events make Medicare recipients eligible to appeal Medicare premium increases, an income-related monthly adjustment amount (IRMAA)?
Final regulations clarify real property definition for like-kind exchanges
Notably, the final regulations generally allow state and local law to determine if property transferred in an exchange is real property.
Can a taxpayer roll-over funds from an IRA to an HSA?
Question of the Week 12/09/20: How to make qualified HSA funding distributions
A client loses job early in 2020. Can they use their 2019 earned income to figure their 2020 credits?
Question of the week: Can a taxpayer use their prior year earned income to figure their 2020 EIC or ACTC credits? What about gross income and AGI?
New law and updated PPP guidance on deducting eligible expenses paid with PPP loan proceeds
The new law provides that taxpayers are allowed deductions because of the exclusion from income of the recipient’s forgiven PPP loan.
Cryptocurrency: Secret currency or taxable property?
Learn about how the IRS treats cryptocurrency transactions. We explain what counts as cryptocurrency, tax rules, and when to check the cryptocurrency box on Form 1040.
Top 10 tax provisions for 2020
Learn about key changes under the CARES Act, FFCRA, and other legislation passed in response to COVID-19, and others that will impact 2020 tax returns filed during 2021.
Covid relief under Consolidated Appropriations Act of 2021 (CAA)
Consolidated Appropriations Act (CAA) of 2021 provides a new round of stimulus, expands unemployment, and contains more Covid related tax provisions for individuals and businesses.
Coronavirus (COVID-19) stimulus rebate payments to individuals
Find out the latest information on the 2020 coronavirus stimulus payment (rebate) paid as an advance credit to eligible individuals.
What tax credits can foster parents claim for a child placed with them midyear?
Question of the week: My clients are caring for a foster child placed with them around midyear. Can they claim him as a dependent and for the child tax credit?
New guidance allows taxpayers to choose the best bonus depreciation elections
IRS guidance provides relief for taxpayers to make or change elections based on bonus depreciation regulations.
How is self-employment tax deferral for 2020 reported on Schedule SE and Schedule 3?
A self-employed client wants to take advantage of the self-employment tax deferral under the CARES Act. How is that accomplished on his tax return?
Checkbox for virtual currency
IRS requires disclosure of virtual currency transactions with the virtual currency checkbox on Form 1040 and provides guidance on hard forks and air drops of virtual currency.
SALT cap doesn’t apply to state income taxes paid by passthrough entities
The $10,000 cap on state and local taxes (SALT) doesn’t apply to state income taxes paid by passthrough entities.
When must small employers pay FFCRA COVID-19 sick leave?
Is a small employer required to pay sick leave under FFCRA because an employee with COVID-19 must quarantine? What if other employees must quarantine?
What types of HRAs should a small business owner consider offering his employees?
Question of the week: What are the pros and cons of the different HRAs available to a small business owner with three employees?
Form W-2 reporting for the 2020 employee payroll tax deferral
Learn how employers who chose the payroll tax deferral starting with the first Sept. pay period through the end of 2020 should handle Forms W-2 and W-2c.
Can federal tax withholding on a coronavirus-related retirement distribution be allocated over three tax years?
Question of the week: If 10% tax was withheld on a coronavirus-related retirement distribution, can the tax be allocated over three years?
Star Wars: The tax return of the Jedi
With the premiere of another chapter in the story, The Tax Institute explores some potential tax issues from the “Star Wars” universe.
May an employer deduct holiday party expenses?
Question of the week: Can an S corp deduct the entire cost of holiday parties for the whole staff and planning sessions only for owners of the S corp?
What's in a game? Meals and entertainment final regulations under the TCJA
Final regulations from the Treasury Department and IRS address changes made by the TCJA to business meal and entertainment expense deductions.
What tax impacts should a business owner consider before they hire their children?
Question of the week: What tax, labor and other considerations are involved when business owners hire their children? The Tax Institute explains.
Are travel expenses to avoid a long commute deductible?
Question of the week: May a taxpayer deduct the cost of transportation, meals, and lodging to stay near her business office?
Final regulations clarify qualifying relative gross income and support tests
Final regulations do not apply the zero exemption amount to the qualifying relative gross income test for 2018-2025 and clarify alimony rules for the support test.
New guidance explains SECURE Act provisions
IRS guidance on the SECURE Act addresses post age 70½ IRA contributions, qualified birth and adoption distributions, and a new small business tax credit.
Does the mailbox rule apply to a private delivery service?
Question of the week: Can penalties and interest be waived for a return timely filed through a private delivery service? Does the mailbox rule apply?
How does the SECURE Act coordinate traditional IRA contributions and qualified charitable distributions (QCDs)?
