The tax code allows a taxpayer to deduct ordinary and necessary expenses paid or incurred in carrying on a trade or business. In one case, a married couple deducted more than $25,000 in expenses related to an organic farming venture, including startup costs and amortization. They bought acreage and planned to procure USDA certification for […]

How do you determine if a worker is an employee or an independent contractor? The IRS Office of Federal, State, and Local Government recently held a webinar to answer that question. Worker classification is determined by the relationship between a worker and the business, and whether the business can control how tasks are performed. A

Businesses should use Form 1099-NEC, “Nonemployee Compensation,” to report payments of $600 or more to nonemployees during 2021. Be aware that such payments could be subject to backup withholding in certain cases. Payers of nonemployee compensation during 2021 generally are required to file these forms by Jan. 31, 2022. Backup withholding could apply if the recipient

The U.S. Tax Court ruled that a married couple’s miniature donkey breeding activity was conducted with a profit motive. The IRS had earlier determined it was a hobby and the couple was liable for taxes and penalties for the two tax years in which they claimed losses of more than $130,000. However, the court found

Is the security of taxpayer data threatened as many IRS employees work remotely, due to COVID-19? The Treasury Inspector General for Tax Administration (TIGTA) recently looked at how well the IRS has addressed the risks related to telework. Measures taken to enhance security include using virtual private networks with two-factor authentication for telework, the IRS

No date has been set for when taxpayers can begin to electronically file 2021 tax returns, but the IRS said it will be announced in the near future. The season typically begins in late January. Before e-filing can begin, IRS systems must be configured to process the previous year’s returns, and changes to tax forms

It’s a new year and you may be wondering about the fate of the Build Back Better Act (BBBA). Senate Democrats were unable to muster the votes to pass the bill late last year, and that resulted in the end of the advance Child Tax Credit (CTC) payment program. Senate Majority Whip Dick Durbin (D-IL)

The IRS is mailing letters to taxpayers who received monthly advance Child Tax Credit (CTC) payments in 2021. The letters will help parents anticipate any remaining credit to be paid this year and provide a record of amounts paid in 2021. As part of the American Rescue Plan Act, half of the CTC amount that

The IRS is providing disaster tax relief to victims of the recent Colorado wildfires. The tax agency announced that the relief applies to taxpayers who live or have a business in Boulder County. In addition, the IRS will work with taxpayers who don’t live or have a business in Boulder County but whose tax records