Taxpayers should be allowed to use Form 1040 to amend their returns and should be able to e-file amended returns, according to recommendations made by the Treasury Inspector General for Tax Administration.
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Individuals
Help for Self-Employed Clients Who Owe Taxes They Cannot Pay
In tax practice, CPAs occasionally encounter self-employed clients who have difficulty keeping up with their quarterly estimated tax payments. The problem of making adequate estimated tax payments is particularly difficult for the self-employed because they generally do not have taxes withheld and remitted to the government, as do most employees with wages reported on Form W-2.
Unused ITINs Will Expire After Five Years Under New IRS Policy
The IRS announced a new: ITINs that are not being used will expire after five years. The policy will go into effect in 2016.
Real Estate Professionals: Avoiding the Passive Activity Loss Rules
Qualifying as real estate professionals allows taxpayers to avoid having their rental real estate activities treated as per se passive. This article discusses the requirements for qualifying as a real estate professional and how the requirements have been interpreted by the IRS and the courts.
HSA Inflation Adjustments for 2015
The IRS issued the calendar year 2015 inflation-adjusted figures for the annual contribution limits for health savings accounts and the minimum deductible amounts and maximum out-of-pocket expense amounts for high-deductible health plans.
Like-Kind Exchange Rules: Continued Evolution
For many years, taxpayers have been able to defer recognition of gain on the disposition of assets by engaging in Sec. 1031 like-kind exchanges. Consequently, many questions and issues surrounding these transactions have been addressed, but many cases and rulings continue to arise each year. This article analyzes these cases and rulings and identifies questions that still need to be answered.
Tax Simplification: Key to Fighting Tax Return Identity Theft
Identity theft and tax simplification are high priorities for members of Congress, the IRS, and all taxpayers. Though most people think the issues are unrelated, one potential way to decrease identity theft and preparer fraud is tax simplification.
Planning With Home-Equity Loans and Mortgage Refinancing
Homeowners should not overlook the opportunity to generate cash flow by using the equity in their residence. Not only are home-equity loans a relatively cheap source of financing (considering the after-tax effective borrowing rate), but also the repayment terms are often more generous than those on unsecured loans.
Tax Treatment of Distributions to Pay Accident or Health Insurance Premiums
The IRS finalized regulations that provide that distributions from qualified retirement plans to pay accident or health insurance premiums are taxable unless a statutory exclusion applies. However, arrangements where amounts are used to pay premiums for disability insurance to replace retirement plan contributions in the event of a participant’s disability are not treated as taxable under the regulations if they meet certain requirements.
IRS Adopts “Taxpayer Bill of Rights”
The IRS released a “Taxpayer Bill of Rights” intended to better communicate to taxpayers their existing statutory and administrative protections.
State Income Tax Filing Requirements for Same-Sex Married Couples in Light of Rev. Rul. 2013-17
Most states that ban same-sex marriage also prohibit legally married same-sex couples from filing a joint state income tax return. This item addresses some of the major filing requirements and issues that same-sex couples may encounter in filing their personal income tax returns.
Severance Payments Subject to FICA Withholding
The Supreme Court, reversing a decision of the Sixth Circuit, held that severance payments to terminated employees are subject to FICA withholding.
Procedures Allow Separate Return Filing for Abuse Victims to Claim Premium Tax Credit
Victims of domestic violence who are afraid or unable to contact their spouse to file a joint return may be able to claim the Sec. 36B health insurance premium tax credit using new procedures announced by the IRS.
Simplified Home Office Deduction: When Does It Benefit Taxpayers?
Many taxpayers will adopt the IRS’s new simplified method of calculating home-office deductions, but there are certain instances where simpler may not be better.
IRS Will Follow the Tax Court on One-IRA-Rollover-per-Year Rule
To settle the question of whether the limitation on rolling over one IRA per year under Sec. 408(d)(3)(B) applies to taxpayers on an aggregate basis or on an IRA-by-IRA basis, the IRS announced it will follow the a recent Tax Court’s recent decision, applying the rule on an aggregate basis, meaning no matter how many IRAs a taxpayer has, the taxpayer is limited to one rollover per year.
Retirement Plans Must Recognize Same-Sex Marriages
Administrators of qualified retirement plans must recognize the same-sex spouses of legally married participants as of June 26, 2013, under guidance issued by the IRS but will not be required to amend their plans to retroactively recognize participants’ legal same-sex marriages before that date.
TIGTA Finds $2.3 Billion Alimony Tax Gap
The discrepancies between alimony income reported by taxpayers and alimony deductions claimed resulted in $2.3 billion in excess deductions in 2010, TIGTA reported.
Final Rules Govern Tax Treatment of Distributions to Pay Accident or Health Insurance Premiums
The IRS finalized regulations that provide that distributions from qualified retirement plans to pay accident or health insurance premiums are taxable unless a statutory exclusion applies.
Tax Owed on Full Sale Price Where Taxpayer Won’t Provide Cost Basis Information
The Eleventh Circuit upheld a deficiency notice of more than $5 million against a taxpayer who reported adjusted gross income of $22,921 and taxable income of $13,221 on his late-filed 2006 return.
Bonus Depreciation Denied for Asset Used but Not Considered Placed in Service
The Tax Court denied an insurance salesman and his wife an $11 million bonus depreciation deduction on a $22 million private plane because the plane, while flown, was not considered placed in service during the year at issue
TAX PRACTICE MANAGEMENT
2025 tax software survey
AICPA members in tax practice assess how their return preparation software performed during tax season and offer insights into their procedures.
