Itemized or Standard Deduction?

The IRS statistics show that most taxpayers use the standard deduction. However, you may be able to reduce your tax bill if you itemize on Schedule A. What expenses are deductible on Schedule A? I think most people are familiar with the typical itemized deductions, which requires a Schedule A to be filed. Home mortgage[…]

2016 Automobile Mileage Rates

The IRS released the 2016 standard mileage rates for business, medical and moving in December. The rates have decreased from 2015, probably due to the decrease in the cost of gasoline.  Effective January 1, 2016, the standard mileage rates for the use of an automobile are as follows: 54 cents per mile for business miles[…]

Tax Deductible Expenses

I’m often asked if a particular expense is tax deductible.  Everyone is looking for a deduction!  In general, only expenses incurred in a trade or business (IRC §162) or those incurred in the production of income (IRC §212), will be deductible on an individual tax return. I once had someone ask me if a new[…]

Income Received For Serving as a Host Family

Question:  Are stipends taxable income for Federal income tax purposes?  The taxpayer has been serving as a host family for a foreign exchange student and has received monthly payments during 2014.  Should this income be taxable to the host family? There is not a specific exclusion for these payments under the Internal Revenue Code. Since[…]

Installment Agreements for Payroll Taxes

If your small business is delinquent on payroll taxes and having problems catching up, you may qualify for an In-Business Trust Fund Express Installment Agreement (IBTF-Express IA).  If you owe $25,000 or less you can have up to 2 years to pay your payroll taxes to the IRS. The criteria to qualify for an IBTF-Express[…]

Per Diem Rates for Fiscal Year 2015

The IRS has released the per diem rates taxpayers can use to reimburse employees for expenses incurred during travel after September 30, 2014. The low-cost area per diem increases from $170 to $172 and the high-cost area per diem increases from $251 to $259.  Important to note, only employees are able to use per diem[…]

Self-employed Taxpayers Who Owe Taxes

In my practice, I have frequently served self-employed clients who have not made ANY estimated tax payments or who have not made sufficiently large estimated tax payments throughout the year and are faced with a large tax liability on April 15. Making timely and sufficient estimated tax payments requires self-control.  Estimated tax payments for individual[…]

Changes in Estate Planning

The IRS recently reported the number of estate tax returns filed declined 87% from about 73,100 filed for decedents dying in 2003 to about 9,400 filed for decedents dying in 2012.  This is due to the fact the gross estate filing threshold increased from $1 million in 2003 to $5.12 million in 2012.  This shrinkage[…]

Taxpayer Bill of Rights

Earlier this month, the IRS published the Taxpayer Bill of Rights and included the provisions in IRS Publication 1. Publication 1 is a document that is routinely included in IRS correspondence with taxpayers. These rights have always been available to taxpayers; however, they are scattered among the 75,000- page tax code and are not readily[…]