The statute of limitation is the date after which the IRS may not assess additional tax.  The standard statute of limitations is three years and starts on the LATER of the original due date of the return or the date the return is filed.  For individual tax returns, this means... read more →

§6041A creates a requirement for taxpayers engaged in a trade or business to issue a statement to people they pay $600 or more during the tax year for services.  This statement is also filed with the IRS and is called Form 1099-MISC (1099).  There are penalties for failing to issue and file 1099s which... read more →

Self-employed health insurance can be a valuable deduction but it's often missed or reported incorrectly.  Here I lay out the requirements to claiming this deduction. (more…)

The IRS has specific rules regarding which returns a Revenue Agent (RA) can audit.  It all starts with the return that is assigned through the normal audit selection process.  Once assigned, the RA may expand the scope (more…)

If a 1099-MISC (1099) is filed with the IRS and a taxpayer doesn't report that income, the IRS computers may detect the under reporting and send out a notice.  Similarly, a Revenue Agent will reconcile the 1099s to the reported income on the return.  What happens if the 1099 is incorrect? (more…)

I recently saw an article about a Chick-fil-A store about to undergo a 5-month renovation.  The franchisee decided to pay all of his employees their normal wages during the renovation (some even got a raise).  This got me thinking (more…)

Many states allow one business entity type, like a Limited Liability Company (LLC), to convert to a corporation.  This is called a formless conversion.  It makes it easier for business owners wanting to switch because (more…)

The exclusion for gain on sale of your principal residence is widely known among tax practitioners and the public alike.  The concept is fairly easy to grasp - if you live in your home for 2 of the last 5 years you can exclude up to $250k of gain on... read more →

When people divorce, the court issues a document called a divorce decree.  This decree sets the terms of their divorce and, if they have kids, will decide custody arrangements.  The decree will also discuss tax matters, including who gets to claim (more…)