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IRS called me. Am I going to jail?

There are a lot of phone calls from someone claiming to be from IRS demanding immediate payment. Its a scam. However, IRS can make a phone call, in order : -to secure a delinquent tax return or employment tax payment -to tour a business -when there is an overdue tax...

Independent contractor vs employee

On April 30, 2018 the California supreme court made a ruling establishing a distinction between independent contractors and employees. As a part of its decision, the court instituted the “ABC test” for California that will make it nearly impossible to classify a...

What is Acknowledgment.

Check out a teaser trailer regarding an article below, click here. There is a misunderstanding of what Notary certificates when documents are notarized. Lets break it down and take confusion away. There are two most common notarial acts that are being performed by a...

Serving alcohol at an open house.

Serving alcohol at an open house. Did you know that even though you as an agent want to serve champagne at your open house, your broker have a right to approve or disapprove this action, so check with your broker before you do it! But besides approval from your...

Claiming a minor child. How to split a tax benefits

Claiming a minor child How to split the tax benefits.   Couples get divorce and then there is a question who is claiming a minor child on the tax return. A divorce agreement isn’t enough for the IRS, there is other rules, conditions and forms that need to...

Remodeling house for resale

While working on a blog article regarding home improvements that pay, I came across this post on the www.CAR.org (California Association of Realtors), and simply could not not to share. While remodeling does not really increase your selling price, it definitely...

Capital gains from selling an investment property.

While working on real estate investment properties deals, I get a lot questions like “what is my taxes will be when I sell my investment property, is it true tax is 39%?” Short answer is “NO”, longer answer is “anywhere between 0% and 25%.” Every asset (example an...

W2 excluded from Gross Income for IHSS providers.

This is information for all the WPCS (Waiver personal care services)providers who live with the recipient of the services in the same household. IRS ruled that starting March 1, 2016 that IHSS wages received by IHSS (In home supportive services) providers who live in...

What are ITINs and who needs them?

IRS issue ITIN – Individual Taxpayer Identification Number, to all individuals who are required to have US taxpayer identification number, but do not have or not eligible to get a social security number. This is a 9 digit number that starts with 9 and has 7 or 8...

What is 941 Employer’s Quarterly Tax Return ?

Form 941 is an Employer’s Quarterly Federal Tax Return. Employers use this form  to report income taxes, social security tax, and Medicare tax withheld from employee’s paychecks, and pay the employer’s portion of social security or Medicare tax. This...

Did you have to move for a job? Is this deductible?

This year one of my clients had to move to a different city because he got a job offer, he could not resist. After excitement from landing a dream job went a way, reality of moving his household settled in. My client, let’s call him John Doe is a single taxpayer...

Entertainment expenses deductible at 50%, 80% or 100%?

If you had substantial business discussion or went to a convention with a purpose to further your business,  you can deduct 50% of your business related meals and entertainment expenses. However, there are taxpayers who can deduct 80% and some that are not subject to...

How to decided between entertainment expense and gift?

Generally, if an item can be considered gift or entertainment,  claim it as entertainment. Packaged food, beverages, flowers, etc you give to a customer to use later, treated as gift expense. Tickets to the event, that you attended together must be treated as...

Home office deduction for self employed

So you are self employed, and use part of your home for business. If you use space regularly and exclusively to conduct business you can deduct certain expenses.   Starting 2013 tax year there are two ways of doing it: Simplified option where taxpayer takes $5 per sq...

Tax deductions for teachers.

You are a teacher; you constantly buy supplies for your classroom. Can you deduct any of the expenses? Yes, if you are an eligible educator who is:  a kindergarten through grade 12: Teacher Instructor Counselor Principal, or Aide, and You work at least 900 hours a...

Can I deduct travel expenses for my spouse?

Travel expenses are expenses that occurred while taxpayer was traveling away from their ” tax home”.  “Tax home” is the place where taxpayer conducts business on regularly basis regardless of where he/she lives, but for majority taxpayers...

Can I deduct my coffee?

‘I want to deduct all my meals, oh and please don’t forget coffee “.  All tax professionals hear this way too often. But truth is: NO, you cannot deduct your coffee or lunch or dinner. Generally, tho cost of meals considered a personal expense and...

Can I deduct my acting classes and headshots?

Ever thought of becoming an actor or even better have you child be a star?! And here you go: pay for acting classes and camera coaches, taking headshots, getting and paying manager and agent fees. All those expenses are deductible if you are aggressively pursuing...

Is workers’ compensation taxable?

So you are at work. Working your day away, and unexpected happens: you get injured. You file workers comp (don’t forget to call Victor Sargazy, ESQ), and receive compensation. Do you need to pay tax on this income? In most cases worker’s compensation payments are not...

Can I deduct mortgage interest on my second home?

Mortgage interest is deductible on a tax return if you are itemizing. How much is deductible  depends on when  loan was originated,  what was the amount and how proceeds were used. In most cases, you can deduct all of your home mortgage interest for your primary...

Did you know you can deduct theft losses?

Your theft loss is deductible if you are itemizing, and a subject to reduce loss by $100, and further to 10% of AGI. If you just missing property it’s not enough for deduction, theft needs to be proved! In order to prove theft, one have to file a police report and...

Is buying out-of-state tax-free?

Short answer is NO. Sales tax is applied to ” tangible property”, anything you can see, touch, feel, weight, measure, etc. Californians do not pay sales tax on services. When a consumer pays tax to a retailer- it’s a sales tax, when consumer pays tax...

I paid to a lawyer. Can I deduct his fees?

It depends on a claim you hired attorney for. Legal fees are deductible only if they relate in some clear way to taxable income, thus fees occurred for personal claims are not deductible.  Car accidents or animal bites cases considered to be personal claims, and...

Can I deduct hobby expenses?

Hobby is an activity where primary motivation for engaging into activity is to have fun, not to make profit. Hobby expenses might be deductible. If hobby producing income, then one can deduct expenses associated with a hobby up to the amount of the income; however, a...

Can I deduct job hunting expenses on my tax return?

If you currently employed and looking for another job in your line of work, job hunting expenses such as  cost of attending career fairs and resume preparation, miles driven to and from  and  out of town expenses for the interview or career fair, also fees paid to...