Five Tax Tips for Gambling Income and Losses

Report any gambling winnings as income on your tax return. Be sure you itemize to deduct gambling losses up to the amount of your winnings. If you are a casual gambler, these tax tips can help:

Gambling income.  Income from gambling includes winnings from the lottery, horse racing and casinos. It also includes cash and non-cash prizes. You must report the fair market value of non-cash prizes like cars and trips.

Payer tax form.  If you win, the payer may give you a Form W-2G, Certain Gambling Winnings. The payer also sends a copy of the W-2G to the IRS. The payer must issue the form based on the type of gambling, the amount you win and other factors. You’ll also get a form W-2G if the payer must withhold income tax from what you win.

How to report winnings.  You normally report your winnings for the year on your tax return as “Other Income.” You must report all your gambling winnings as income. This is true even if you don’t get a Form W-2G.

How to deduct losses.  You can deduct your gambling losses on Schedule A, Itemized Deductions. The total you can deduct, however, is limited to the amount of the gambling income you report on your return.

Keep gambling receipts.  Keep records of your wins and losses. This means keeping items such as a gambling log or diary, receipts, statements or tickets.

Courtesy of IRS

For more information contact Neikrik. Mahoney and Smith at 502-896-2999

Home Energy Tax Credits Save You Money at Tax Time

Certain energy-efficient home improvements can cut your energy bills and save you money at tax time.
Residential Energy Efficient Property Credit

This tax credit is 30 percent of the cost of alternative energy equipment installed on or in your home.
Qualified equipment includes solar hot water heaters, solar electric equipment, wind turbines and fuel cell property.
Qualified wind turbine and fuel cell property must be placed into service by Dec. 31, 2016. Hot water heaters and solar electric equipment must be placed in to service by Dec. 31, 2021.
The tax credit for qualified fuel cell property is limited to $500 for each one-half kilowatt of capacity. The amount for other qualified expenditures does not have a limit. If your credit is more than the tax you owe, you can carry forward the unused portion of this credit to next year’s tax return.

Courtesy of IRS

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

New Procedure for Retirement Plan Rollovers

The Internal Revenue Service today provided a self-certification procedure designed to help recipients of retirement plan distributions who inadvertently miss the 60-day time limit for properly rolling these amounts into another retirement plan or individual retirement arrangement (IRA).

In Revenue Procedure 2016-47, posted today on IRS.gov, the IRS explained how eligible taxpayers, encountering a variety of mitigating circumstances, can qualify for a waiver of the 60-day time limit and avoid possible early distribution taxes. In addition, the revenue procedure includes a sample self-certification letter that a taxpayer can use to notify the administrator or trustee of the retirement plan or IRA receiving the rollover that they qualify for the waiver.

A taxpayer who missed the time limit will now ordinarily qualify for a waiver if one or more of 11 circumstances, listed in the revenue procedure, apply to them. They include a distribution check that was misplaced and never cashed, the taxpayer’s home was severely damaged, a family member died, the taxpayer or a family member was seriously ill, the taxpayer was incarcerated or restrictions were imposed by a foreign country.

Courtesy of IRS

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

Before you hire an accountant...

Every dollar counts for business owners, so if you don't know where you stand on a monthly basis, you may not be around at the end of the year. And while using do-it-yourself accounting software can help monitor costs, the benefits of hiring good accountants extend far beyond crunching numbers.

Before you hire one though, make sure you understand the four basic areas of expertise in a general accounting practice:

Business advisory services. Since an accountant should be knowledgeable about your business environment, your tax situation and your financial statements, it makes sense to ask them to pull all the pieces together and help you come up with a business plan and personal financial plan.

Accounting and record-keeping. These are perhaps the most basic of accounting disciplines. While it makes sense for many business owners to manage their day-to-day records, an accountant can help set up bookkeeping and accounting systems and show you how to use them. A good system allows you to evaluate profitability and modify prices.

Tax advice. Accountants that provide assistance with tax-related issues usually can do so in two areas: tax compliance and tax planning.

Auditing. These services are most commonly required by banks as a condition of a loan. There are many levels of auditing, ranging from simply preparing financial statements to an actual audit.

The best way to find a good accountant is to get a referral from your attorney, your banker or a business colleague. You can also check in with the Society of Certified Public Accountants in your state, which can make a referral.

Courtesy of Entrepreneur

For more information contact Neikrik, Mahoney and Smith at 502-896-2999

Divorce and your taxes

If you are divorcing or recently divorced, taxes may be the last thing on your mind. However, these events can have a big impact on your wallet. Alimony and a name or address change are just a few items you may need to consider. Here are some key tax areas to keep in mind.

Child Support.
Alimony Paid.
Alimony Received.
Spousal IRA.
Name Changes.
Special Marketplace Enrollment Period.
Changes in Circumstances.
Shared Policy Allocation.

For more information contact Neikrik, Mahoney and Smith at 502-896-2999

Courtesy of IRS

3 ways to help reduce next years tax bill.

By far, the best way to lower your taxes is to save more for your retirement. Not only do you get a lower tax bill now, you're also creating your own financial security in the process.

Saving money in tax-deferred retirement accounts such as a traditional IRA or 401(k) can reduce your taxable income by quite a bit. You could qualify for up to $5,500 in tax-deferred contributions to a traditional IRA for the 2016 tax year, and an additional $1,000 if you're 50 or older.

