Bankruptcy creditors can’t grab a debtor’s individual retirement annuity. In a divorce, a woman was granted 50% of her husband’s retirement accounts, and her half was directly transferred tax-free into her 401(k) and 403(b) accounts. She subsequently used money from those two accounts to purchase the annuity in a direct trustee-to-trustee transfer and later filed […]
401k, 403(b), Bankruptcy, Divorce, Internal Revenue Service, IRA, IRS, Northside Tax Service, TallyTaxMan, Tax CourtA reminder about the home-sale gain exclusion for those in nursing homes. Taxpayers who have owned and used a home as their principal residence for at least two of the five years leading up to the sale can exclude up to $250,000 ($500,000 if married) of the gain when they sell. However, the rules are […]
Capital Gains, Homebuyer Tax Credit, Income Tax Planning, New Tax Laws, Northside Tax Service, TallyTaxManC corporations with retained profits that switch to S status must be careful. Too much passive income can draw a 35% tax. If over 25% of gross receipts is received from passive sources… interest, dividends, and any rents and royalties that aren’t derived from an active business…the company owes a 35% tax on the excess. […]
IRS Small Business, Northside Tax Service, S Corporation, Small Business, Small Business Tax, TallyTaxManHere are some useful tips for individuals who get an audit notice from IRS. Don’t panic. Most exams nowadays are done by mail-in correspondence focusing on one or two narrowly defined items on your return. The letter will ask that you mail in the records or other justification for the item in question. The process […]
IRS, IRS Audit, IRS Help, IRS Letters, Northside Tax Service, TallyTaxMan, tax auditsMixed news for IRS on its budget: It will get $320 million for the new tax law. We’ve said before that IRS has a big job ahead to implement all of the changes in the legislation. The Service will use the funds to reprogram its computer systems, update hundreds of forms and publications, educate taxpayers […]
IRS, IRS requirements, Northside Tax Service, TallyTaxMan, tax changesRetaining too much control over a company costs an inventor a tax benefit. Royalties he got from patent transfers don’t qualify for capital gains treatment. Inventors who sell to an unrelated person their entire interest in a patent they created before commercial use of it begins, can treat the proceeds as long-term capital gains. A […]
capital gains treatment, company control, minority interest, Patents, Royalties, Shareholders
Some popular deductions for fringes are also scrapped or limited. The write-off that employers take for the cost of transportation-related fringe benefits, such as parking, mass transit passes and even bicycle commuting, is disallowed. Employees can still use pretax money for parking and transit passes, but not biking. Meals in on-premises dining facilities such as […]
Fringe deductions, Paid Family or Medical Leave Credit, reinvested profits