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Around the Tax World – July 9, 2024
In The Headlines - Over 100,000 Americans lost access to their own funds due to the bankruptcy of banking-as-a-service platform Synapse.
What's New In The Tax World? - The IRS releases its final tax reporting rules for cryptocurrency
State-By-State Updates - Could rundown properties be subject to extra taxes in Georgia?
Tax Planning Tips - Will Biden’s corporate tax proposals make the cut?
READ MOREAround the Tax World – February 22, 2024
In The Headlines - Who will win in the battle between The New York Times and OpenAI?
What's New In The Tax World? - The popular EV tax credit has yielded $135 million in reimbursements for automotive dealers this year.
State-By-State Updates -California considers a ballot initiative that would limit local and state governments’ ability to raise taxes.
Tax Planning Tips - If you have long-term care insurance, keep in mind these tax deduction limitations.
Around the Tax World – February 8, 2024
In The Headlines - Super Bowl LVIII means record-breaking ticket prices for football fans and revenue spikes for Las Vegas small businesses.
What's New In The Tax World? - To file or not to file? With new proposed tax breaks coming up fast, the IRS urges taxpayers to move ahead with their tax returns
State-By-State Updates -A Connecticut task force tries to bid farewell to the state’s car tax.
Tax Planning Tips - With TJCA tax provisions soon to expire, 2024 will be a crucial year for tax planning.
Around the Tax World – January 25, 2024
In The Headlines - Spirit Airlines and JetBlue may be star-crossed business partners.
What's New In The Tax World? - 2024 may be the Year of the Tax Break—from the expanded child tax credit to business benefits
State-By-State Updates -The Kansas Legislature is stepping on the gas when it comes to income and sales tax reform.
Tax Planning Tips - The latest industry boom is in selling energy tax credits—a market worth up to $9 billion.
Around the Tax World – January 10, 2024
In The Headlines - Universal Pictures ousts Disney from its throne in 2023, coming in as the highest-grossing studio at the box office.
What's New In The Tax World? - Cutting state tax rates: What was hot in 2023 may not be in 2024
State-By-State Updates -Georgians may have more money in their pockets in 2024 from reduced state income taxes.
Tax Planning Tips - Another day, another EV tax credit update—and it’s a big one.
Around the Tax World – December 28, 2023
In The Headlines - One of the most successful businesses of 2023 is… Taylor Swift.
What's New In The Tax World? - Popular electric vehicles may fall out of favor in 2024 without the help of the EV tax credit
State-By-State Updates -California’s climate programs may have one adverse side-effect—$6 billion in lost gas tax revenue.
Tax Planning Tips - New guidance on the Clean Hydrogen Production Tax Credit is finally being released… but is this good news or bad news?
Around the Tax World – December 11, 2023
In The Headlines - AI-generated fake reviews are taking a toll on the tourism industry—and Exceptional Alien is fighting back with the help of celebrity investors.
What's New In The Tax World? - The fate of a potential “wealth tax” rests on a current Supreme Court case
State-By-State Updates -Georgia’s Republican lawmakers want to speed up state tax cuts.
Tax Planning Tips - Looking to save on taxes next year? Lose the money market funds and consider municipal money market funds and Treasury bills instead.
Around the Tax World – November 23, 2023
In The Headlines - Ryan Gosling is the most popular celebrity—among internet scammers, according to cybersecurity software company McAfee.
What's New In The Tax World? - U.S. lawmakers continue to push for changes to the tax rules on EV credits and cryptocurrency taxation
State-By-State Updates -Overtime just got more exciting in Alabama, which has officially eliminated state taxes on overtime pay.
Tax Planning Tips - Service members can opt into a new tax benefit—the Dependent Care Flexible Spending Account (DCFSA).
Around the Tax World – November 10, 2023
In The Headlines - What do Selena Gomez, Kim Kardashian, Rihanna, and Reese Witherspoon have in common?
What's New In The Tax World? - House Republicans propose a $14 billion reduction in the IRS’ budget to fund aid to Israel
State-By-State Updates -Alabama residents will see a little income boost through a round of tax rebates.
Tax Planning Tips - The IRS’ latest mission: hunting down $1 trillion lost to overseas tax havens.
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Intentionally Filing a Defective Tax Return
Creativity on a tax return is a natural tendency. Many strategies and behaviors we know are wrong, e.g. not reporting all income. However, is it ever okay to disregard some deductions and pay more tax? At first glance, it would seem that the IRS should like the idea of more reported income and a higher tax liability attached to the additional income. The IRS does not.
Side Hustles and Tax Tussles: Tax in the Gig and Share Economy Part Two
The gig economy involves more than one-off and part-time jobs. It also includes when you share your property in exchange for money. This can be a residential property, a vacation home, or even a vehicle. The gig economy has connected those who need rides and places to stay with owners via online platforms. We refer to this part of the gig economy as the share economy.
Accessing these accommodations is easy with the online platforms. But how the people participating should report their income isn’t quite as straightforward. Last time we looked at how your clients should report gig income, just like any other income made as a sole proprietor.
But making money from renting your property out is different, right? If you have clients with rental properties, you report their income on Schedule E (1040), Supplemental Income and Loss. We know from last time that we report gig economy income on Schedule C (1040), Profit or Loss from Business. So, how does rental income derived from the share economy get reported on a tax return? Every taxpayer’s favorite answer, it depends.
Loose Change in Your Couch and Maybe a Tax Break at Your Kitchen Table
A 2023 Tax Court decision upheld what many small business owners and tax practitioners have wondered about for some time. The court found that shareholders of an S corporation could exclude rental income paid to them by their S corporation for holding planning meetings in their homes. While the IRS and court found that the amounts charged by the shareholders were excessive, the court found the arrangement itself within the bounds of the law.
This article examines this case and underlying law and when and how this is a planning idea worth pursuing, the limitations and unknowns involved, and the policy implications of this long standing exclusion. The case is Sinopoli, TC Memo 2023-105 involving the exclusion at IRC Section 280A(g).