Author Archives: AFS Taxsavers

FEB
9

Summary of Tax Extenders Agreement

Posted by AFS Taxsavers in Tax Tips

DIVISION D – REVENUE MEASURES TITLE I – EXTENSION OF EXPIRING PROVISIONS Subtitle A – Tax Relief for Families and Individuals Section 40201. Extension and modification of exclusion from gross income of discharge of qualified principal residence indebtedness. The provision extends through 2017 the exclusion from gross income of a discharge of qualified principal residence […]

AUG
22

Horse-Racing Activity

Taxpayer fails to show profit motive Jerald worked full-time at Turbine Traders Ltd. as a marketing and sales representative. His main job was selling parts and services for helicopter engines. He earned $132,000 a year in wages. Jerald has owned interests in and has raced horses for more than 20 years. He purchased his first […]

JUL
23

Overtime Option

New overtime option? Under a new bill proposed in the House, employers can offer to reward employees with extra time off in lieu of receiving pay at the usual time-and-a-half overtime rate. The choice would be voluntary. Any unused compensatory time at the end of a year would be converted to overtime pay. www.SmallBizTax.net Small […]

JUL
22

S Corp Alert

Posted by AFS Taxsavers in Business

S corporation owners can only deduct losses up to the amount of their basis in the shares. But some business owners ignore this limit, much to the chagrin of the IRS. Now the tax collection agency’s Large Business and International Division is ramping up audits in this area. Its agents will contact shareholders to ensure […]

JUL
7

Face Tax Reality for Fantasy Sports

Posted by AFS Taxsavers in Individual

Fantasy sports is sweeping the nation. It can range from casual leagues just for fun to heavy betting for high stakes. Strategy: Learn the tax consequences. If you don’t, you could land in hot water with the IRS. Although the tax law is still evolving, fantasy sports is generally treated as a form of gambling […]

APR
22

Silence is Golden

Posted by AFS Taxsavers in General

Did the IRS just signal the end of Obamacare? Under the Affordable Care Act (ACA), supported by President Obama, the agency would reject tax returns if taxpayers indicated that they didn’t have qualified health insurance, unless they were exempted. If Line 61 of Form 1040 was left silent, the return was to be rejected. The […]

APR
22

Strategies for Avoiding CP2000 Notices

Posted by AFS Taxsavers in General

Here’s what happens. The IRS Automated Underreporter Unit (AUR) matches income reported on individual tax returns with the income that is reported to the IRS from various third parties (e.g., employers, financial institutions, and banks) and recorded in its wage and income transcript file. If there is a difference, the IRS “flags” the tax return […]

APR
20

Tax Strings on State Tax Refund

  Question: My accountant says my state income tax refund from last year is taxable. Is this possible? H.C., Middlesex, N.J. Answer: Yes. If you claimed state income taxes as an itemized deduction on Schedule A of your 2015 Form 1040, any refund you received in 2016 from the state counts as taxable income on […]

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