TaxAudit Blog

Category: Is it Deductible?

Tax Deduction written on a sticky-note

Tax deductions and credits serve the same purpose − to reduce the amount of a taxpayer's tax owed. The way that each serves this purpose is different.

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boy selling lemonade

Yes, kids may have to pay taxes. No matter a person's age, if they have income that exceed certain IRS thresholds, the income should be reported.

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401k nest egg

401k loans aren't reported on your federal tax return unless you default on them. Then it becomes a distribution and subject to the rules of early withdrawal.

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1040 tax return with handcuffs laying on top

Inmates are responsible for filing taxes. While you can certainly help your boyfriend file his taxes, you can’t sign and submit the return on his behalf.

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Top half of a clock drawn on a chalkboard with the word 'TAX' written above it.

The IRS’s  “Where’s My Refund” app should be your first your first destination to find out the status of your refund.

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Gift box wrapped in a five dollar bill with a red ribbon and bow on top

A bonus is considered a supplemental wage payment and is therefore subject to slightly different withholding guidelines under federal rules.  

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Boy standing in front of chalkboard with a finger on his chin

The first thing to do is to check every name and Social Security number listed on the return with what is listed on their Social Security cards.

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Money being handed over

While increasing allowances leaves you with more available funds throughout the year, it will have a rippling effect and your tax refund will decrease.

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Internal Revenue Service sign next to traffic light

Returns are being processed, and refunds are being issued. Things seem back to normal.

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Woman at desk with head down on tax forms, holding a pencil and calculator.

Below is a list of misconceptions and examples of misinformation taxpayers may encounter during the upcoming tax season.

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Graduation Hats

For the American Opportunity Credit, a student is required to be in pursuit of a degree or recognized education credential and be enrolled at least half-time

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Woman on the phone holding nephew

When more than one person wants to claim a child on their tax return, sorting it out becomes complicated. Not only are there five tests to meet for a child...

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Colorful balls with numbers

Lottery earnings are generally reported on Form W-2G, taxed as ordinary income, and expected to be reported as “other income” on the federal tax return.

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Person receiving fast food

The IRS is currently offering this cash payment alternative at participating 7-Eleven stores in 34 states.

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Woman in white hat in a swimming pool

If my ex-wife lives with me and I provided more than half of her financial support will I be considered single status or head of household? 

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Mom blowing bubbles with daughter on a couch

I’m legally married and live with my spouse. We file our taxes separately.Can I file as head of household while he files as married filing separately...

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Woman in white sweater

I have a question about a head of household. My ex-husband passed away, which left his mother needing someone to care for her. I took her into my home…

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Pencil on Monthly Expense Guidelines paper

There are only two months left in the year. What can I do now to avoid paying a big tax liablity on my Schedule C business next year?

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hot cup of coffee

Starbucks? Coffee beans? Lattes? What do they have to do with taxes? Don’t worry, we will get to that! But first, let’s discuss your Golden Years again...

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businessman in wheelchair

Are disability payments taxable? This is a good question, but there is no correct general yes or no answer. The taxability of disability payments depends on...

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1040 Pie Chart

To increase the business offerings at my mailbox rental business, I became a Notary Public this year. So far I made about $1,000 from my notary service.

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Old orange truck

What is the best option are for getting rid of an old vehicle? Should I donate it for the auto valuation guide value of $ 3,000 or sell it now for $1,500? 

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young toddler girl in a swing

What do I do with a stepdaughter who doesn't live with us? She is in college and lives with her mom. How do I list that? My husband pays child support.

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woman on the phone holding baby

I am a policy and procedure writer for a company. Due to my long commute, my boss lets me work from home one day a week. Can I write off my home office?

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Calculator that says Tax Help? on top of 1040 tax forms

How long does it take to get my refund if I e-filed my taxes? It seems like I should have received it by now.

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keyboard that says Crowd Funding

Crowdfunding is a popular way to raise funds for businesses, charities and individuals. It occurs when someone asks others to contribute to their idea or cause.

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speedometer

I do not a get car allowance for my job in media sales. I do not log a report of my driving but typically I average 20k miles a year due to all the driving...

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W-2 Wage Statement

 filed my tax return, and then a W-2 came in the mail for a job I worked earlier this year that I had forgotten about. How do I file this? 

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three bars of gold

I am considering buying Gold Bullion. I am 68 and do not plan on using an IRA of any kind for this. What are the tax implications of buying gold?