Question of the week: How does the SECURE Act coordinate traditional IRA contributions and qualified charitable distributions (QCDs)?
Can dependent care FSA funds be used to pay for home tutoring to help with distance learning?
Question of the week: Is home tutoring to supplement distance learning a qualifying expense for the dependent-care FSA? Find out from The Tax Institute.
ITIN renewal period for 2020 tax returns underway
ITINs unused in the last three tax years or issued before 2013 must be renewed. Learn more about ITIN renewal from The Tax Institute.
Payment and filing deadline extension, bad check penalty relief, interest on overpayments
The Treasury Department postponed the due date for paying and filing 2019 federal income tax from April 15 to July 15, 2020 due to COVID-19.
ITIN renewal and how to prepare
New rules call for expiration, deactivation, and ITIN renewal for millions of taxpayers. Here's how to prepare for ITIN renewal.
Can the IRS audit taxpayers year after year?
While the IRS has discretion to audit taxpayer returns for the same issues on subsequent years, taxpayers can invoke an IRS policy to try to suspend the repetition
Taxing the gig economy, Part 1: ‘Interesting tax situations’ create gray areas for on-demand drivers
Here’s what we know and what we don’t know about business mileage deductions for drivers using ride-sharing apps
Qualified improvement property and CARES Act retroactive changes
A provision in the CARES Act treats qualified improvement property (QIP) as 15-year property, making it once again eligible for 15-year MACRS depreciation or bonus depreciation.
Final regulations on business payments to state-sponsored charities
Final regulations provide a safe harbor and define the quid pro quo principle for business entity payments to certain charities in return for consideration.
Heavy highway vehicle use tax deadline approaching
The deadline for filing Form 2290, Heavy Highway Vehicle Use Tax Return, is August 31, 2020, for the taxable period that runs from July 1 through June 30.
What are the tax consequences of repaying unemployment benefits?
Question of the week: What does repaying unemployment benefits mean for taxes? Can you net the repayment with the benefits? Is there a deduction or credit?
Misconceptions abound in Native American tribal income taxation
Benefits for individual Native Americans are taxable, but some specific and common exclusions can apply
Employee leave, employer credit provisions, reporting on W-2
Families First Coronavirus Response Act (FFCRA) signed Mar. 18, 2020 requires coronavirus emergency leave for certain employees and tax credit for employers.
Back to basics: What small employers need to know when withholding taxes for an employee
Find out more about employer payroll taxes with a helpful checklist from The Tax Institute.
Does residency status lapse by returning to the taxpayer’s home country at the end or beginning of a tax year?
Question of the week: A client visited the U.S. for part of two years. She left in late 2019 and returned in early 2020. Does her residency status lapse?
Expanded special enrollment exam (SEE) extension guidance
The three-year extension for passing the special enrollment exam (SEE) now applies to parts passed on or after June 1, 2020 as well as parts not expired as of February 29, 2020.
Making sense of whether to expense or depreciate a business asset
Find out when you should either depreciate or expense a business asset including rules for bonus depreciation, with help from The Tax Institute.
Inherited IRAs and RMDs in the time of the CARES Act
Question of the week: What are the options for inherited IRAs and RMDs under the CARES Act?
Businesses must report cash payments over $10,000; e-filing options available
Learn what money instruments are considered cash and how taxpayers should report business-related payments over $10,000, which may now be batch filed.
CARES Act eases retirement plan distribution and loan rules for those impacted by COVID-19
Learn about the CARES Act’s allowance of special tax treatment for COVID-related distributions and loans from retirement plans.
PTIN fees are back for tax season 2021
PTIN fees of $35.95 will be collected for tax season 2021. The fee is $21 plus a $14.95 vendor fee. PTIN applications and renewals will start in fall 2020.
Is income a dependent earns from tutoring self-employment income?
Question of the week: Is income earned by a teenage dependent self-employment income? Does the teen have to file a return and pay self-employment tax?
Partnership amended returns under Rev. Proc. 2020-23
A new revenue procedure changes the partnership audit procedures for amending 2018 and 2019 partnership returns (Form 1065).
QBID final regulations address treatment of suspended losses
Final qualified business income deduction regulations explain how suspended and disallowed losses, including excess business losses, work with the QBID.
Is a forgiven PPP loan taxable? Are business expenses paid with the loan deductible?
Question of the week: My client’s PPP loan was partially forgiven. Is the forgiven debt taxable? Can she still deduct business expenses paid with the loan?
New vehicles for qualified plug-in electric drive motor vehicles credit
The IRS has updated for 2020 and 2021 its listing of vehicles that qualify for the up to $7,500 qualified plug-in electric drive motor vehicle credit.
