Court Rejects TurboTax Defense

An insurance consultant’s clients are currently primarily accountants. Nonetheless, he prepared his own return for tax years before he had these clients. He admitted to the Tax Court that he made a lot of mistakes when he prepared the return. He claimed payments to...

IRS Announces Health Savings Account Changes for 2018

The IRS has released the 2018 contribution limits for health savings accounts (HSAs), as well as the requirements for high-deductible health plans (HDHPs), since you can only contribute to an HSA if you have health coverage through an HDHP (Revenue Procedure 2017-37,...

Average Itemized Deductions for 2015

The IRS provides a wealth of preliminary tax data for tax year 2015 in the Spring 2017 Statistics of Income Bulletin (SOIB). The data is based on a sample of 257,083 individual income tax returns for 2015, processed between January and late September of 2016, out of a...

Portability Election Relief

Under estate tax rules, if a spouse dies and does not use up his/her entire exemption amount ($5.49 million if death is in 2017), the surviving spouse’s estate can use the balance. This is called the deceased spousal unused exclusion amount (DSUE amount) or...

Back Pay Recovery Can Include Tax Burden

A person who suffers job-related discrimination may be awarded back pay. Recently, a district court said that the award could be increased to account for the person’s tax bill on the recovery (Greg Allen, et al., District Court, Indiana, 4-18-17, No. 1:02-cv-00902)....

Fast Track Settlement Procedures for the Self-Employed

The IRS has long had a fast track settlement program for large and mid-sized businesses to resolve outstanding legal and factual issues in contention through mediation. The IRS had started a similar program for small businesses and self-employed individuals and, over...
LLC Member-Managers Subject to Self-Employment Tax

LLC Member-Managers Subject to Self-Employment Tax

General partners are subject to self-employment tax on their distributive share of partnership interest (Code Sec. 1402(b)). In contrast, limited partners are not subject to self-employment tax on their distributive share (Code Sec. 1402(a)(13); they only pay...