Ask JK

Need an important question answered?

Submit it and a J.K. Lasser Tax Expert may answer your question online.

  • Do you want to sign up to receive the J.K. Lasser Alert newsletter?
FIND ANSWERS

Recently Answered Questions

 

November 3, 2020 11:18 pm

There are no longer any age limits on making contributions to traditional IRAs. The cap of age 70½ expired after 2019. This means that those of any age who continue to have earned income (or other in...

November 3, 2020 11:17 pm

There are no required minimum distributions for 2020 (the requirement for 2020 was waived by the CARES Act), so the starting age is not significant for this year. After 2020, the starting age for comm...

November 3, 2020 11:15 pm

The cost basis of a home includes only capital improvements. Ordinary expenses, such as utility costs and property taxes, do not increase basis....

November 3, 2020 11:14 pm

The distribution is included in gross income; there is no exclusion in the law for using retirement account funds for this purpose. However, because you are over age 59½, there is no 10% early distri...

October 6, 2020 12:18 am

The IRS sets an interest rate each quarter that is applicable to underpayments by individuals. The rate for the third and fourth quarters of 2020 is 3%. You can see all interest rates listed by the Na...

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...

There are no longer any age limits on making contributions to traditional IRAs. The cap of age 70½ expired after 2019. This means that those of any age who continue to have earned income (or other in...

There are no required minimum distributions for 2020 (the requirement for 2020 was waived by the CARES Act), so the starting age is not significant for this year. After 2020, the starting age for comm...

The cost basis of a home includes only capital improvements. Ordinary expenses, such as utility costs and property taxes, do not increase basis....

The distribution is included in gross income; there is no exclusion in the law for using retirement account funds for this purpose. However, because you are over age 59½, there is no 10% early distri...

The IRS sets an interest rate each quarter that is applicable to underpayments by individuals. The rate for the third and fourth quarters of 2020 is 3%. You can see all interest rates listed by the Na...

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 ...

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...

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...

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...

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...

You can treat the distribution from the IRA as exempt from the penalty if you are disabled. Just be sure that you meet the strict definition of disability that applies in this case. To be disabled in ...

You can take distributions from your IRA to satisfy required minimum distributions (RMDs) in cash or in kind, meaning in stock. The option you use depends on what’s in your account and what you want...

While interest on municipal bonds is tax free for federal income tax purposes, gain or loss on the sale of the bonds must be reported. The loss is treated as a capital loss, which is deductible within...

It depends. If you qualify for the home sale exclusion, then gain up to $250,000 ($500,000 on a joint return) is tax free; there is no capital gain. If your gain excludes your applicable exclusion amo...

Roth IRAs are designed for retirement savings. While contributions are not tax deductible, withdrawals of earnings after age 591/2 are tax free as long as the account has been open for at least 5 year...

No. The deadline for 2012 contributions was April 15, 2013, regardless of filing extensions. However, you can make a 2013 contribution now; you don’t have to wait until the end of the year or even u...

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 ...

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...

The starting point is determining whether you have a gain or loss. If you have a gain, your other buying or selling activities have no impact on reporting the gain. If you have a loss and buy substant...

It depends. HH bonds were issued in exchange for E and certain other bonds to enable bondholders to continue deferring the tax on the interest that accrued. The Treasury stopped issuing HH bonds in 20...

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 ...

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....

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...

It depends. Whether you owe income taxes depends not only on your wages, but on all of your income. If your gross income is below the filing threshold for your filing status, you’ll obtain a full re...

You’re not asking the right question. You should be asking whether your spouse is your employee. Under the circumstances described, where your spouse is working solely for you and you have control o...

No. The requirement to issue a Form 1099 for the payment of services of $600 or more to an independent contractor applies only to businesses. It does not apply to services for individuals....

Medical expenses can be deducted as itemized medical expenses only in the year in which they are paid. If you can’t use them in the year of payment because you don’t itemize or total medical costs...

No. An individual’s charitable contributions can be deducted only as an itemized deduction. Even if the rental property is a trade or business, with income and expenses reported on Schedule C rather...

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...

High-income taxpayers pay an additional charge for Medicare Parts B and D. The Part B surcharges for 2014 are unchanged from 2013; those for Part D are only slightly higher for 2014 than in 2013.  ...

Gifts up to $14,000 in 2013 are not taxable for gift tax purposes (they are never taxable for income tax purposes, regardless of amount). The additional $1,000 per child could be taxable, although you...

advertisement