Many employers provide life insurance as a benefit to their employees. This benefit can generate taxable income which must be included in the employees’ W-2s. What is group-term life insurance? Life insurance must meet the following conditions to … [Continue reading]
Partnership Tax: Technical Terminations
A partnership can terminate for federal income tax purposes without the partners knowing it. This is called a technical termination, and can expose the partnership to costly late-filing penalties. What is a technical termination? Technical … [Continue reading]
Self-employment Tax
Employees pay social security and Medicare taxes on their wages. Self-employment (SE) tax is the equivalent tax paid by self-employed individuals. In this post we’ll discuss the rate of SE tax; types of income subject to it; how to report it; … [Continue reading]
Individual Taxes: Withholding, Estimated Payments, and Underpayment of Estimated Tax Penalty
Individuals who owe tax with their Form 1040 or extension might owe more than they expected. The federal income tax is a pay-as-you-go tax. If you wait until you file your return to pay your tax, penalties may apply. There are two ways to pay as you … [Continue reading]
Tax Deductions: Real Estate Professionals and Rental Losses
In a previous post we explained that rental losses are generally considered passive, and may not be deductible against non-passive income. Most individuals can only deduct up to $25,000 of rental losses against non-passive income, and that amount … [Continue reading]
Tax Deductions: Working Away From Home
Deductible travel expenses are the ordinary and necessary expenses of traveling away from home for your business, job or profession. To qualify, the travel must be away from the general area of your tax home for a period substantially longer than an … [Continue reading]