Federal Income Tax Archives

Refunds After Innocent Spouse Relief Granted

Married couples who file joint tax returns are both liable for any deficiencies or underpayments. But if one spouse qualifies as an “innocent spouse,” they can be relieved of the tax burden. An important question arises – if an innocent spouse previously paid the joint tax debt, are they entitled to a full refund? A…

Litigation Settlements & the Limiting Deductions Involving Fraud

Our tax system is based on an arbitrary calendar or fiscal year. It measures income and expense and applies various rules based on this arbitrary period of time. This can create complications, as the arbitrary time may not capture the true essence of what is going on. Take the case of civil litigation where the…

Income Tax Consequences for Gift Cards

Gift cards remain a popular offering, with sales exceeding $200 billion annually. But when must retailers recognize income from gift card sales for tax purposes? Can related deductions be taken immediately, or only as gift cards are redeemed over time? Get it wrong, and businesses face cash flow headaches or penalties. The IRS Office of…

Reporting ESPPs and ISOs to the IRS: What You Need to Know

Stock acquired as part of an employee stock purchase plan (ESPP) and incentive stock options (ISO) can have significant tax consequences for the recipient employee. If you don’t know what these plans are, you are not alone. You probably have no reason to know about these concepts unless you or a family member work for…

Is Alimony Tax Deductible & Related Tax Disputes Involving Alimony

Alimony can be a complicated and contentious issue in divorce proceedings, particularly when it comes to taxes. If payments qualify as alimony pursuant to federal tax law, the payments may be tax deductible by the payor spouse and included in gross income to the payee spouse. Conversely, if the amounts are not alimony for federal…

IRS Recognizes Employee Tool and Equipment Plans

Employee Tool and Equipment Plans have become increasingly prevalent in industries where employees require specialized tools and equipment to perform their job effectively. These plans benefit both employers and employees by providing access to necessary resources and reducing the cost burden on employees. There are tax implications to consider, and mistakes can be made if…

Tax Issues Faced by Pilots & Transportation Employees

The U.S. tax system applies to U.S. citizens no matter where they are in the world. Our tax laws also provide various limitations, exclusions and other benefits based on where the person is when the income is received or expense is incurred. If the assumptions of a static taxpayer who doesn’t travel or move around…

Innocent Spouse Relief for Ex-Spouse’s Income

Divorce is a stressful situation. It is one where people do not always act as they should. This includes taking actions that caused or led up to the divorce. Right or wrong, the shared finances of marriage often come into play. This results in additional marital disputes. Innocent spouse relief can provide a much-needed remedy…

A Look at Tax Legislation: What’s On the Table

Tax laws play a crucial role in shaping the economic landscape of a country, and the United States is no exception. Currently, there are several tax laws being considered by Congress, each with the potential to impact millions of Americans. From addressing the taxation of cryptocurrency to implementing new tax credits, these measures can range…

Tax on Insurance Agent’s Repayment of Advanced Commissions

As a service provider, you might receive an advance payment from a party who pays for your services, which could be considered income subject to taxation. But what if you might have to repay those funds later? Are you still taxed on the advance payment in year one? The answer to this question can have…