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October 6, 2020 12:17 am

For purposes of determining whether an employee fringe benefit is taxable to the employee, the same rules apply whether the employers are tax-exempt organizations or private sector businesses. If the ...

October 6, 2020 12:15 am

The definition of a disabled person is based the definition used for purposes of Social Security disability benefits. A person is disabled if unable to have substantial gainful employment. For purpose...

August 27, 2020 10:41 pm

A business that loses money year after year may draw the attention of the IRS; it may question whether this is a business with a profit motive or a mere hobby activity for which losses (expenses in ex...

August 27, 2020 10:39 pm

For the costs of assisted living to be deductible as an itemized medical expense, the resident must be chronically ill. This means the resident is (1) unable to perform at least two of the six activit...

August 27, 2020 10:38 pm

The IRS interest rate on underpayments is set quarterly. For the third quarter of 2020 (July 1 through September 30), the rate for an individual is 3%. Interest compounds daily. It’s wise to request...

July 15, 2020 11:24 pm

Check with your new financial institution to see whether it offers fee reimbursement (some do). You may add the $20 out of pocket to complete the rollover amount, but this must be done within 60 days ...

July 15, 2020 11:23 pm

Yes. Whether you’re paid in cash, property, or services, you must report it all as rent. If you’re accepting the services as equal to the rent owed to you, then that means the fair market value of...

July 15, 2020 11:22 pm

No. Payouts from a long-term care policy for long-term care are tax free....

July 15, 2020 11:21 pm

There is no such deduction allowed for 2019 returns. The $300 limit on charitable contributions by individuals using the standard deduction is allowable only for 2020 returns (unless Congress extends ...

June 1, 2020 10:54 pm

Economic Impact Payments are tax credits. As such, they cannot automatically be taken by nursing homes or assisted living facilities. The payments don’t count as “resources” for federal benefits...

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 ...

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...

The tax law gives the custodial parent the right to claim the exemption for a child as long as the child does not provide more than half of his/her own support. However, that parent can waive the righ...

The fee can be deductible as an itemized medical expense (in excess of 7.5% of adjusted gross income if your mother is 65 or older) as long as entry into the facility is on the direction or suggestion...

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...

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...

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...

Once you enroll in Medicare (April 1, 2015), you are no longer eligible to contribute to an HSA. You can, however, contribute to an HSA for the months prior to this date (assuming you are covered by a...

Only a taxpayer, or a representative with a taxpayer’s permission, can obtain copies of previously filed tax returns. Ask your parents to take action: They can request a free copy of a transcrip...

If the CD is in a tax-deferred or tax-free account, such as an IRA or Roth IRA, interest on the CD is not currently taxed; the rollover of the CD when it matures is not a taxable event. If the CD is i...

There are only 2 ways to put money into a Roth IRA: (1) an annual contribution, which must be based on earned income and can only be made up to a set dollar amount annually; and (2) a conversion from ...

Probably not. An IRA contribution can be based only on earned income. A fellowship or grant type of payment is different from income for services provided. Grant recipients at the NIH are not consider...

The favorable rule allowing debt forgiveness on a principal residence mortgage up to $2 million expired at the end of 2013. It could be extended, but given the resurgence in the housing market, it may...

Yes. Even though there is an age limit for making deductible IRA contributions, there is no age limit for making a conversion from a traditional IRA to a Roth IRA. There is no need to have earned inco...

The IRS says: “For the year of the account owner’s death, use the RMD the account owner would have received. For the year following the owner’s death, the RMD will depend on the identity of the ...

The special capital gain rates are supposed to allow taxpayers to pay less tax on these gains than on ordinary income. Thus, the special 28% capital gains rate for collectibles applies for taxpayers i...

Yes. The deductions for mortgage interest and real estate taxes are separate items. Claiming one has no impact on claiming the other. The only limitation on the deduction for property taxes is the app...

If you take a deduction for a bond premium, you must reduce the basis of the bond by this amount. If you sell the bond before maturity, you’ll have a capital gain if the selling price exceeds your b...

Check with the plan administrator of your current employer to see whether the plan allows you to postpone RMDs until you retire. (This assumes you don’t own more than 5% of the company.) If the plan...

There is no tax deduction for gifts directly to or on behalf of individuals. Just be glad in knowing you saved your daughter future interest costs and enabled her to start off debt free....

You cannot deduct the cost of early education. However, the grandchild’s parent may be eligible for a dependent care credit (assuming you gave the funds to the parent who then paid the tuition). Pre...

You have no income tax liability, but depending upon the size of the remaining balance you may face federal gift tax issues. Your son has no tax liability; your generosity in paying off his mortgage i...

Home improvements for medical reasons are tax deductible, but only to the extent that they do not increase the value of the home. Consult with a realtor to make this determination. Note: Improvements ...

Deductible medical expenses include the cost of treatment for the purpose of affecting any structure or function of the body. While the IRS has not ruled on your specific condition, having a medical d...

The tax law gives the custodial parent the right to claim the exemption for a child as long as the child does not provide more than half of his/her own support. However, that parent can waive the righ...

The fee can be deductible as an itemized medical expense (in excess of 7.5% of adjusted gross income if your mother is 65 or older) as long as entry into the facility is on the direction or suggestion...

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, 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...

A capital loss must be applied in a set order at a set time. In the year in which it is realized, it offsets capital gains and, if there is any excess loss, up to $3,000 of ordinary income (such as sa...

If the CD is in a tax-deferred or tax-free account, such as an IRA or Roth IRA, interest on the CD is not currently taxed; the rollover of the CD when it matures is not a taxable event. If the CD is i...

Uniform Transfers to Minors Act (UTMA) accounts are owned by a minor, even though a parent or other adult acts as custodian. Once the minor reaches the age of majority (18 in most states), the funds b...

The above-the-line deduction for tuition and fees for higher education can be claimed by a taxpayer only for him/herself, spouse, or dependent. If your grandchild is your dependent, then you qualify f...

Probably not. An IRA contribution can be based only on earned income. A fellowship or grant type of payment is different from income for services provided. Grant recipients at the NIH are not consider...

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...

While Medicare does not cover the cost of long-term care services, they may qualify as a deductible medical expense. Since your spouse is chronically ill and requires personal care services, the cost ...

Capital losses can be carried forward only to offset capital gains (and up to $3,000 of ordinary income) in future years. The capital losses of a deceased spouse can be used on the final joint return,...

The favorable rule allowing debt forgiveness on a principal residence mortgage up to $2 million expired at the end of 2013. It could be extended, but given the resurgence in the housing market, it may...

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