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Woman looking at receipts with calculator and 1040 tax forms on desk

Is there a threshold as to when a married couple filing jointly would fall under the AMT? There is not a threshold, per se. AMT, or Alternative Minimum Tax...

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Gift wrapped in five dollar bill

I’ve never been married and I have no children. I’ve been successful in my career and have some money saved. I want to give my six nieces and nephews $20,000

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Block with Tax words on it

My husband passed in February of this 2104. We have always filed a joint return. What do I need to do this year?

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Student desk with books and apple on it

I have a daughter who is eligible for the American Opportunity Tax Credit of $2,500.00. Can she also use the Lifetime Educational Tax Credit of $4,000.00?

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Ocean

We have an off-shore account, set up in 1998 when they weren't reportable. But now under the Foreign Account Tax Compliance Act, the accounts are reportable.

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Little boy blowing bubbles

I took care of my three nieces and a nephew (all under 17 years of age) up until the end of last month, August 28, 2014, to be exact. I claimed these kids...

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Blender

Uncle Sam expects to see that Fair Market Value (FMV) listed on your tax return for that tax year as income.

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House on top of stack of money

If I'm going to do home repairs, such as a roof and heating, which will cost about $15,000, would it be better to take out a home equity loan to pay for it or..

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Dictionary with the focus on the word Taxpayer

If you made an mistake on your taxes or omitted required information, such as a late-received W-2 or K-1, you can file an amended return on Form 1040X.

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3 Armed Forces Members

If you are a member of the U.S. Armed Forces, there are tax breaks written just for you. Merchant Mariners and American Red Cross employees do not qualify...

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Ocean

We have been asked to build some basic boxes to be used as a stage for a company. They plan to pay us but are not placing us on their payroll as employees.

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Man with ball and chain attached to leg

Tired of feeling like the government is taking your last penny? Having trouble making ends meet? There is a solution – provided you are willing to move.

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Dictionary with the focus on the word Taxpayer

For several years, National Taxpayer Advocate Nina Olson has been arguing for the simplification and codification of taxpayer rights and responsibilities.

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Divided wedding cake with groom on one side and the bride on the other

Taxpayers who must pay alimony to a former spouse may deduct it from his/her tax return as an adjustment to income.

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Rolled up receipt

If you have a dedicated credit card for your business, can you use the statement as the receipt for your business entertainment, meals, travel, etc.?

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Basketball resting on a Basketball Court

While we call it the “Jock Tax,” it really is a tax that does affect a variety of people, but we are focusing on the NBA because of the extensive travel habits.

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The word TAX spelled out with tiles on paper money and next to a stack of coins

I hate allowing the government an interest free loan. This year I had a penalty for owing too much at the end of the year. So my question is: how…

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Handcuffs laying on a 1040 form

My son was arrested in December of 2012 and spent the entire year of 2013 in jail awaiting trial. During that year I paid his attorney fees, car payments...

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Clock pointing the time hands towards the word TAX

You got your return filed on time and you’ve got a nice big refund coming. But the funds don’t show up in your bank account when you expected them to. Now what?

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Woman blowing bubbles on couch with child

My two children live with my ex. He is the custodial parent but we have joint custody. I pay child support and they come over to my house almost every weekend.

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Woman blowing bubbles on couch with child

Household employers: Did you hire someone to care for your children in your home? Do you have a gardener, a handyman, or a chauffeur?

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Family in swimming pool on a raft

I lived with my younger cousins, ages 11 and 4, in 2013 except for about 2 months when I stayed with my father while he was sick. I provided more than...

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Hand holding stack of 100 dollar bills giving it to another hand

In order to qualify for an Earned Income Tax Credit (EITC) of up to $6,044, you must first meet these two qualifications: You must have earned income...

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Gold Record

I’m sure you remember when Susan Boyle became an overnight web sensation. Since then, thousands of hopeful musicians, writers, artists, and dancers...

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1040EZ

Taxes! Usually, this word creates a strong emotive reaction. We older people tend to not remember the days back when we first filed our very first 1040 EZ.

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This blog does not provide legal, financial, accounting, or tax advice. The content on this blog is “as is” and carries no warranties. TaxAudit does not warrant or guarantee the accuracy, reliability, and completeness of the content of this blog. Content may become out of date as tax laws change. TaxAudit may, but has no obligation to monitor or respond to comments.