Choice of entity: Qualified business income deduction (QBID)
How the qualified business income deduction (QBID) impacts which entity taxpayers choose including information for corporations, partnerships, and sole proprietors.
IRS guidance explains CARES Act RMD waivers and rollover opportunities
The CARES Act allows taxpayers to waive required minimum distributions (RMDs) for 2020. Learn which RMDs are eligible and the date for repayment.
Proposed regulations address qualified parking fringe benefits
Proposed regulations give employers methods for determining the disallowance of an employer deduction under the transportation fringe benefits rules.
Does my client have to file his 2019 tax return by the July 15, 2020 due date?
Question of the week: A client has come in and asked if he must file his 2019 tax return by July 15, 2020. Is there any benefit for him to wait?
Post-death tax planning for the unprepared, Part 1: Who is responsible for managing tax issues?
For post-death tax planning, the personal representative should identify the deceased person’s assets, notify payers, and handle any financial or tax issues for the deceased.
Putting (restricted) stock in the future: How startup employees can navigate their options
Employees with restricted stock should evaluate the company’s outlook – and consult with an experienced tax advisor when deciding on the right tax treatment
IRS impersonator scams feel real if you don’t understand the real IRS
Taxpayers can avoid IRS impersonator phone scams by knowing how the IRS really works
Can taxable military retirement be reduced by the percentage of a VA disability rating?
A client retired from the military and receives a retirement pension for length of service and also has a 30% VA disability rating. Can he reduce his taxable retirement military pension by the percentage of his VA disability rating?
SBA, PPP loans, and PPPFA guidance
Find out more about COVID-19 related business payroll protection program including rules for time to repay loans for employee retention credit purposes and business expenses
Employee retention credit (CARES Act)
Learn more about the COVID employee retention credit, including who qualifies for the credit and how to claim it.
Proposed regulations define “real property” for like-kind exchanges
New proposed regulations, for the first time, supply a definition of “real property” for §1031 purposes.
HSA and HDHP relief for Coronavirus COVID-19 benefits
High deductible health plans (HDHPs) may offer novel coronavirus (COVID-19) health benefits before the minimum deductible is met and not jeopardize HSA-eligible status.
Family and Dependents, Part 3: Further oddities
Read more about family and dependent tax oddities including information on how unrelated people can be qualifying relatives, dependents living in Mexico or Canada, and the rules for dependents claiming dependent tax benefits.
Tax treatment of two health care options: direct primary care arrangements and health care sharing ministries
Proposed regulations clarify the tax treatment of two types of health care: direct primary care (DPC) arrangements and health care sharing ministries.
Are retirement distributions due to coronavirus furlough taxable or subject to the 10% penalty?
Question of the week: Clients took early retirement distributions from IRAs after coronavirus furloughs. Are distributions subject to tax and penalty?
Can taxpayers deduct medical expenses for a nondependent child?
Question of the week: Can taxpayers deduct their daughter’s medical expenses even though she doesn’t qualify as their dependent?
Use SEPP distributions to tap retirement funds penalty-free
Substantially equal periodic payments (SEPP distributions) allow early access to retirement funds, penalty-free, with tight restrictions
Final regulations on tax-exempt organizations clarify reporting issues
Updated reporting requirements impact tax-exempt organizations with receipts of $50K or less, 501(c)(3) charitable organizations and 527 political organizations.
Premium tax credit unaffected by zero personal exemption
Proposed regulations redefine “family” for premium tax credit purposes to mean the taxpayer, spouse, and dependents listed on the taxpayer’s tax return.
How do COVID travel disruptions impact the foreign earned income exclusion?
Question of the week: Can someone who planned to live and work abroad for 2020 but returned to the US because of COVID-19 exclude foreign earned income in 2020?
2020 Mid-year health FSA elections
Question of the week: Client’s employees want to change their 2020 elections due to COVID-19. Can the client allow employees to make mid-year changes?
Choice of entity: Tax considerations for business owners
When setting up a business, many factors come into play, but the most important considerations include the choice of entity. In this article, learn about the tax factors to make the best choice for your business.
The military and State taxes: Do military members pay state taxes?
Special rules tell when the military and spouses pay state taxes in one state, multiple states, or even no state if there is a military state tax exemption
Greener updates: Three tax incentives for energy efficiency taxpayers should consider
Financial incentives for energy efficiency such as tax breaks, special financing, and private-sector programs can help individuals and businesses make greener updates
COVID-19 health plan and cafeteria plan relief
The IRS has issued a pair of notices providing additional relief for employers’ cafeteria plan offerings, including health insurance, health FSAs, and dependent care FSAs.
