Blog
What to Do When the IRS Sends You “the Letter”
A client received a letter from the I.R.S. several months ago. The letter reminded him that he had not paid his 2016 taxes. He ignored the letter for several weeks, before a second letter arrived; this one with more forceful language. In the second letter, the I.R.S....
The Taxpayer Roadmap
I earned my Masters’ Degree in Taxation in 1997. During my studies, it became quickly apparent the U.S. Tax code is entirely too complex and incomprehensible to the average person. I was reminded of this truth early this year when I came across I.R.S. publication...
Scholarships
Scholarships Given the I.R.S. broad definition of income, it may surprise you that most scholarship awards are not taxable. Scholarships or fellowships that are used for “qualified” tuition or related expenses fall into this category. Awards for tuition, books, fees,...
Introducing Schedule C
So you’ve opened your own business. Congratulations! It takes a lot of courage, organization and commitment to be your own boss. If you are a sole proprietor[2] you now need to be acquainted with I.R.S. Schedule C. Sole proprietors use Schedule C to report profit or...
Estate and Gift Tax for Beginners
Most of us are familiar with paying income or property tax; but have you heard of the gift tax? In most instances, the government does not tax a gift from one person to another. However, in some circumstances, particularly for wealthy individuals, a tax on gifts can...
Self-Employment Tax Basics for Clergy
Self-employment tax is the biggest tax expense for members of the clergy (pastors, bishops, missionaries, priests, ministers etc). In this article, you will learn what is self-employment tax, why you must pay it, what earnings are included in this tax, and how to...
Paying self-employment tax: Should clergy waive rights to pay into (and receive) social security?
If you need to know the basics of self-employment tax, please refer to my post on that topic. This post attempts to help ministers decide whether or not to waive their obligation to pay self-employment taxes. Is it wise? What are the consequences? Certain sects such...
What does it mean to get audited?
The information for this blog article was retrieved from the IRS website: https://www.irs.gov/businesses/small-businesses-self-employed/irs-audits Reasons for an IRS Audit According to the IRS, certain returns are selected for audit because of issues or transactions...
Business Owners: 7 Things Your Tax Professional Wants You to Know During Your First Year
So you want to get your business off to a strong start? You do everything the right way: Purchase bookkeeping software, open a separate bank account for your business, and have a dedicated bank card (not cash) to make all business purchases. What is a big, expensive...
A new deduction for charitable giving 2021
With the Tax Cuts and Jobs Act, the standard deduction was raised to $12,400 for tax year 2020. This means that certain taxpayers who used to give generously to charity to increase their deductions did not really see a benefit on their taxes - the standard deduction...