Serving on a jury is one of the basic responsibilities of American citizenship. Unfortunately, performing that civic duty can also produce a small and easily overlooked federal income tax issue. Courts commonly compensate jurors for their service. The amount may be modest, particularly compared with the wages a person might lose by missing work. Nevertheless, [...]
Finding a wad of cash in an old piece of furniture sounds like good luck, not a taxable event. Finding valuable coins buried in the backyard might feel even less like “income.” Nobody paid you. You did not sell anything. You did not perform services. You did not receive a paycheck or investment distribution. Nevertheless, [...]
Americans lose billions of dollars every year to financial scams. Investment fraud, cryptocurrency schemes, fake trading platforms, impersonation scams, and increasingly sophisticated online fraud can wipe out savings remarkably quickly. When that happens, victims naturally ask a tax question: Can money stolen through a scam be deducted on your federal income tax return? The surprising [...]
Receiving an IRS penalty notice can be intimidating. Fortunately, federal tax law recognizes that not every failure to file, pay, or comply with tax requirements is the result of neglect or intentional wrongdoing. In many situations, taxpayers may qualify for penalty relief based upon reasonable cause. Understanding when reasonable cause applies can save hundreds—or even [...]
Donating appreciated property to charity can be one of the most tax-efficient ways to give. Rather than selling an asset, paying capital gains tax, and then donating the proceeds, many taxpayers instead donate the property directly and potentially receive a charitable contribution deduction. However, there is one surprisingly technical requirement that regularly causes taxpayers to [...]
Many retirees assume that donating money to charity and taking a charitable deduction produces the same tax result as giving directly from an IRA. In reality, a Qualified Charitable Distribution (QCD) can be significantly more tax-efficient because it generally excludes the distribution from taxable income altogether. For taxpayers who are charitably inclined and own traditional [...]
Many employees assume that if their employer reimburses them for bicycle commuting expenses, those payments are tax-free. While that was generally true for many years, the Tax Cuts and Jobs Act (TCJA) dramatically changed the rules. If your employer pays for your bicycle commuting costs, the tax consequences today are often different than many taxpayers [...]
Many taxpayers know they can deduct charitable contributions if they itemize deductions. Far fewer understand that a legitimate charitable donation can still be denied if the taxpayer cannot properly substantiate it. The Internal Revenue Code allows charitable contribution deductions, but Treasury Regulations impose detailed documentation requirements. If those requirements are not met, the deduction may [...]
Business owners often assume that every piece of equipment they purchase must be depreciated over several years. That is not always true. The Internal Revenue Code and Treasury Regulations contain a separate set of rules governing materials and supplies, allowing many inexpensive or short-lived items to be deducted immediately as ordinary business expenses. Understanding these [...]
IRS Interest Is Not a Penalty Many taxpayers receive an IRS notice showing both penalties and interest and assume they are the same thing. They are not. An IRS penalty is generally intended to encourage compliance with the tax laws. Interest, however, is designed to compensate for the time value of money. If taxes are [...]
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