COVID-19 medical condition travel exception
Question of the week: Can nonresidents who stay in the U.S. too long for substantial presence test or treaty purposes because of COVID-19 travel restrictions use the medical condition travel exception?
Coronavirus COVID-19 tax relief resources
Find COVID-19 / coronavirus tax relief resources including the July 15 deadline for payments and filing and links to other resources, continually updated
Is there a credit for installing home recharging equipment for my client’s plug-in electric vehicle?
Question of the week: Is there a credit available for installing personal use or residential electric vehicle recharging equipment?
Business assistance for COVID-19 (FFCRA & CARES Act)
The CARES Act creates business assistance with tax benefits including employer retention credit and penalty relief. Also, find more information on small business assistance available through the SBA.
Choice of entity: Nontax considerations for business owners
When setting up a business, many factors come into play but the most important considerations include the choice of entity. In this article, learn about the nontax factors business owners must evaluate to make a choice of entity.
U.S. taxpayers with foreign investments should be proactive
Taxpayers with foreign investments should be sure to meet U.S. tax requirements or face penalties. Find out more information here.
Disclaiming inheritances: What taxpayers should do when they inherit something they don’t want
Prevention is best – but taxpayers can take specific steps when inherited assets cause more problems than they’re worth by disclaiming an inheritance.
Can a client recontribute a partial college tuition refund to a 529 plan?
Question of the week: Our clients got a partial refund of their child’s tuition expenses paid from a 529 plan. Is it taxable? Can they put the refund back in the 529 plan?
Cross-border guidance for individuals and businesses
IRS announces cross-border guidance for individuals and businesses whose activities and international travel plans have been disrupted due to the pandemic.
Crowdfunding and taxes: One platform with many tax results
Despite lack of IRS guidance in the emerging area of crowdfunding and taxes, taxpayers and their advisors should be aware that different tax rules apply to various types of income and donations made through online fundraising
Can wash sale losses offset capital gains?
Question of the week: A client sold two different stocks, then he repurchased them a few weeks later. Can he offset his wash sale losses with wash sale capital gains?
Parking space sharing app and potential tax implications
Individuals who are auctioning or leasing parking spaces should look into the tax implications
Health savings account (HSA) use for complex family health insurance situations
Question of the week: What is the maximum HSA contribution when insurance covers a taxpayer and her nondependent child? Can the taxpayer’s HSA funds pay expenses for the covered nondependent child? Can the HSA funds pay expenses for a dependent child who is covered by a different plan?
Offer in compromise (OIC) user fee changes
Final regulations on offers in compromise (OICs) increase user fees and provide a new way for low-income taxpayers to receive a waiver of the fee.
New rules for NOLs under CARES Act
The CARES Act modified the rules for NOLs, replacing some of the rules made by the Tax Cuts and Jobs Act. Read more here.
Family and dependent tax rules, Part 2: Oddities
The IRS rules for dependents can be confusing especially when various generations live under the same roof. Find out more about the oddities of tax law family benefits here.
Can a client recharacterize a Roth IRA contribution to an IRA contribution?
Question of the week: Can a Roth IRA contribution be recharacterized as a deductible IRA contribution? How would taxpayers account for a loss?
Social security delayed benefits will no longer be an option for married couples
In light of the law that eliminated two popular strategies, married couples retiring in the future need to rethink how to maximize SSA spousal benefits.
Individual tax changes in the CARES Act
The CARES Act includes tax changes for individuals (such as a stimulus payment) including tax changes for student loans and retirement rules.
What rules apply to the above-the-line charitable deduction?
Question of the week: What rules apply to the new $300 above-the-line charitable deduction? Do you have to keep records? Are clothing donations eligible?
Transferring property to family: Keeping it in the family can get complicated
What a father’s stock portfolio, an aunt’s house, and a mother’s antique collection can teach us about family property transfers
Are home office deductions while under mandatory COVID-19 shutdown allowed?
Question of the week: Can a client who has to run her business at home while her office is under a mandatory shutdown take the home office deduction?
Will a tax refund be offset to pay down past-due tax liability?
Question of the week: If a client owes installment agreement payments from a prior tax year, does this year’s refund offset to pay the previous tax debt?
Coronavirus (COVID-19) 90-Day Tax Filing Deadline and Payment Deferral FAQs
Find more information here on Notice 2020-18 in which the IRS provides FAQs on the tax payment and filing deferral for coronavirus (COVID-19).
Stopping scheduled balance due payments with the IRS
Find out more on cancelling scheduled tax payments when filing a return and when payments are scheduled through direct pay, EFTPS, or credit and debit cards here.
New guidance for reporting tax-favored foreign savings trusts
New guidance exempts some taxpayers from filing Form 3520 to report tax-favored foreign savings trusts (most commonly foreign retirement savings trusts).
