The IRS has announced that it will accept that medical residents are exempt from FICA taxes under the student exception in Sec. 3121(b)(10) for periods ending before April 1, 2005.
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TOPICS
Individuals
Final Interim Regulations Issued on Adult Dependent Health Coverage
The IRS, along with the Department of Labor and Department of Health and Human Services, issued interim final regulations for group health plans and health insurers relating to dependent coverage for children under the age of 26
IRS Provides Guidance on Health Coverage for Adult Dependents; Addresses Discrepancies in Law
The IRS issued guidance April 27 on the tax treatment of health coverage for children who have not yet turned 27.
Using a Qualified Plan Account to Fund a Roth IRA Conversion
Recent tax law changes expand the Roth IRA to all taxpayers who have or could have traditional IRA accounts. Determining whether a Roth conversion is the right strategy takes thoughtful consideration.
Court Adopts “Reason to Know” Test for Innocent Spouse Cases
The Sixth Circuit adopted the “reason to know” test for determining whether a taxpayer was eligible for innocent spouse relief from tax liability for an understatement arising out of an erroneous deduction on a tax return.
Tax Court Allows Medical Deduction for Sex Change Operation
In a case of first impression, the Tax Court has held that a taxpayer can take a medical expense deduction for the costs of her sex change operation (O’Donnabhain, 134 T.C. No. 10).
Tax Court Rules on Valuation of Life Insurance Policy in Bargain Sale
The Tax Court held that where the profit-sharing plan of an S corporation wholly owned by the taxpayers distributed to them a life insurance policy on their lives, the taxpayers could not reduce the taxable value of the policy by the amount of the surrender charge for purposes of determining their income from the transfer
Individual Taxation: Digest of Recent Developments
This article covers recent significant developments affecting taxation of individuals, including legislative changes, cases, regulations, and other IRS guidance.
Obtaining Tax Benefits with Health Savings Accounts
The Medicare Prescription drug and Modernization Act established health savings accounts (HSAs), which are aimed primarily at self-employed taxpayers, small business owners, and employees of small to medium-sized firms. Eligible individuals can make tax-deductible contributions into HSA accounts. The earnings inside the HSA are free from federal income tax, and funds can be withdrawn tax free to pay health care costs.
Improved Education Credit Opportunities for High-IncomeTaxpayers
For 2009 and 2010, the American opportunity tax credit provides increased credit amounts for higher education expenses. This article discusses how taxpayers can best take advantage of the credit.
Sec. 475 Mark-to-Market Election
Under Sec. 475(f), taxpayers who are traders of stocks or other securities can make an election to mark to market the stock and securities they own in their capacity as traders at the end of each year.
Proposed Regs. on Basis Reporting by Brokers
The IRS issued proposed regulations relating to how securities brokers report sales to the IRS and how stock basis is determined.
Reel Life in the Tax Classroom: Learning Through Movies
One of the challenges in the tax classroom is to develop students’ ability to recognize when a tax issue exists as a result of a situation/transaction so that the students can then research an answer or planning opportunity and communicate that idea. This column describes a project designed to be used in the first introductory tax class, which accomplishes the learning outcomes described above while engaging Generation Y’s digital interest and desire for collaboration.
A Practitioner’s Guide to theTaxation of Telecommuting
This article discusses how state and local tax laws affect telecommuting and what the federal and state governments can do to prevent taxes from having a negative effect on the growth of the telecommuting movement.
Renewable Energy Tax Incentives
As part of the economic stimulus, federal and state governments are stepping up their efforts to encourage individuals and businesses to take advantage of renewable energy technologies to be more energy efficient. These incentives include income tax incentives, sales or property tax incentives, rebates, grants, loans, industry support, and bonds (these vary by jurisdiction).
Homebuyer Credit, NOL Carrybacks Extended; Mandatory E-Filing Enacted
The Worker, Homeownership, and Business Assistance Act of 2009 contains a handful of tax provisions. These include changes to the first-time homebuyers’ credit, increased NOL carrybacks for small businesses, and mandatory e-filing for most tax return preparers.
Commissioner Announces High-Wealth Taxpayers Group
IRS Commissioner Douglas Shulman addressed the AICPA’s National Tax Conference in Washington, DC, on October 26. During his speech, Shulman announced the formation of a global high-wealth industry group within the IRS’s Large and Mid-Size Business (LMSB) division. This group will centralize and focus the IRS’s compliance efforts involving high-wealth
IRS Finalizes Regs. on Reporting for Discharges of Indebtedness
The IRS has issued final regulations (T.D. 9461) on information returns for cancellation of indebtedness by certain entities under Sec. 6050P.
IRS Memo Allows Taxpayer to Deduct Interest on $1.1 Million Mortgage
The IRS Office of Chief Counsel has issued a memorandum in which it reinterprets the definition of “acquisition indebtedness” to allow a taxpayer to deduct interest on the first $1.1 million of his or her mortgage instead of the usual $1 million limit.
Tax Ramifications of a Foreclosure: A Debtor’s Perspective
The tax ramifications of a foreclosure, from a debtor’s perspective, can best be understood by first exploring the general approach to determining the tax treatment of any particular debt forgiveness event. This approach begins with a twostep process. The first step is to divide the debt into two components: (1) discharged principal and (2) discharged, but previously deducted, accrued unpaid interest (if any). The first step is necessary because the tax treatment applicable to the discharge of principal is generally not the same as the treatment applicable to previously deducted accrued unpaid interest.
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.
