The IRS will now allow taxpayers who otherwise qualify for the home office deduction to use a simplified safe-harbor method that reduces the recordkeeping generally involved under the actual-expense method.
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TOPICS / INDIVIDUALS
Deductions
Nine Factors That Determine Whether an Activity Is a Hobby
Under the hobby loss rules, the deductible expenses of a hobby are limited to the amount of income it generates and are further subject to a floor of 2% of AGI as a miscellaneous itemized deduction.
Oral Surgeon Cannot Deduct Expenses for Traveling Between Home and Job
The Tax Court upheld IRS-assessed deficiencies caused by the disallowance of a number of travel expenses an oral surgeon deducted on his Schedule C and its imposition of a negligence penalty under Sec. 6662(a).
Tithing Is Not Necessary Expense
The Tax Court upheld the IRS’s determination that a taxpayer’s tithing payments to his church were conditional expenses for purposes of determining the amount of the taxpayer’s monthly payments under a partial payment installment agreement.
IRS Announces Simplified Home Office Deduction
The IRS provided taxpayers with an optional safe-harbor method to calculate the amount of the deduction for expenses for business use of a residence during the tax year under Sec. 280A, beginning with the current tax year.
Tax Court Denies Investment Interest Deduction
The Tax Court held that the taxpayers were not entitled to take an investment interest deduction for any of the mortgage interest they paid on property they had purchased because they failed to substantiate their claimed allocation of the mortgage debt.
First Circuit Breathes New Life Into Façade Easement Deductions
A recent First Circuit decision will affect how the tax benefits of certain façade easements are litigated in the First Circuit and may result in appeals of some of the Tax Court’s recent easement holdings.
Developments in Individual Taxation
This article covers recent developments in individual taxation. The items are arranged in Code section order.
Planning for Charitable Contribution Limitations
The amount of charitable contributions an individual can deduct in any one tax year is limited depending on the types of organizations to which the contributions were made, the kinds of property contributed, and the amount or value of the donated property.
IRS Releases Standard Mileage Rates for 2013
Optional standard mileage rates for use of a vehicle went up by 1 cent per mile for 2013.
Tax Treatment When Employees Surrender Paid Time Off to Benefit Others
There are various types of PTO donation and leave-sharing programs, not all of which are disaster-related. The tax treatment to the donating employee differs based on the type of program.
Simplified Home-Office Deduction Safe Harbor Announced
The IRS gave taxpayers an optional safe-harbor method to calculate the amount of the deduction for expenses for business use of a residence during the tax year under Sec. 280A.
Contemporaneous Documentation of Charitable Contributions
Earlier this year, the Tax Court highlighted how an apparently slight oversight in documentation can upend the interdependent relationship between donee and donor.
Per Diem Rate Updates for 2012–13
The IRS has issued its annual update of special per diem rates for use in substantiating certain business expenses taxpayers incur when traveling away from home.
Individual Tax Update
This article covers recent developments affecting individual taxation.
Standard Mileage Rates Go Up a Penny in 2013
Optional standard mileage rates for use of a vehicle will go up by 1 cent per mile for 2013, the IRS announced.
Leave-Based Donation Programs Allowed for Hurricane Sandy Relief
In response to the extraordinary damage caused by Hurricane Sandy and the extreme need for relief, the IRS has released guidance for employers who are considering adopting leave-based donation programs to aid the storm’s victims.
Employee-Stockholder’s Unpaid Loan Balance
Whether a taxpayer can claim a business bad debt or a nonbusiness bad debt is particularly important and can lead to a different result on the tax return.
Medicare Premium Deduction for Self-Employed Individuals
The IRS Chief Counsel’s Office clarified that all Medicare premiums are insurance constituting medical care and may be deducted under Sec. 162(l) as an above-the-line deduction by self-employed individuals.
Handling Expenses Incurred in Acquiring a Residence
A homebuyer’s various settlement and closing costs may be deductible, capitalizable (added to basis), or, in some cases, neither.
INDIVIDUALS
Current Developments in Taxation of Individuals: Part 1
This update surveys recent federal tax developments involving individuals, including court cases, rulings, and guidance issued during the six months ending October 2025.
