Credits & Deductions

  • IRS Allowing Fraudulent Credits to Go Through, Audit Finds

    The federal office tasked with overseeing the Internal Revenue Service says fraudulent claims for refundable credits are going through – in spite of the tools Congress gave the agency to stop them. The Treasury Inspector General for Tax Administration – also known as TIGTA – did its audit as a follow-up to a prior audit…

  • Safe Harbor Clarifies QBI Deduction for Some Rental Properties

    Taxpayers interested in taking the section 199A qualified business income deduction (QBI) for their rental property will be happy to learn that the IRS announced a finalized safe harbor rule this week. QBI was introduced in the Tax Cuts and Jobs Act as tax relief for businesses not eligible for the new 21-percent C corporation…

  • Don’t Get Left Behind on Auto Expense Deductions

    If you’ve always deducted your business vehicle expenses in the past, read on. With the recent changes in the tax code, not everyone can still claim the deduction. Some taxpayers can, but some cannot. In a nutshell, only a few types of taxpayers can now qualify to deduct auto expenses from their taxes. Business Owners…

  • IRS Issues Tax Tip Explaining Educator Deduction

    Now that the tax year 2018 filing season is over, some teachers may know that the educator expenses deduction was moved to line 23 of the new Schedule 1. To help those unsure about which unreimbursed, job-related expenses qualify, the IRS this week released Tax Tip 2019-83. The press release outlines the basics of determining…

  • Dirty Dozen: Avoid Improper Claims for Business Credits

    The Internal Revenue Service is warning taxpayers and tax professionals against improperly claiming various business tax credits, which has become a common tax scam. That’s why the topic shows up on this year’s IRS “Dirty Dozen” list of common scams that can occur anytime during the year. When it comes to bogus credits on business…

  • Reminder: New Tax Law Revised Family Tax Credits

    Tax reform legislation passed in late 2017 doubles the maximum Child Tax Credit, boosts income limits for claiming the credit, and revises the identification number requirement for 2018 and later years. The new law also creates a second, smaller credit of up to $500 per dependent for those taxpayers supporting older children and other relatives…

  • IRS Notes TCJA Changes to ABLE Accounts

    The Internal Revenue Service last week issued a Tax Tip outlining how the Tax Cuts and Jobs Act (TCJA) will affect section 529A ABLE accounts. In 2014, Congress passed The Achieving a Better Life Experience Act, which established a new type of state-offered savings account designed to help disabled Americans afford qualified disability expenses, like…

  • Tax Treatment of Dependents is a Different World Now

    The passage of the Tax Cut and Jobs Act in December, 2017 marked a sea change in how dependents are treated on the average Form 1040. The new law eliminates exemptions for dependents starting in tax year 2018 through 2025. The exemptions were replaced by a larger standard deduction, which ballooned from $6,350 to $12,000…

  • File Now to Stay Eligible for Advance Payment of Premium Tax Credit

    The Internal Revenue Service is sending letters to taxpayers who received advance payments of the premium tax credit in 2015 – but haven’t filed their tax return. Taxpayers must file a return to reconcile any advance credit payments they got in 2015 and to remain eligible to get premium assistance in 2017.

  • The ABCs of Education Tax Credits

    “Education’s purpose is to replace an empty mind with an open one.” – Malcolm Forbes Forbes, of course, knew a thing or two about business and taxes. It could be said that we all need to be, well, better educated about education tax credits. So before it’s time to head back to the classroom, let’s…