By month: May 2019

IRS FAQs on Section 199A: Nasty? Helpful? Wrong?

On April 11, likely after you filed your tax return, the IRS updated its Section 199A frequently asked questions (FAQs) by increasing the number of questions and answers from 12 to 33. We noted three of the FAQs that will cause problems for many taxpayers. In fact, there will be taxpayers who will need to file amended tax returns because of the FAQs.

How to Handle Multiple Rental Activities and the 199A Deduction

Applying the Section 199A deduction to your rental activity isn’t easy. If you’ve got multiple rental activities, it’s more complex with additional complications. Don’t worry, though—we’ll go step by step through the considerations so that you know you’ve got all your bases covered.

Q&A: Simple Recap of TCJA Articles

In this article, you see three easy ways to find the Tax Cuts and Jobs Act (TCJA) articles that we have written: (1) use the resource guide to find the articles by topic with short summaries of the prior and new laws; (2) use the Browse by Topic function; or (3) use the search engine.

Q&A: Deduct Your Costs of Sponsoring Sports Teams

What does it take to deduct the costs of sponsoring a sports team? What if you play on the team? Could you pay for the team travel expenses? This article answers the sports team sponsorship tax deduction questions for you.

Uncertain of a New TCJA rule? Do This to Avoid Penalties

Tax reform gave you hundreds of new tax law provisions and, in some cases, only basic guidance. What if you see a provision where you can benefit, but you are not certain you fit the profile for the deduction? You don’t want to claim the deduction, lose it to the IRS, and then pay big penalties. As we explain in this article, you have two options for handling the situation.

TCJA Allows Bonus Depreciation on Purchase of Leased Vehicle

Good news, bad news! Bad news: as in prior years, buying the vehicle you lease destroys any opportunity to claim Section 179 expensing. Good news: the TCJA added two new provisions that now allow you to claim bonus depreciation on the purchase of a vehicle that you lease.

Fraud by Tax Preparer Creates Big Trouble for Client

In this precedent-setting case, the Tax Court had to decide for the first time whether a tax preparer’s fraud extends the statute of limitations for the IRS audit of the client’s return even when there is no charge of fraud against the client. Because this court ruled against the taxpaying client, according to precedent, a tax preparer’s fraud now extends a client’s allowable audit period from three years to forever.

Taxpayer Saved 15 Hours of Paperwork, Lost $35,000 to the IRS

How much per hour do you collect in tax savings when you keep the right tax records? We don’t know for sure, but it’s a lot of money. We estimate that with the right records, the taxpayer in this court case would have earned about $2,333 an hour. And the thing is, the records this taxpayer needed in this case are very easy to keep.

Roth IRA After TCJA: The Backdoor Is Still Open

The Roth IRA is an excellent way to grow your retirement savings, but the ability to make contributions to a Roth is phased out beyond certain income limits. A backdoor Roth allows you to make an end run around the limits.


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