Did you Take an Early Distribution from Your Retirement Plan?
Some taxpayers may have needed to take an early distribution from their retirement plan last year. The IRS wants individuals who took an early distribution to know that there can be a tax impact to tapping your retirement fund. Here are ten facts about early distributions. Payments you receive from your Individual Retirement Arrangement before you reach age 59 ½ are generally considered early or premature distributions. Early distributions are usually subject to an additional 10 percent tax. Early distributions must also be reported...
read moreTen Facts for Mortgage Debt Forgiveness
If your mortgage debt is partly or entirely forgiven during tax years 2007 through 2012, you may be able to claim special tax relief and exclude the debt forgiven from your income. Here are 10 facts the IRS wants you to know about Mortgage Debt Forgiveness. Normally, debt forgiveness results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million of debt forgiven on your principal residence. The limit is $1 million for a married person filing a separate return. You...
read moreSeven Tips About Rental Income and Expenses
Do you rent property to others? If so, you’ll want to read the following seven tips from the IRS about rental income and expenses. You generally must include in your gross income all amounts you receive as rent. Rental income is any payment you receive for the use of or occupation of property. Expenses of renting property can be deducted from your gross rental income. You generally deduct your rental expenses in the year you pay them. Publication 527, Residential Rental Property, includes information on the expenses you can deduct...
read moreThey Tried To Deduct What?!
From pornography to emu feathers, here are 10 of the wackiest things taxpayers have tried to deduct. Uncle Sam and the U.S. Tax Court were not amused. Prostitutes Sex with prostitutes is apparently not considered a legitimate medical expense. Who would have guessed?A lawyer from New York kept track of his visits with prostitutes in a journal and tried to deduct their “services” as medical expenses. The whopping $65,934 may have tipped off the IRS to a problem. He also attempted to deduct nearly $5,000 for pornography and sex...
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