Category Archives: Tax Facts & Tips

Bigger Income This Year? Call Me!

If you expect a jump in your income, we need to talk.  Have you sold stock or property?  Getting a big bonus (larger than in the past)? Had an unexpected windfall?  I’ve used the word “jump” because if your income is usually high, we both know the numbers, and I make a point of keeping you up on the numbers.  If, on the other hand, your numbers suddenly increase (larger than I normally see) then please let me know.  Continue reading →

Tips to Start Planning Next Year’s Tax Return

IRS Tax Tip 2013-62, April 24, 2013

For most taxpayers, the tax deadline has passed. But planning for next year can start now. The IRS reminds taxpayers that being organized and planning ahead can save time and money in 2014. Here are six things you can do now to make next April 15 easier. Continue reading →

IRS Narrows Options for Bad Debts Being Worthless

Are there conditions that you must meet before you can claim a bad debt?  Of course! 

Just because you believe you are unable to recover a debt, you must be absolutely certain there is no prospect of recovery. And even then, the loss may be disallowed. The courts will look at the level of collection effort that was made by the creditor, and if there is even a remote possibility that the debt can be collected on.

So how do you determine if a debt is worthless?   Continue reading →

Is the Home Office Tax Deduction a “Red Flag” for an IRS Audit?

The Bradford Tax Institute conducted a polling question during a continuing education webinar for CPAs and enrolled agents (EAs) last October.  The attendees had to answer it in order to prove attendance.

The question was “Do this: Think of yourself and how many clients you have who have claimed the home-office deduction for each of the last three years.  Now with that number of clients in mind, what percentage have been audited by the IRS in the last three years?”

  • No audits at all – 73 percent
  • Fewer than 5 percent audited – 22 percent
  • Five to 10 percent – 5 percent

Conclusion: There is no premise that declaring a home-office tax deduction triggers a red flag with the IRS.  In fact, the numbers show just the opposite. And, since the IRS hasn’t published its list of “flag” colors – for audits or otherwise, it seems they remain a secret.

 

Six Facts on Tax Refunds and Offsets

IRS Tax Tip 2013-60, April 22, 2013

Certain financial debts from your past may affect your current federal tax refund. The law allows the use of part or all of your federal tax refund to pay other federal or state debts that you owe.

Here are six facts from the IRS that you should know about tax refund ‘offsets’. Continue reading →