Using the third party designee option on Form 1040
Complete the “Third Party Designee” section above the signature line on Form 1040 to designate a tax preparer’s firm as a third party designee.
Roth 401(k) distributions before 5 years of participation
Question of the week: Can a 72-year old client withdraw money, tax free, from a Roth 401(k) that is not yet five years old?
There’s a menu of retirement plans for the small employer
When selecting retirement plans to offer employees, small business owners should consider their goals, finances, employees, and tax implications with advisors
The ‘safe harbor’ home office deduction: Easier may not be better
Self-employed taxpayers should run the numbers both ways, the safe harbor calculation and the traditional method, to determine the home office deduction
Fifth Circuit: ACA shared responsibility payment is dischargeable in bankruptcy
The Fifth Circuit held that the ACA shared responsibility payment (SRP) is not entitled to IRS priority status and thus dischargeable in bankruptcy.
Casualty loss related to Hurricane Dorian
Question of the week: Can a taxpayer claim a casualty loss related to Hurricane Dorian even though the IRS didn’t allow any filing postponements?
Foreign housing expense adjustments for high-cost areas
Higher foreign housing expense ceilings for those who live and work in high-cost areas abroad let them exclude a larger portion of housing expenses.
How much earned income is needed to maximize child-related credits?
Question of the week: How can a single parent, concerned she lost her child and dependent care credit because of her low earnings, maximize the credit?
In-game currencies Roblox and V-bucks are not reportable
The IRS removed Roblox and V-bucks, used only in gaming environments and not convertible to real currency, from the list of reportable virtual currencies.
Reduced AMT exemption for kiddie tax is suspended
The special AMT exemption that applied to children subject to the kiddie tax is temporarily suspended, generally providing a much higher exemption amount.
Can the gain on the receipt of a truck be deferred in a like-kind exchange of rental property?
Question of the week: Can the gain on the receipt of a truck be deferred in a like-kind exchange of rental property?
Here come the Royals! Dual-citizenship and tax considerations
What are the tax implications for a couple with various dual-citizenship combinations? The possibilities for Prince Harry and Meghan, the Duchess of Sussex, create interesting considerations.
‘Unlikely landlords’ may be looking to donate rental property to charity
Taxpayers and their advisors should understand three common scenarios that can reduce or negate any benefit from donating rental property to charity
New kiddie tax worksheets: Optional election to use parent’s rate
New Form 8615 Instructions reflect SECURE Act changes and give an optional calculation using the parent’s rate to figure kiddie tax.
Early distribution from Roth after conversion
Question of the Week: If a client makes a Roth IRA conversion contribution and then closes the account, what are the tax impacts of the early distribution?
Divorce and taxes: Dividing retirement savings when love hurts
When retirement plan assets are divided after a divorce, taxes can hurt. Learn how qualified domestic orders and post-divorce property transfers can help.
Navigating the new Form 1040
After introducing a new Form 1040 in 2018, the IRS redesigned it again in 2019, consolidating six schedules into three and adding back some items on the 1040. Further changes were made for 2020.
Can unmarried parents living together use Form 8332?
Question of the week: Can unmarried parents who live together use Form 8332 to release their child’s tax benefits from one parent to the other?
Showtime: Taxes in the movies
This awards season, take a look back at movies that feature taxes in their plots. Warning: potential decades-old spoilers ahead.
The New Form W-4
The finished Form W-4 redesign incorporates new withholding tables and uses more of the taxpayer’s information to determine an accurate withholding amount.
Can 529 plan funds pay for a college student’s off-campus room and board?
Can a college student living off-campus pay for it with qualified 529 plan distributions since the room and board payments aren’t for on-campus housing?
Payments to visiting research scientist exempt under Russian treaty
The Tax Court found that a special provision of the U.S.-Russia treaty allowed a visiting researcher who was paid a “salary” to treat the payments as “similar” to an exempt grant.
Relief for taxpayers with discharged student loans
Learn about new safe harbor tax relief for taxpayers with discharged federal or private student loans taken out to attend nonprofit or for-profit schools.
Can a client take an HSA distribution for prior-year expenses?
Question of the Week: Can a client reimburse herself from her HSA for expenses she paid out-of-pocket in 2019? Yes—if she meets certain rules.
The People vs. Al Capone
Full of betrayal, bribery, and bootleggers, explore the events leading up to the tax evasion trial that brought down Al Capone on the 100th anniversary of Prohibition.
Does foreign real property qualify for a like-kind exchange?
Question of the Week: Does U.S. property exchanged with foreign property qualify for like-kind exchange treatment?
