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December 9, 2015 11:48 am

A repayment of principal is never deductible. Interest on the loan may be deductible, depending on what you used the proceeds for. If you purchased securities, the interest is treated as investment in...

December 9, 2015 11:47 am

Yes. The specific identification method allows you to use the cost basis of the shares you sell to figure your gain or loss. FIFO, or first-in, first-out, is the default method for figuring basis if y...

November 23, 2015 11:43 am

This rule expired at the end of 2014 and has not yet been extended for 2015. Many believe it will be extended, but it is advisable to wait until later this year to see what Congress does before making...

November 23, 2015 11:41 am

While you clearly have an economic loss, tax rules prevent you from deducting the decline in value from your $120,000 purchase price to the value at the time you converted the condo to rental property...

November 23, 2015 11:40 am

Yes. Normally, to qualify for the home sale exclusion of up to $250,000 of gain on the sale of a principal residence ($500,000 for joint filers), you must own and use your home for two out of the five...

November 9, 2015 11:39 am

Only cash contributions (e.g., checks, credit card charges) are acceptable in 529 plans. You’ll have to sell the stock and donate the proceeds. If the stock has appreciated, you’ll owe capital gai...

November 9, 2015 11:37 am

If you are talking about federal income taxes, they are never deductible. If you paid state income taxes for 2014 when you filed your return in 2015, the additional taxes you paid with your return bec...

November 9, 2015 11:35 am

What you do for your family is great, but the tax law doesn’t reward you with any special tax breaks. If you care for grandchildren in your home and are paid, you must report the income (you may owe...

October 26, 2015 11:33 am

If you fail to meet the two-out-of-five year ownership and use tests, you can qualify for a partial exclusion (related to the period of time you were in the home) if you can show that the move was bec...

October 26, 2015 11:31 am

No. Medicare benefits are tax free; they don’t count as income for determining filing and are not taxed. What’s more, Medicare premiums are tax deductible if you itemize your personal deductions a...

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While you clearly have an economic loss, tax rules prevent you from deducting the decline in value from your $120,000 purchase price to the value at the time you converted the condo to rental property...

Yes. Normally, to qualify for the home sale exclusion of up to $250,000 of gain on the sale of a principal residence ($500,000 for joint filers), you must own and use your home for two out of the five...

Only cash contributions (e.g., checks, credit card charges) are acceptable in 529 plans. You’ll have to sell the stock and donate the proceeds. If the stock has appreciated, you’ll owe capital gai...

What you do for your family is great, but the tax law doesn’t reward you with any special tax breaks. If you care for grandchildren in your home and are paid, you must report the income (you may owe...

If you fail to meet the two-out-of-five year ownership and use tests, you can qualify for a partial exclusion (related to the period of time you were in the home) if you can show that the move was bec...

No. Medicare benefits are tax free; they don’t count as income for determining filing and are not taxed. What’s more, Medicare premiums are tax deductible if you itemize your personal deductions a...

Eligibility for a health savings account (HSA) is determined for each individual. If you qualify, you can set up an account for yourself even though your spouse is ineligible for one because of being ...

You must attach your own statement to your tax return that includes the following information:The transaction was a loan and not a gift (this can be proven by showing a promissory note that inclu...

For 2014, large employers were required to report coverage on employees’ W-2 forms; small employers could do so voluntarily. Employers could also voluntarily report coverage to employees on Form 109...

It’s time to look at a calendar to see whether you meet the time test for the home sale exclusion. You must have owned and used the home as your principal residence for at least two of the five year...

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Job-loss mortgage insurance is a policy that pays some or all of the mortgage payments (and, under some policies, real estate taxes and homeowners insurance) if you lose your job. The IRS has not rule...

A Form 1099-MISC is required to be issued only by a business that pays $600 or more to an independent contractor. If your rental activity is only an investment and not a business, you don’t have to ...

The cost of housekeeping services are never a deductible medical expense; only personal care services may be deductible under certain conditions. However, the cost of housekeeping services incurred to...

No. A Schedule C is required if you are in a trade or business. However, you can report miscellaneous income on line 21 of Form 1040 (“other income”). This miscellaneous income is not subject to s...

Unreimbursed employee business expenses can be deducted as a miscellaneous itemized deduction on Schedule A of Form 1040. So you must itemize, and only amounts in excess of 2% of adjusted gross income...

Earned income remains taxable regardless of age. Similarly, such income continues to be subject to Social Security and Medicare taxes (FICA for an employee; self-employment tax for a self-employed per...

No. The value of employer-paid health insurance for an employee, spouse, and dependent is a tax-free fringe benefit. However, under the Affordable Care Act, employers (other than small employers curre...

First, you must determine whether this was a business or nonbusiness bad debt. A business bad debt is fully deductible as an ordinary loss; a nonbusiness bad debt is treated as a short-term capital lo...

