Alpha’s Tax Tips

Can You Deduct Your Real Estate Losses?

The Service continues to eye returns that report large real estate losses…Especially those taken by taxpayers claiming to be real estate professionals. Real estate pros have to satisfy two-time tests to beat the passive activity loss rules and fully deduct their rental losses. They must spend over half of their working hours and more than […]

Spot the Dirty Dozen Tax Scams

The IRS has issued its annual list of the “Dirty Dozen” tax scams. Strategy: Try to avoid these items. They can land you in hot tax water. Here’s a round-up. Phishing: Watch out for potential fake emails or websites looking to steal personal information. The IRS will never initiate contact with taxpayers via email about […]

Proceed with transportation benefits

The Tax Cuts And Jobs Act (TCJA) eliminated the employer tax deduction for qualified transportation benefits, effective in 2018. Unlike many TCJA changes for individuals, this unfavorable change is permanent. Strategy: Don’t hit the brakes just yet. If certain requirements are met, these benefits are still tax free to employees, within the allowable limits. Thus, […]

IRS Issues Final Guidance on 20% Pass-Through Entity Deduction

One of the most dramatic changes made by the Tax Cuts and Jobs Act enacted in December 2017 was the creation of a new 20% qualified business income (“QBI”) deduction under new Section 199A of the internal Revenue Code (the “Code”). This new provision generally permits the owners of pass-through businesses, such as sole proprietorships, […]

Passports could be revoked for not paying back taxes

The IRS is reminding taxpayers that their passports could be revoked if they don’t pay back taxes.(IR-2019-141, 8/8/19) Under the Fixing America’s Surface Transportation (FAST) Act, the IRS notifies the State Department about taxpayers who are certified as owing a “seriously delinquent tax debt.” Currently, the threshold is $52,000. If a taxpayer has a valid […]

More Online Purchases are hit with Sales Tax

More online purchases are hit with sales tax. Thanks to a landmark Supreme Court case that gives states greater power to impose sales tax on e-commerce. In June, the Court overturned ruling that shielded sellers with no physical presence in the buyer’s home state from collecting sales tax. The Court blessed South Dakota’s internet sales […]

IRS is eyeing early distributions from IRAs

IRS is eyeing early distributions from IRAs…And qualified employer plans such as 401(K)s. The agency wants to make sure that individuals are properly reporting payouts taken before the age 59 ½. The issue is a common IRS Audit red flag. A 2015 review found that 40% of people scrutinized made mistakes, with most coming from […]

Half of all seniors will need long-term care

Half of all seniors will need long-term care at some point, according to government estimates. It can be in-home, assisted living or nursing home care. About one in six will pay $100,000 or more out of their own pockets for long-term-care services. Luckily, the tax code can provide some help for seniors or anyone else […]

Line up an IRA rollover

Suppose you’re getting ready to call it quits or sell your company. The good news is that you’ve accumulated a tidy nest egg in your company retirement plan. The bad news: You will owe a hefty tax bill if you take a lump-sum payout. Strategy: Roll over the plan balance into an IRA. Assuming you […]

Find clothing deduction that fits

Does your business require employees to wear uniforms or other special clothing? Under the Tax Cuts and Jobs Act (TCJA), employees can no longer deduct out-of-pocket expenses for those items. Strategy: Buy uniforms or clothes for employees. The cost is deductible as an ordinary and necessary business expense. Similarly, reimbursements for these expenses are deductible […]