Extended tax provisions for individual taxpayers
These provisions for individuals were extended by the Taxpayer Certainty and Disaster Tax Relief Act.
The Bachelor and Taxes: A One-on-One Date
Can the new Bachelor (and pilot) Peter Weber deduct expenses related to two-on-one dates? Can he claim Chris Harrison as a dependent? Hint: It's a no on both.
Retirement rules for savers change significantly under SECURE Act
The SECURE Act modifies the rules for retirement plan participants and employer-sponsors starting in tax year 2020. Learn how these changes impact certain taxpayers.
Congress provides relief for 2018 and 2019 disasters
New law provides relief with certain tax benefits for taxpayers affected by 2018 and 2019 disasters.
Ancillary personal property and like-kind exchanges
The TCJA altered the types of property that qualify as like-kind property. Personal and intangible property used in business no longer qualifies for like-kind exchanges completed after Dec. 31, 2017.
QOTW: Contributions to SEP-IRA and traditional IRA
A self-employed taxpayer contributed $5,000 each to a SEP-IRA and a traditional IRA. Is either contribution limited by the other?
Paid family and medical leave credit for employers
Qualifying employers can benefit by claiming a credit for paid family and medical leave in 2018 and 2019. A new IRS fact sheet summarizes the requirements.
Transitional relief for ACA health coverage reporting
Large employers and health insurance issuers must furnish ACA health coverage forms 1095-B and 1095-C to individuals by Mar. 2, 2020 the extended due date.
QOTW: Claiming a child who no longer lives with them?
Question of the Week: An absent child who moves out may still be a qualifying relative if all of the qualifications, including the support test, are met.
Updated QBI FAQs rental real estate
Learn more about the IRS’ expanded QBI FAQs with additional guidance on the safe harbor requirements mean for rental real estate owners.
Taxes and working remotely
Employees working remotely could face issues with their taxes, including double state tax on wages depending on their state of residence and location of their employer.
QOTW: Donating groceries to food bank
Taxpayers who donate groceries can deduct the donation if made directly to a qualified organization, but generally not if donating at checkout.
Standard mileage guidance updated
Updated standard mileage guidance reflects TCJA changes like the suspension of employee business expenses and the moving expense deduction for most employees
QOTW: Preserve refund when one spouse owes child support?
Question of the Week: Can a spouse file a tax return to preserve a share of a refund that would otherwise go to pay the other spouse’s back child support?
Tax Court: No deductions for marijuana business
The Tax Court upheld the IRS’s denial of all deductions for a medical marijuana business--federal deductions aren’t allowed for marijuana businesses.
Innocent spouse relief and IRS collections
In these four situations, taxpayers facing IRS collection activity can claim innocent spouse relief.
Taxes and flipping houses as a business
Flipping houses as a business has significant tax implications.
TAX in the News
The Tax Institute proudly presents TAX in the News, your source for tax law updates, court cases, and news for tax practitioners.
How to protect one spouse’s share of a joint tax refund when the IRS can take it
The spouse who doesn’t owe a debt may be able to claim his or her share of the tax refund using an injured spouse claim.
Earnings tax survey of local tax systems
Seventeen states and D.C. allow cities, counties, schools, and other municipal entities to levy local earnings tax on individual wages and business income.
When the IRS says taxpayers owe money
What are the options when taxpayers owe the IRS money? Offers in compromise, installment agreements, and changing to uncollectible status could help.
Rental property and the qualified business income deduction
Some rental property owners can claim a qualified business income deduction for their rental property. Find out how to determine when rental income is qualified business income.
Back to basics: Classifying workers as independent contractors or employees can be tricky
How do taxpayers know if they’re self-employed? Often, it comes down to employee versus independent contractor classification.
Putting a Cap Back on the SALT Deduction
The IRS caps state-level SALT deduction limitation workarounds involving charitable donations in exchange for state tax credits.
Back to basics: Family and dependent tax rules, Part One
How the Tax Cuts and Jobs Act made the rules for family and child tax benefits and credits (even more) challenging.
Tax: The Final Frontier? Foreign earned income exclusion and space travel
Astronauts, taxes, and the foreign earned income exclusion—why NASA space travel doesn’t exempt taxpayers from U.S. taxes
Qualified opportunity funds provide investors long-term tax benefits
Investors consider long-term investments in qualified opportunity funds because of their potential tax benefits: gain deferral and exclusion.
Tax benefits of tidying up: Noncash charitable contributions
Based on Marie Kondo’s decluttering method and Netflix show, people are donating their belongings, but how does donating noncash items save money on taxes?
When is a state refund taxable? The TCJA raises some questions.
State tax refunds can be fully or partially taxable, or not at all. The introduction of the $10,000 SALT deduction limit can affect the results.
