Federal Income Tax Archives

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…

Truck Driver Not Entitled to Deductions When Records Destroyed

The IRS has a long history of going after truck drivers. There are a number of reasons for this, but, largely it is because of the nature of the expenses that truckers incur. Most truck drivers are small business owners, as they own and operate their own rigs. These small businesses travel, so their expenses…

Defining “Home” for Tax Purposes: It’s Not Always Where You Live

Typically the common definition of terms is used. This helps those who are not lawyers to understand and follow the law. But there are instances where the legal definition of a common term differs from the common understanding of what the term means. The tax law has several of these. When it comes to taxes,…

Tax on Real Estate Purchase Price Reduction

The term “income” is broad. It includes just about any money or gains that a person receives. There are exceptions, however. Take the purchase price reduction. Assume Party A sells a property to Party B for $100. Party A will likely have a gain on the sale. The gain is income and may trigger income…