Vernoia, Enterline + Brewer, CPA LLC

Archive for August, 2016

Couple allowed homesale exclusion following birth of second child

babyThe IRS determined that a married couple could take advantage of the reduced maximum exclusion of gain from the sale of their home after the birth of their second child (LTR 201628002). Unforeseen circumstances were found to be the primary reason for the sale. (more…)

Tax Court allows patent attorney to take business deductions for car restoration

car_restorationThe Tax Court has found that a taxpayer, a patent attorney by trade, was entitled to substantiated business expense deductions stemming from his automobile restoration business, as he intended to make a profit from the activity (R.B. Main, TC Memo. 2016-127). The taxpayer successfully proved that the primary objective of his automobile activity, the restoration and then sale of 1955 and 1956 Plymouth automobiles, was to make a profit under the standards of Code Sec. 183(b). (more…)

How do I? Substantiate meal expenses using the per-diem rate method?

receiptAn employee or self-employed individual is allowed a deduction for the costs of meals and incidental expenses while traveling away from home for business purposes. The deduction of these costs usually requires the substantiation of the costs. However, there is an optional method provided for these taxpayers that avoids keeping receipts. (more…)

FAQ: What is a CPEO

CPEOA professional employer organization (PEO) is an organization that enters into an agreement with a client to perform, among other tasks, the federal employment tax withholding, reporting, and payment functions related to workers performing services for the client. Effective for wages for services performed on or after January 1, 2016, a certified¬†professional employer organization (CPEO) may be treated, for purposes of employment tax liability, as the sole employer of a worksite employee performing services for a customer of the CPEO for remuneration the CPEO paid to the employee. To become a CPEO, a person must apply with the IRS for CPEO treatment and be certified by the IRS as meeting certain requirements. The IRS began accepting applications for CPEO certification in July 2016. (more…)

Crowdfunding: a new resource with developing tax rules

crowdfundIRS Chief Counsel recently examined the tax treatment of crowdfunding activities in a new information letter (Information Letter 2016-36). Crowdfunding is a relatively recent phenomenon, used by an individual or entity to raise funds through small individual contributions from a large number of people. The guidance notes that the income tax consequences to a taxpayer of a crowdfunding effort depend on all the facts and circumstances surrounding that effort. (more…)

Employers, payroll providers prepare for accelerated filing deadlines

w2The Protecting Americans from Tax Hikes Act of 2015 (PATH Act) accelerated the due date for filing Form W-2, Wage and Tax Statement and Form W-3, Transmittal of Wage and Tax Statements, and any returns or statements required by the IRS to report non-employee compensation to January 31. The change is scheduled to take effect for returns and statements required to be filed in 2017. At this time, many employers and payroll providers are reprogramming their systems for the accelerated due date. (more…)