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March 1, 2021 9:09 pm

An amended return to claim a refund generally can be filed up to three years from the due date of that return (or the actual filing date if after the due date)....

March 1, 2021 9:03 pm

Refunds of federal income taxes are never taxable because the taxes were not deductible. Refunds of state income taxes may or may not be deductible. It depends on whether the taxpayer itemized deducti...

March 1, 2021 9:02 pm

Seniors generally are subject to the same tax rules as other individuals when it comes to reporting income and claiming deductions and credits. However, those age 65 and older can claim an additional ...

March 1, 2021 9:00 pm

Yes. The Consolidated Appropriations Act, 2021, created a one-year opportunity. Use the prior year’s income if it results in a larger earned income tax credit. But don’t if it results in reducing ...

January 17, 2021 8:12 pm

Taxation of the payment depends on various factors. If, for example, the settlement was the result of accounting errors erroneously inflating the price of the stock, then the payment is a refund of yo...

January 17, 2021 8:11 pm

The Consolidated Appropriations Act, 2021, specifically allows businesses to deduct all of their expenses to the extent otherwise allowed under tax law. This includes expenses covered by PPP loans tha...

January 17, 2021 8:10 pm

Distribution of the second round of stimulus payments to individuals began early in 2021. The payment amounts were based on 2019 AGI (obviously the IRS does not yet know 2020 AGI because 2020 returns ...

January 17, 2021 8:08 pm

The additional standard deduction amount for blindness applies per person. If one spouse is blind, the couple’s standard deduction is increased by one additional amount for a married person ($1,300 ...

December 9, 2020 10:33 pm

Legal fees related to seeking a refund of individual income taxes normally would be deductible as a miscellaneous itemized deduction subject to the 2%-of-adjusted-gross-income floor. However, this ded...

December 9, 2020 10:31 pm

Gifts of cash and current interest property (not gifts of a future interest) do not have to be reported to the IRS on a gift tax return, Form 709, if the total to any recipient does not exceed the ann...

An amended return to claim a refund generally can be filed up to three years from the due date of that return (or the actual filing date if after the due date)....

Refunds of federal income taxes are never taxable because the taxes were not deductible. Refunds of state income taxes may or may not be deductible. It depends on whether the taxpayer itemized deducti...

Seniors generally are subject to the same tax rules as other individuals when it comes to reporting income and claiming deductions and credits. However, those age 65 and older can claim an additional ...

Yes. The Consolidated Appropriations Act, 2021, created a one-year opportunity. Use the prior year’s income if it results in a larger earned income tax credit. But don’t if it results in reducing ...

Taxation of the payment depends on various factors. If, for example, the settlement was the result of accounting errors erroneously inflating the price of the stock, then the payment is a refund of yo...

The Consolidated Appropriations Act, 2021, specifically allows businesses to deduct all of their expenses to the extent otherwise allowed under tax law. This includes expenses covered by PPP loans tha...

Distribution of the second round of stimulus payments to individuals began early in 2021. The payment amounts were based on 2019 AGI (obviously the IRS does not yet know 2020 AGI because 2020 returns ...

The additional standard deduction amount for blindness applies per person. If one spouse is blind, the couple’s standard deduction is increased by one additional amount for a married person ($1,300 ...

Legal fees related to seeking a refund of individual income taxes normally would be deductible as a miscellaneous itemized deduction subject to the 2%-of-adjusted-gross-income floor. However, this ded...

Gifts of cash and current interest property (not gifts of a future interest) do not have to be reported to the IRS on a gift tax return, Form 709, if the total to any recipient does not exceed the ann...

No, filing status has no impact on eligibility for the credit. Owners of residential low-income rental buildings can claim a low-income housing credit over a 10-year period. You can learn more about t...

Each spouse who has a policy can take the deduction up to the dollar limit for his/her age. Thus, if both spouses are age 71 and they each pay premiums in 2015 of at least $4,750, they can deduct $9,5...

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...

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 ...

Once you are enrolled in Medicare, you are no longer eligible to contribute to an HSA. Your contributions must be prorated for the period in which you have a high-deductible health plan (HDHP). Thus, ...

If you bought the time share for personal use, then just as in the case of a sale of a principal residence, no loss is allowed. If you bought the time share for investment purposes, you may be able to...

It depends on whether you’re viewed under the tax law as a developer. If you hold the lot as investment property, any gain you reap is taxed as capital gain. You may also owe an additional 3.8% tax ...

Not yet, but the odds are in favor of an extension. Unfortunately, we probably won’t know for sure until later this year. If it comes very late in the year, the IRS may even give relief for rollover...

Sorry about your personal loss. The inheritance isn’t taxable, but receiving funds from the annuity is because your cousin never paid tax on this income. Sounds confusing, but it’s the same thing ...

Yes. While there are certain ordering rules for applying capital losses against capital gains, ultimately, long-term capital losses can offset any short-term gains....

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...

If you pay the money directly to the facility, there is no dollar limit on how much you can effectively gift to benefit your mother for purposes of federal gift taxes. What’s more, this action may e...

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...

You can take a tuition and fees deduction only for a dependent, so if your granddaughter is not your dependent, you’re out of luck. If she were your dependent, the deduction is capped at $4,000 (you...

On 2014 returns, taxpayers can choose to deduct state and local income taxes or state and local sales taxes. Those who opt to deduct state and local sales tax take the amount of their deduction from a...

The cost of repairs and maintenance for a rental property is deductible as long as the property has been held for rental at a fair rental price. However, because there was no rent, the net loss (expen...

Yes. If the amount you receive on the sale is more than you paid for the car, the different is taxable gain. However, as is the usual case with a personal vehicle, where the value typically declines o...

Generally no (and they are not qualified expenses for purposes of the American opportunity or lifetime learning credits). If the education is for business, you may be able to treat the cost of room an...

The payment of principal is never a deductible expense. However, check the payoff information to see whether there were any fees paid in addition to principal; the fees may be considered a selling exp...

Group-term life insurance up to $50,000 of coverage is tax free to employees, former employees, and leased employees (there’s a $2,000 cap on coverage for spouse and dependents). Group-term life ins...

Married persons who file separately are barred from claiming certain tax credits, such as the adoption credit or education credits. However, there is no such bar for the low-income housing credit....

Income averaging for all taxpayers was a way to effectively lower the tax rate on this year’s income by spreading it over a number of prior (lower-income) years to find an average tax rate for it. T...

Sorry about your personal loss. The inheritance isn’t taxable, but receiving funds from the annuity is because your cousin never paid tax on this income. Sounds confusing, but it’s the same thing ...

Yes. While there are certain ordering rules for applying capital losses against capital gains, ultimately, long-term capital losses can offset any short-term gains....

No. It was your property that was donated, so the donation belongs to you. You could have given the items to your brother as a gift and let him make the donations....

Sorry about your personal loss. The settlement is tax free to you because it is compensation for personal physical injury. However, if any part of the settlement is for punitive damages, those are tax...

If you itemize deductions, likely the convenience fee is tax deductible. The IRS hasn’t said whether this specific convenience fee is deductible as part of your real estate taxes (which has no incom...

There’s no clear answer, and you may have to argue your position for this deduction if your return is questioned. On the one hand, the Tax Court allowed a deduction for the extra cost of organic foo...

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