AFS Blog
Waiver of Penalty for Withdrawals from Retirement Accounts??
The Senate relief package that is currently stalled in the Senate has as one of its features a proposal to waive the 10% penalty for early withdrawal of up to $100/000 from qualified retirement accounts for coronavirus-related purposes. Individuals who are eligible...
Tax Treatment of Virtual Currency Charitable Donations
The IRS is beginning to aggressively pursue taxpayers with virtual currency transactions. Some of you may have received a letter from the IRS with varying degrees of threats regarding tax returns filed that show no virtual currency (bitcoin type) transactions when...
Deduction For Mortgage Insurance Premiums Reinstated- RETROACTIVELY
You might recall that the deduction for mortgage insurance premiums died as of Dec 31, 2017. You weren't allowed to claim those premiums as part of your 2018 itemized deductions. Many people missed this because the doubling of the standard deduction (from $6000 to...
Converting Your Business to an S Corporation
There are a number of reasons to convert your business to an S Corporation but the most common is to reduce self-employment (SE) taxes. Any one operating their business as a sole proprietorship or an LLC taxed as a disregarded entity (fancy way of saying sole prop) or...
Add a Home Office to your business return to increase deductible mileage.
A home office can eliminate the 'commuting' portion of your trip, adding additional deductible business miles each day. Is it worth it? You bet. An additional 30 mile round trip can add up to over 4000 additional deductible business miles a year worth almost $900 on...
How to Handle Unfiled Tax Returns
Unfiled tax returns are a common occurrence. Often they come to light when a taxpayer tries to get a mortgage and 2 years of tax returns are needed for the loan application. Sometimes they come to light when an IRS letter is received. Sometimes people just want to...
IRS warns of another Social Security number cancellation scam
We recently heard of a new twist on an old scam where fraudsters call up victims and threaten to cancel their Social Security number if they don't pay their taxes. These scammers claim that they can suspend or cancel a victim's SSN in an attempt to frighten people...
IRS Audits-How do they Choose the Target?
Many believe that returns filed later in the season are less likely to be audited. That's an urban legend. All returns, whenever filed, are scanned for arithmetic errors and scored against top-secret internal algorithms. The higher the score, the more likely the...
IRS auditing small businesses that have reported losses in several consecutive years
Apparently the IRS is focusing on small businesses that have reported losses in 3 or more consecutive years. Letters have gone out for the 2017 tax year advising some taxpayers that their business is being reviewed to determine if their 'business' is actually a hobby....
IRS is now sending letters to taxpayers with virtual currency (Bitcoin) transactions
As part of it's outreach efforts, the IRS is sending letters to some clients with virtual currency transactions advising them of potential failure to report income and pay taxes resulting from currency transactions or advising that transactions may have been reported...
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