Taxpayers, in general, are in a partnership with the Internal Revenue Service. However, unlike the case of traditional partnerships in which two or more taxpayers mutually agree on the terms of the partnership, in this partnership, the IRS sets the rules to share the...

The big advantage of 529 plans is that qualified withdrawals are always federal-income-tax-free, and usually state-income-tax-free too. Taxpayers should know that not all 529 withdrawals are tax-free qualified withdrawals, even in years when you have heavy college...

A 529 plan provides a tax saving advantaged to encourage saving for future education costs. 529 plans, also known as “qualified tuition plans” are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal...

Taxpayers could plan on how to apply the principal residence tax break of $250,000 for single taxpayers and $500,000 for married ones when getting married or divorced, or when converting another property into your home. In both marriage and divorce situations, a home...

Taxpayers should not ignore their past due tax debts. Many taxpayers have either entered into an agreement with the Internal Revenue Service to pay their tax debts and have failed to honor the agreement or have completely disregarded IRS notices for payments. Taxpayer...

Many small business owners are unknowingly filing the wrong tax return form for their business, do not file their business tax return, incorrectly file their business return by themselves, do not properly keep records, and do not have a spreadsheet or do not use any...

In Gans v. Commissioner, the taxpayer prevailed over the IRS by establishing that she was abused by her husband, among others, and consequently qualified for relief from joint tax liability. Marriage carries many tax consequences that could be minimized through...

The Advance Child Tax Credit would cause some taxpayers to owe taxes when they file their tax return for tax year 2021, unless taxpayers who are employees adjust their tax withholding and self-employed taxpayers pay quarterly estimated tax or pay more in...

Taxpayers' tax liabilities could be drastically changed after a divorce. However, when a couple is contemplating a divorce, a discussion with their lawyers and tax advisors related to tax implications of their divorce could greatly help in controlling the tax...

US citizens and resident aliens are taxed on their worldwide income. Your tax filing obligations follow you wherever you are. The good news: there are several tax rules to avoid double taxation and to lower tax liabilities. Taxpayers should keep track of their...

Even though taxpayers are liable for every position taken on their tax return, however, the code and regulations allow taxpayers to shift the liability for the penalty to others when the taxpayer could prove there was reasonable cause. As per the Internal Revenue Code...

Tax returns could be very complicated for taxpayers. Regardless of the level of complication, all taxpayers could tremendously benefit by knowing their tax return or by asking questions. Hiring a tax preparer to prepare a tax return does not confer an...

The Tax Cuts and Jobs Act of 2017 (TCJA) brought many changes to the tax code. Among many other changes, it redefined the deductibility of business expenses and disallowed the deduction of out-of-pocket expenses paid by employees on their personal tax return....

Improper car expenses deduction documentation is termed the “unpardonable sin" in an Internal Revenue Service (IRS) audit. As self-employed or business owners when taxpayers received letters from the IRS telling them that they are the subject of an IRS audit, there is...

You can hire your children to lower your tax liabilities.  If you have not taken the advantage of the tax benefit of hiring your kids because you want them to focus on their school activities, why not changing your focus to get a huge tax saving and give your children...

Taxpayers should take their tax due notices seriously and explore their available options. It is estimated that in 2020, 25 million taxpayers could not pay their taxes or failed to file their returns. The pandemic has made the matter worst and the number is expected...

The tax filing deadline has arrived, May 17, 2021. Taxpayers are advised to request an extension to October 15, 2021 if they cannot file on time. Compound interest on tax due starts on May 18, 2021. There is still time to legally lower your tax liability. Many...

Many small business owners are unknowingly filing the wrong tax return form for their business, do not properly keep records, and do not have a spreadsheet or do not use any software to track their profit and loss from their business venture. This is not standard...

The Covid-19 pandemic or other circumstances of death have caused this tax season 2020 to be the last tax return for taxpayers who did not survive to see this new year. The deceased representative, the executor, might have to file the last tax form or forms and wonder...

Congress passed H.R. 1319, the American Rescue Plan Act (the Act) and President Biden signed it into law on March 11, 2021, to relieve the financial burdens facing many taxpayers and to accelerate the recovery of the economy. The Act is a $1.9 trillion relief package...

Recent court cases have shown how it is very difficult for taxpayers to prevail in courts when they seek innocent spouse relief. Marriage carries with it many tax consequences that could be minimized through careful tax planning strategies. Marriage planning should...

Taxpayers should not ignore their past due tax debts. Many taxpayers have either entered into an agreement with the IRS to pay their tax debts and have failed to honor the agreement or have completely disregarded IRS notices for payments. A taxpayer should not ignore...

Taxpayers are liable for the accuracy of their tax return. Unfortunately, many taxpayers do not know the content of their personal or business tax return. The Internal Revenue Service will not process a return until the taxpayer declares and signs that "Under...

The Consolidated Appropriations Act, 2021, H.R. 133, passed by both houses of Congress on December 21, 2020 and signed into law on December 27, 2020 contains, among others, many COVID-19 related provisions: A second round of direct cash assistance payments of $600 for...

We are at the end of a year that has proven to be a year of lot of changes in many aspects. This year, we have seen tremendous changes in our way of living that will carry over to years to come. However, the changes that the pandemic has brought to the tax laws mainly...

The following are some of the areas you could explore as tax breaks to help you minimize your taxable income as part of your year-end tax planning strategy.  Reduction in Business Interest Limitation.  The CARES Act reduced the limitation on the deductibility of...

The following are some of the areas you could explore to gain tax breaks to help you minimize your tax liability as part of your year-end tax planning strategy. Prepay Expenses Using the IRS Safe Harbor. IRS regulations contain a safe-harbor rule that allows...

Starting a business could be very exciting. Regardless of the type and size of your future business, you must conduct your research and get professional advice before you start your business. You could learn a lot from a successful business owner. Many professionals...

There is what is called the “unpardonable sin" in an IRS audit. As self employed or business owner when you received a letter from the IRS telling you that you are the subject of an IRS audit, there is one record that receives special attention. This record can create...