If you have a C corporation that files Form 1120, you only report compensation (including wages, bonuses, and taxable fringe benefits), dividends, and other taxable distributions received. The corpora...

Page 1 of 212

A repayment of principal is never deductible. Interest on the loan may be deductible, depending on what you used the proceeds for. If you purchased securities, the interest is treated as investment in...

Yes. The specific identification method allows you to use the cost basis of the shares you sell to figure your gain or loss. FIFO, or first-in, first-out, is the default method for figuring basis if y...

This rule expired at the end of 2014 and has not yet been extended for 2015. Many believe it will be extended, but it is advisable to wait until later this year to see what Congress does before making...

While you clearly have an economic loss, tax rules prevent you from deducting the decline in value from your $120,000 purchase price to the value at the time you converted the condo to rental property...

No, there is no carryback for capital losses. Capital losses can offset capital gains and up to $3,000 of ordinary income. Any capital loss over this limit can be carried forward indefinitely to offse...

No. Trustees or issuers of traditional IRAs must furnish Form 5498 to participants each year if there is a contribution (including a rollover) or a distribution. It is merely an information return tha...

It’s time to look at a calendar to see whether you meet the time test for the home sale exclusion. You must have owned and used the home as your principal residence for at least two of the five year...

Suspended passive losses become deductible in the year in which there is a complete disposition of the property in a fully taxable event to an unrelated party. The fact that the losses remained suspen...

When you sell property, the difference between what you receive and your tax basis in the property produces gain or loss. When selling property, include what you paid for this, such as the land and th...

Gain or loss is the difference between the basis of the stock and what you received for it. The basis of inherited stock used for determining gain or loss is the estate tax value, which is usually the...

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A repayment of principal is never deductible. Interest on the loan may be deductible, depending on what you used the proceeds for. If you purchased securities, the interest is treated as investment in...

This rule expired at the end of 2014 and has not yet been extended for 2015. Many believe it will be extended, but it is advisable to wait until later this year to see what Congress does before making...

If you are talking about federal income taxes, they are never deductible. If you paid state income taxes for 2014 when you filed your return in 2015, the additional taxes you paid with your return bec...

The home office deduction is allowed for both employees and self-employed individuals, with this difference: employees must use their home office for the convenience of the employer (not for personal ...

Not yet. The more than four dozen tax rules that expired at the end of 2014 have yet to be extended for 2015. Stay tuned!...

Suspended passive losses become deductible in the year in which there is a complete disposition of the property in a fully taxable event to an unrelated party. The fact that the losses remained suspen...

No. Eligibility for the earned income tax credit is based on income, not age. The amount of the credit varies with the number of qualifying children you have. A modest credit applies even if you have ...

Job-loss mortgage insurance is a policy that pays some or all of the mortgage payments (and, under some policies, real estate taxes and homeowners insurance) if you lose your job. The IRS has not rule...

A donor-advised fund is a program that lets you donate cash and certain property now—and take a current charitable contribution deduction—while having funds disbursed to a charity in the future. T...

Under federal gift tax rules, you can give each person $14,000 in 2015. If you make the check out to both your granddaughter and her spouse, you can effectively give up to $28,000 without any gift tax...

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If you are talking about federal income taxes, they are never deductible. If you paid state income taxes for 2014 when you filed your return in 2015, the additional taxes you paid with your return bec...

Yes. An election worker, who may be compensated by a set fee per day or a stipend for an election period, may be referred to by various terms (e.g., poll worker, moderator, machine tender, checker, ba...

While you call it recycling, in effect you are selling the item at a price that is less than what you paid for it. You have no gain to report; you cannot take a loss because the item was for personal ...

Yes, but you need to consider how to make the child a beneficiary. Being a minor means the child can’t inherit the account outright; you’ll need to name a custodian who manages the account until t...

Yes. Exchange traded funds, or ETFs, are essentially stock, and the wash sale rules apply to stock as well as mutual fund shares and bonds. Thus, a loss on the sale of an EFT cannot be recognized if y...

Not really. Most of the taxes you refer to (as well as taxes on airline tickets, gasoline at the pump, and cable and Internet access) are excise taxes, which are not deductible as itemized deductions ...

The law doesn’t put a cap on generosity. However, when gifts to an individual exceed a certain amount, you’ll have to deal with federal gift taxes. In 2014, you can give up to $14,000 per individu...

While the interest on municipal bonds is tax free, this doesn’t mean gain or loss on the sale of bonds is excludable from gross income. Gain or loss on the sale of municipal bonds is figured in the ...

The cost of housekeeping services are never a deductible medical expense; only personal care services may be deductible under certain conditions. However, the cost of housekeeping services incurred to...

A child who is unrelated to the person who provides support may be able to claim a dependency exemption if the child is a qualifying relative. Even though there are no blood ties, a qualifying relativ...

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