Yep, You Do Pay Taxes on Unemployment

Yep, You Do Pay Taxes on Unemployment
(This is part of a series looking at various common 1040 questions. To go back to the summary page, click here) My wife and I had a short time where we received unemployment benefits. It was not long after I’d received my tax degree, so of course, the first thing that came to mind was “Wait? Do you pay taxes ...

Calculating the IRA Distribution Tax

Calculating the IRA Distribution Tax
(This is part of a series looking at various common 1040 questions. To go back to the summary page, click here) Ads with an asterisks drive me crazy, especially when the other side of the fine print isn’t on the same page (It says it’s free*, but is it “*send in two UPC codes” free or ...

Figuring Out Taxes On Home Sales

Figuring Out Taxes On Home Sales
(This is part of a series looking at various common 1040 questions. To go back to the summary page, click here) For generations, the American Dream has meant a spouse, two kids, a dog, and a house with a white picket fence. But happens when you need to sell part of that dream (The house part! I ...

Capital Gains and Lower Tax Rates

Capital Gains and Lower Tax Rates
(This is part of a series looking at various common 1040 questions. To go back to the summary page, click here) The IRS Capital Gains Tax is one of those political hot topics that could probably send Chris Matthews and Bill O’reilly into a mud wrestling match if the conditions were right (i.e. they’re both shirtless. Good luck getting ...

Dealing with Taxable Refunds

Dealing with Taxable Refunds
(This is part of a series looking at various common 1040 questions. To go back to the summary page, click here) Receiving a tax refund can produce feelings of elation matched only by winning the lottery–very minor lotteries, at least. Heck, the IRS even has an app whose entire purpose is so you can track your Federal refund status when ...

Ordinary vs. Qualified Dividends: Fight!

Ordinary vs. Qualified Dividends: Fight!
(This is part of a series looking at various common 1040 questions. To go back to the summary page, click here) The entertainment world is chocked full of iconic fights through the years: Tyson vs. Holyfield, Batman vs. Superman (or Batman v Superman, for some reason), Kirk vs. Picard. All great clashes. In the tax world, the best we can ...

What is Tax Exempt Interest Income

What is Tax Exempt Interest Income
(This is part of a series looking at various common 1040 questions. To go back to the summary page, click here) Almost all income is taxable, but right near the top of the 1040 the IRS offers a tantalizing possibility: “tax-exempt interest.” How can you make some of that tax exempt interest income flow into ...

1040 Tax Preparation Tips

1040 Tax Preparation Tips
A few months ago I hitched up the ol’ wagon and started a case study that outlined some tips and tricks for filing a business tax return for a sole proprietorship. I finished all I had planned last week. An outline of the study can be found back on my original posting. If you have any additional ...

Tax Implications of Selling a Business – Sole Proprietorship

Tax Implications of Selling a Business - Sole Proprietorship
(NOTE: This is a continuation of a case study looking into tax implications of starting up a small business. Click here to go back to the start) Sole proprietorships are about as easy to set up as a couch–you choose where you want to do business, and you’re good to go. Selling the sole proprietorship is more like ...

What does it mean to materially participate?

What does it mean to materially participate?
(NOTE: This is a continuation of a case study looking into tax implications of starting up a small business. Click here to go back to the start) Considering how many items on a tax return are foreign concepts even after having prepared tax returns for a number of years, the IRS’s apparent need for scare quotes on ...