Article Highlights: Hobby Losses Not-for-Profit Rules Determining Factors Trade or Business Presumption Hobby Tax Reporting Self-Employment Tax Generally, when individuals have a hobby, they have it because they enjoy it and are not involved in their hobby with the goal of making money. In fact, most hobbies never make money or don’t even create any…

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Article Highlights: Purpose of the Earned Income Tax Credit Qualifications Earned Income Qualified Child Credit Phaseout Computing the Credit Investment Income Limit Combat Pay Election Fraud Safeguards Any discussion of the earned income tax credit (EITC) needs to begin with a discussion of why Congress created it in the first place. It has a twofold…

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Article Highlights: Daycare Providers Simplified Food Deduction Special Rules for Business Use of the Provider’s Home Home Sale Consequences Other Expenses Other Daycare Provider Issues Daycare User Credit Employer Dependent Care Benefits Other Credit Criteria When discussing daycare for children so their parents can work, there are two primary areas of discussion: one from the…

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Article Highlights: Excess IRA Contributions Excess Contribution Penalty Correcting Excess IRA Contributions Applying the Excess to a Future Year Excess 401(k) Contributions Failing to Timely Correct 401(k) Excess Contributions Some individuals financially struggle just to be able to make a nominal contribution to their tax-favored retirement plan, whether it be an IRA, 401(k) plan, or…

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Nobody likes getting mail from the IRS — especially when it’s something you weren’t expecting. One minute, you’re minding your own business and aren’t even thinking about that return you filed months ago. The next minute you open your mailbox and see something called a “Notice of Deficiency” — and your anxiety immediately goes through…

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Article Highlights: Watch Out for Charity Scams Tax Exempt Organization Search Tool Tax Benefits of Charitable Contributions Bunching Deductions Qualified Charitable Distributions Substantiation As the end of the year and the holiday season approach, we will all see an uptick in the number of charitable solicitations arriving in our mailboxes and by email. Since some…

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Tax problems aren’t just a worry that hang over people’s heads from January through April every year. Many of them go far beyond the numbers that you report, and they can require additional evidence that your bank statements and paychecks can’t provide. Additionally, the IRS isn’t the only source of those problems: state tax authorities…

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Article Highlights: 20% Sec. 199A Pass-through Deduction Specified Service Business Limitations Taxable Income Limitations Wage Limitations Benefits of Being Organized as an S Corporation Taxpayers with higher 1040 taxable incomes who are self-employed but are not “specified service businesses” may find it beneficial to structure new businesses, or restructure an existing business, as an S…

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Article Highlights: Concerns About Proper Withholding Late IRS W-4 and Withholding Tables New W-4 Complications Self-employed Estimated Payments Events That Can Impact Taxes Taxes are similar to vehicles, in that they sometimes need a check-up to make sure they are performing as expected. That is especially true for 2018, with all of the changes brought…

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Article Highlights: The general statute: 3 years Longer durations in some states Fraud, failure to file and other issues that extend the statute’s duration Keeping the actual return Ordering copies of previously filed returns This is a common question: How long must taxpayers keep copies of their tax returns and supporting documents? Generally, taxpayers should…

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