2021 – 12/30 The tax code allows a taxpayer to deduct ordinary and necessary expenses paid or incurred in carrying on a trade or business. In one case, a married couple deducted more than $25,000 in expenses related to an organic farming venture, including startup costs and amortization. They bought acreage and planned to procure USDA certification for organic farming and divide the land into farming rental property. The U.S. Court disallowed deductions related to the farming venture determining that it wasn’t an active trade or business. Although the taxpayers had a business plan for a farming venture, they didn’t complete any of the steps in the plan during the tax year in question. (TC Memo 2021-138)
Similar Posts
Economic Impact Payments
2020 – 08/17 The IRS has reopened the registration period for those who didn’t receive $500-per-child Economic Impact Payments (EIPs) earlier this year. Certain federal benefit recipients are urged to use the IRS’s “Non-Filers tool” from 8/15/20 through 9/30/20 to enter information on their qualifying children to receive the catch-up supplemental payments. Parents eligible to…
Legitimate Business Expenses
2022 – 08/22 Taxpayers who operate a business can generally deduct business-related costs on their income tax returns. But they must keep thorough, contemporaneous records proving that the deductions are for legitimate business expenses. An information technology consultant and handyman deducted the cost of professional education on his return. But the IRS found the amounts…
Getting more for your marketing dollars in 2021
2021 – 01/20 A new year has arrived and, with it, a fresh 12 months of opportunities to communicate with customers and prospects. Like every year, 2021 brings distinctive marketing trends to the table. The COVID-19 pandemic and resulting economic challenges continue to drive the conversation in most industries. To get more for your marketing…
Recovery Rebate Credit
2022 – 01/18 Taxpayers who didn’t receive their third Economic Impact Payment (EIP) may be eligible to claim a 2021 Recovery Rebate Credit on their tax returns based on their 2021 tax year information. The IRS said that individuals may have received their third EIP through initial and “plus-up” payments in 2021. The IRS suggests…
Divorce and Taxes
2022 – 06/22 Taxpayers going through a divorce or legal separation will see changes to their tax situations. But filing status won’t change until there’s a final decree of divorce or separate maintenance. Once a decree is issued, each party should file a new Form W-4 (Withholding Certificate) to ensure proper withholding. If there are…
IRS: COVID Affect
2021 – 09/23 How has the COVID-19 pandemic affected the IRS and taxpayers? IRS Commissioner Charles Rettig answered that question in an overview on the IRS’s website. He noted that “despite our best efforts, pandemic-related issues are still causing us to experience record levels of activity that continue to affect operations, including the processing of…