Category Archives: Income Tax

Too Young to File – or the Tax Virgin!

Today TaxMama hears from Monique in California who tells us. “I am a student, living at home with my parents (they are still claiming me as a dependant). But I do work less than 20 hours (usually earning less than $160). Do I still have to file taxes?”

Divorce Asset Split

Today TaxMama hears from Matthew in California who tells us. “My dad is going through a divorce. They have finally reached an agreement on what her half of the house, stocks, retirement, etc. is worth. He is paying her $xxx,xxx.00 and he is re-financing the house to do it. Who has to pay income taxes […]

AMT Patch Passes Congress

courtesy of: David & Mary Mellem, EAs & Ashwaubenon Tax Professionals Congress has finally agreed on an AMT patch for years beginning in 2007. President Bush has indicated he plans to sign the bill. The bill is titled the “Tax Increase Prevention Act of 2007”. There are two parts to the bill: 1) The tax […]

Roommates and Taxes

Today TaxMama hears from Shawn in North Dakota who is worried: “I just purchased a home as my primary residence. Several people live in this home and pay a monthly amount to help cover the mortgage. Am I required to report this as rental income even though this is my primary residence? I believe if […]

Reporting Miscellaneous Income

FS-2007-26, November 2007 – Courtesy of the Internal Revenue Service While most people are aware they must include wages, salaries, interest, dividends, tips and commissions as income on their tax returns, many don’t realize that they must also report most other income, such as: cash earned from side jobs, barter exchanges of goods or services, […]

House Bill Provides Low-Income Tax Benefit, Amt Fix

Courtesy of The National Women’s Law Center www.nwlc.org Bill Closes Private Equity Tax Loophole to Pay for Changes (Washington, D.C.) The U.S. House is expected to vote Friday on a bill that promotes tax fairness and fiscal responsibility by expanding eligibility for the refundable child tax credit, temporarily fixing the alternative minimum tax, and closing […]

Poker Tournament Winnings Must be Reported to the IRS

IR-2007-173, Oct. 19, 2007 [Courtesy of the Internal Revenue Service] WASHINGTON — Starting next year, casinos and other sponsors of poker tournaments will be required to report most winnings to winners and the Internal Revenue Service, according to the IRS. The new requirement, which goes into effect on March 4, 2008, was contained in guidance […]

No Notary

Today TaxMama hears from Mark from Brooklyn, who asks, “is income from a notary public considered income for the EIC (the Earned Income Credit)? Most people I asked, said at their first instinct that, yes it is. But when I make them aware that this income is exempt from self-employed tax (not income tax) they […]

New Fact Sheet for Reporting Auction Income

[TaxMama note: think eBay.com and epage.com ] Courtesy of IRS Many people don’t realize the income they earn from auctions and consignment sales may be taxable. A new IRS Fact Sheet helps taxpayers better understand what income they are required to report and what deductions they may be entitled to take. http://www.irs.gov/newsroom/article/0,,id=174478,00.html [See Resource Box […]

Doctors Billing

Today we hear from a doctor’s wife, with a common problem, (note: I can’t find the original question, so I hope you read this reply.) “We have a couple of doctors who use my husband’s physician number to bill insurance companies and Medicare for services. When we receive the money, we pay it over to […]

Recent IRS Revenue Procedures

Revenue Procedure 2007-59 that permits certain partnerships to aggregate gains and losses from an expanded class of qualified financial assets for purposes of making reverse § 704© allocations under § 1.704-3(e)(3) of the Income Tax Regulations. http://www.irs.gov/pub/irs-drop/rp-07-59.pdf Revenue Procedure 2007-63 updates the rules for determining the amount of an employee’s ordinary and necessary business expenses […]

LLC and SE Income

Today we hear from Dave in Idaho who tells us, “Some of my friends have a rather successful business formed as an LLC. Their CPA told them that they could file as a partnership and not report any self-employment income, even though they are all actively working in their business. Is this true? And where […]