Deductions and Write-Offs
The most frequently asked tax questions related to Deductions and Write-Offs
Gifts - Excess of tax free amount
Asked Wednesday, October 25, 2000 by an anonymous userCPA Answer:
The first $14,000 ($13,000 in 2012) are tax free. The taxes start at 18% and increase to 35%.
The person who makes the gift known as the donor is responsible for paying taxes on the gift on excess of the current years allowance.
If the donor does not pay the tax, the recipient must. If the recipient cannot or does not pay the tax, the IRS can seize the property and sell it to pay the tax.
Gifts are taxed at the same rate as estates.
The person who makes the gift known as the donor is responsible for paying taxes on the gift on excess of the current years allowance.
If the donor does not pay the tax, the recipient must. If the recipient cannot or does not pay the tax, the IRS can seize the property and sell it to pay the tax.
Gifts are taxed at the same rate as estates.
Unpaid child support - Refund withheld
Asked Tuesday, October 24, 2000 by an anonymous userCPA Answer:
Under the law, Federal and State agencies transfer to the IRS the names and Social Security numbers of taxpayers who owe amounts due to child support, loans or taxes.
Your tax refund may be withheld if you are delinquent in child support payments or owe on a student loan.
Your tax refund may be withheld if you are delinquent in child support payments or owe on a student loan.
Can I claim the part of my living room that has my computer as an home office deduction?
Asked Tuesday, October 24, 2000 by an anonymous userCPA Answer:
In general, if you use a part of your home for both personal and business purposes, then no expenses for business use of that part are deductible. There are certain exceptions for the storage of inventory or samples used in a business or for qualified day care providers. You should speak to your local CPA about the "office in home" deductions.
How do I get a Social Security number for my non-resident alien dependent ?
Asked Tuesday, October 24, 2000 by an anonymous userCPA Answer:
You need to fill out Form SS-5-FS, which can be obtained either from your local CPA or from the Social Security Administration. The SSA website is http://www.socialsecurity.gov, . In addition to using the SSA website, you can call SSA toll-free at 1-800-772-1213.
Donated artwork - Appraiser fees
Asked Tuesday, October 24, 2000 by an anonymous userCPA Answer:
The appraisal fees you paid to determine the fair market value of your donated artwork is not deductible as part of the contribution. The fees would be considered a miscellaneous itemized deduction reported on IRS Schedule A, subject to the 2% AGI limitation.
Should I not report the interest income that was reported on Form 1099-INT, that was incorrectly sent to me ?
Asked Thursday, October 19, 2000 by an anonymous userCPA Answer:
In order to avoid any future problems and to avoid any mismatching reports with the IRS, you should include this amount on IRS Schedule B both as a positive and negative amount. Enter the Form 1099-INT amount on Schedule B, line 1 as income. Enter the same amount as a negative adjustment on Schedule B, line 1 and enter "Nominee Distribution" as the negative adjustment description. Speak to your local CPA if you have any questions about the reporting of this incorrect interest.
Is the $300 I won in a charity raffle taxable?
Asked Thursday, October 19, 2000 by an anonymous userCPA Answer:
Money won in a charity raffle is considered gambling winnings and is fully taxable and reportable on your tax return. It it should be indicated on IRS Form 1040, line 21 as other income.
When are business meals and entertainment expenses deductible?
Asked Thursday, October 19, 2000 by an anonymous userCPA Answer:
Generally, meal or entertainment expenses will be deductible with certain limitations as long as the meal or entertainment expenses are "directly related to" or "associated with" the active conduct of your trade or business and are not extravagant or lavish under the circumstances. Deductions are generally limited to 50% of the cost. Detailed recordkeeping should be kept to verify the deductions.
Some locations considereed as entertainment venues are: nightclubs, cocktail lounges, theaters, golf and athletic clubs, country clubs, and sporting events.
Is the yacht rental cost I paid to entertain my customers deductible?
Asked Thursday, October 19, 2000 by an anonymous userCPA Answer:
You may not deduct the cost of renting, maintaining or operating facilities to entertain. Examples of facilities would include yachts, boats, lodges, fishing camps, apartments, hotel suites or homes in a vacation area. The no-deduction rule applies to rent, depreciation, maintenance and operating expenses. It does not apply to the food and beverage costs incurred when entertaining in the facility.