Back to basics: U.S. taxes for international students
Learn more about the tax rules for international nonresident students on different visas.
Tales from the Tax Court: The Wayfair decision changes the standard for sales tax on remote sellers
States now have Supreme Court guidance on when they can require sellers to collect sales tax on internet sales.
Back to basics: Education tax benefits help taxpayers pay for college
Tax benefits for students can help families pay and save for college.
Education benefits & tax reform: What’s changed, what hasn’t, and what we don’t know yet
The TCJA changed some of the rules for education tax benefits.
Back to basics: The effects of federal tax changes on state law
How states respond to federal tax law changes depends on several factors
Spoiler alert: Television families demonstrate complex tax situations
How would the fictional families of Modern Family file returns?
Back to basics: Tax for families caring for aging parents
The tax effects of caring for family vary depending on the situation
Tales from the Tax Court: An Ohio sales tax curveball
A recent decision by the Ohio Supreme Court demonstrates how bobblehead dolls led to a pickle of a court case.
The Gift of Knowledge: Tax implications of giving through 529 plans (qualified tuition plans)
Funding a child’s qualified tuition plan for holidays and birthdays can have tax effects
TAX in the News: Qualified Business Income Deduction Digest
All parts of the TAX in the News series on the §199A qualified business income (QBI) deduction.
Revisiting the de minimis safe harbor tangible property regulations
The de minimis safe harbor election allows businesses to expense items which are usually depreciated.
Partnerships, Part III: Partnership Audit Procedures
The Bipartisan Budget Act of 2015 changed partnership audit procedures in several ways.
Tales from the Tax Court: What is reasonable compensation for S corporation employee-shareholders?
“Reasonable compensation” doesn’t always mean what you think it means
Employees and the self-employed – a comparison under the Tax Cuts and Jobs Act
Employees should weigh the pros and cons of self-employment under the Tax Cuts and Jobs Act, which made favorable tax changes for businesses.
Partnerships, Part II: How the TCJA changed the net operating loss deduction
The 2017 Tax Cuts and Jobs Act made several changes to the net operating loss deduction
Breaking down the TCJA: The future of personal casualty losses
The TCJA suspended personal casualty and theft losses, except in federally declared disaster areas
Parents of K-12 students face state-tax uncertainties under new 529 plan rules
Not all states have decided how they’ll treat K-12 distributions from education savings plans after tax reform changed federal rules
What happens beyond full retirement age
Many people wait until “full retirement age” or later to start getting Social Security benefits. Here are some points to consider – Social Security, health benefits, taxes – to help with their decision-making.
Tales from the Tax Court: You can’t do that. ‘Frivolous’ tax arguments won’t stand up to IRS scrutiny
Most of these creative arguments are dispelled by a single IRS publication you may not know existed
Partnerships, Part I: Carried interest and the loophole
How carried interest works -- and the rules before and after the 2017 Tax Cuts and Jobs Act
Tails from the Tax Court: Horse racing and breeding as a business? The IRS says “Whoa, there!”
Deducting losses for horse-related activities can be a divisive topic
How to help taxpayers displaced by Hurricane Maria
Many Puerto Ricans were temporarily or permanently displaced by Hurrican Maria. Here are the tax implications.
When businesses don’t make federal tax deposits, the IRS will look for ‘responsible persons’
Taxpayers should never use withheld payroll taxes for other reasons. Here’s why.
Tales from the Tax Court: Artwork value is in the eye of the beholder – and the IRS
Owners of artwork should be prepared to prove the value of their pieces before reporting sales and other transfers on their tax returns
Post-death tax planning for the unprepared, Part 3: Who reports post-death income, and for how long?
The personal representative must make determinations and take action on assets before terminating the estate
Health savings accounts win the triple crown of tax benefits
Some investment experts say an HSA can help supplement retirement income, too
Like-kind exchanges and how they work
Follow four rules to make sure that taxable gains are deferred in like-kind exchanges.
The best time for tax check-ups – and why they matter
Tax pros can help clients make changes before the end of the year to avoid underwithholding and underpayment penalties
Debunked: Four myths about retirement plans and foreign workers
Workers who temporarily live in the U.S. will owe U.S. taxes when they transfer their retirement funds between foreign and domestic plans
Estates of the rich and famous
A look at David Bowie and Prince -- and the lessons we can all learn about estate planning
The most common business entity changes and why people make them: Sole proprietorship to LLC
The choice of business entity is not a ‘set it and forget it’ proposition
Post-death tax planning for the unprepared, Part 2: What are the personal representative’s responsibilities?
Tax filing requirements continue after a taxpayer’s death, and it’s the personal representative’s job to make sure those requirements are met.
How to distribute the wealth during retirement
Considerations for individuals with different sources of retirement income
Back to basics: How to understand the differences among tax statutes, regulations, and other official guidance
Making sense of the U.S. Tax Code can be a challenge without a full understanding of these resources
Tales from the Tax Court: Tax Court opinions and how to make sense of them
Tax Court decisions help taxpayers and tax professionals shed light on complicated issues
Debts that make tax refunds disappear
The government takes refunds to collect five types of debt. Here’s how it happens.
Donor-advised funds: What are they and why are they growing?
Taxpayers get immediate tax deductions for giving cash or property to charities using donor advised funds
Share and share alike: When employees get part ownership in a company, they take the bad with the good
Owners don’t always understand what happens when they make employees into partners
Why clergy returns can get complicated
Completing a return for a “minister of the gospel” can be a mess of biblical proportions without a full understanding of how these special taxpayers are treated
Stolen identity refund fraud may be down, but it’s not out
States are getting creative in the fight against stolen identity refund fraud
Back to basics: Tried and true tax savings represent an opportunity for millennials
It doesn’t take advanced tax planning to combine commonly available tax savings to reduce effective tax rates
Taxing the gig economy, Part 4: Artists, musicians, and makers who cross borders should be proactive to avoid major tax pitfalls
Multistate and international tax rules could apply to movers and shakers in the gig economy
The trouble with PTPs: These attractive investments can lead to major tax headaches
Get a basic understanding of publicly traded partnerships, and how to spot and plan for potential tax traps
Settlements and court judgments: taxable or not?
How the IRS taxes three types of damage awards, and how to proactively mitigate the tax consequences
Getting multiple Forms 1095 for health insurance isn’t always cause for concern
Taxpayers can receive combinations of A, B, and C versions of the Form 1095. Here are some common scenarios.
Taxing the gig economy, Part 3: The unintended consequences of being a small business
More tax responsibilities and potentially more IRS problems
Taxing the gig economy, Part 2: Nontraditional home rentals aren’t always a perfect fit with the tax law
Defining a rental for tax purposes can be difficult – potentially involving rules for small business, vacation homes, and passive activity losses
Certifying Acceptance Agents can help taxpayers apply for ITINs and keep their original documents
CAAs can attest to taxpayers’ documents and identities, help navigate the application process, and address any IRS issues resulting from the application
When taxpayers see a side hustle, the IRS may see a hobby
The difference matters, because the tax bill can be substantial. Here are the nine factors the IRS uses to determine whether a business is really a hobby.
Here come the private tax debt collectors … again
Seven things taxpayers and their advisors need to know about the IRS private debt collector program
Income generated from virtual worlds is still taxable in the real world
People who make money on Pokemon Go! or other virtual games might catch a tax bill with the IRS
Deferred compensation for athletes and high earners can be a financial win-win
It’s important to consider federal and state tax implications on payments that could stretch well into the future
Timing is everything: The date taxpayers get an SSN or ITIN now affects whether they’re eligible for refundable tax credits
Learn what happens when taxpayers don’t receive their tax identification numbers quickly, or when they switch to an SSN
Form 1099-B: The basis is probably wrong for employees who exercised nonqualified stock options
Most of the time, employees will need to adjust their reported basis to avoid being taxed twice on nonqualified stock options
Look no further: Tax-reduction opportunities start with the return
A mid-year review can reveal countless opportunities for all types of taxpayers and their advisors to plan ahead for next year
Those giving up U.S. citizenship shouldn’t forget tax obligations
There are essential tax rules that covered expatriates and their advisors need to know to stay in compliance before, during, and after an individual exits the U.S.
Annuities are popular, varied – and complicated when it comes to taxes
Determining tax treatment for annuities doesn’t have to be a mystery. Here’s a guide.
When divorce decrees and federal tax law aren’t on the same page, taxpayers can lose dependent benefits
A cautionary tale about how one taxpayer was – and wasn’t – following all the rules
The adoption tax credit – What’s the catch?
There are three “catches” with the adoption credit: timing, qualifying, and post-filing activity.
Surfing the SIRF: States are taking measures to keep taxpayers’ refunds afloat in a sea of identity theft
With Stolen Identity Refund Fraud on the rise, states are taking new approaches to help taxpayers stay ahead of the break or recover from a refund wipeout
The ABCs of ACA, Part 2: Forms 1095-B and -C will help taxpayers spell out their insurance coverage
Part 2 of this series explains two forms 1095-B and 1095-C
The ABCs of ACA, Part 1: Form 1095-A will help taxpayers spell out their insurance coverage
Part 1 of this series outlines why the Form 1095-A is important for many taxpayers