There are several tax breaks that come along with homeownership, and they can combine to save you a good chunk of money on your taxes. These include:

Mortgage interest
Mortgage insurance premiums
Property taxes
"Points" you pay to obtain a mortgage
The most widely known benefit is the mortgage interest deduction. If you itemize deductions on your tax return, you can write off the interest you pay on mortgage debt on a first and second home, on up to $1 million in original mortgage balances. In addition to the interest, you can also include any mortgage insurance premiums you're required to pay.

Another great way to save on your taxes is to contribute to causes near and dear to you. The IRS lets itemizers deduct donations to qualified non-profit organizations and charities, including cash donations as well as property.

Keep in mind you'll need to be able to document your donations, and the documentation requirements are stricter for higher-valued donations. For example, a simple receipt with the charity's name is just fine for property valued at less than $250. However, if you donate say, a car or boat worth more than $5,000, a professional appraisal is required.

These three things can trim thousands of dollars off your tax bill, but the benefits don't stop there. By aggressively saving and investing for retirement, you can help ensure your own financial security later in life. Buying a home can lock in your housing payment, while all of your rent-paying friends watch theirs increase every year. And finally, charitable giving can benefit organizations and people in need in infinite possible ways.

Courtesy of USAToday

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

New Sharing Economy Resource Center

The Internal Revenue Service this week launched a new web page designed to help taxpayers involved in the sharing economy quickly locate the resources they need to help them meet their tax obligations.
The sharing economy typically describes situations where the Internet is used to connect suppliers willing to provide services or use of assets — apartments for rent, cars for transportation services, etc. — to consumers. These platforms are also used to connect workers and businesses for short-term work.
To help people meet their tax reporting responsibilities, the new Sharing Economy Resource Center offers tips and resources on a variety of topics ranging from filing requirements and making quarterly estimated tax payments to self-employment taxes and special rules for reporting vacation home rentals. In addition, tax-preparation software can be a helpful resource in this area, and a trusted tax professional may assist with many issues.

Courtesy of IRS

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

Accounting tips for Small Business

Keep it separate.
By keeping separate bank and credit card accounts for business and personal, you’ll save yourself hours of work and make it easy to keep track of deductible expenses in one place.
Call in a pro.
An accountant will almost always find more deductions and keep you penalty-free.
Pencil it in.
Set aside about 15 minutes every week to organize your finances, and don’t let other things take priority during this time.  You’ll have more insights into your business, be able to make more informed financial decisions and have everything organized when tax time approaches.
Consider your people.
Whether you’re paying a full staff or you’re the only one on the payroll, make sure you’re tracking the costs of wages, benefits, overtime and any other costs associated with labor. By tracking your spending on labor, perks and benefits, you may find you have more money to incentivize your employees — or that you’re outspending your budget.
Don’t forget to get paid.
If you’re not keeping proper records that you can make sense of at a glance, it could be months before you realize you have outstanding invoices. You could be collecting payments late, or missing some altogether. Make sure you’re properly tracking all payments due and recording when each invoice is paid, how long customers generally take to pay, and which customers you’ve had difficulties collecting payments from in the past.

Courtesy of Forbes

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

IRS Warns of Back-to-School Scams

 
The Internal Revenue Service today warned taxpayers against telephone scammers targeting students and parents during the back-to-school season and demanding payments for non-existent taxes, such as the “Federal Student Tax.”

People should be on the lookout for IRS impersonators calling students and demanding that they wire money immediately to pay a fake “federal student tax.” If the person does not comply, the scammer becomes aggressive and threatens to report the student to the police to be arrested. As schools around the nation prepare to re-open, it is important for taxpayers to be particularly aware of this scheme going after students and parents.

The IRS encourages college and school communities to share this information so that students, parents and their families are aware of these scams.

Scammers are constantly identifying new tactics to carry out their crimes in new and unsuspecting ways.

If you receive an unexpected call from someone claiming to be from the IRS, here are some of the telltale signs to help protect yourself.

The IRS Will Never:

1. Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. Generally, the IRS will first mail you a bill if you owe any taxes.
2. Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
3. Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
4. Ask for credit or debit card numbers over the phone.

Courtesy of IRS

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Understanding Affordable coverage and Minimum Value coverage

Here is information to help you understand affordable coverage and minimum value coverage.

Affordable coverage: If the lowest cost self-only only health plan is 9.5 percent or less of your full-time employee’s household income then the coverage is considered affordable. Because you likely will not know your employee’s household income, for purposes of the employer shared responsibility provisions, you can determine whether you offered affordable coverage under various safe harbors based on information available to you.

Minimum value coverage: An employer-sponsored plan provides minimum value if it covers at least 60 percent of the total allowed cost of benefits that are expected to be incurred under the plan.

Under existing guidance, employers generally must use a minimum value calculator developed by the Department of Health and Human Services and the IRS to determine if a plan with standard features provides minimum value. Plans with nonstandard features are required to obtain an actuarial certification for the nonstandard features. The guidance also describes certain safe harbor plan designs that will satisfy minimum value.

Courtesy of IRS

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

Tax Time and your Vacation Home

Renting out a vacation property to others can be profitable. If you do this, you  must normally report the rental income on your tax return. You may not have to report the rent, however, if the rental period is short and you also use the property as your home. Here are some tips that you should know:

You usually report rental income and rental expenses on Schedule E, Supplemental Income and Loss. Your rental income may also be subject to Net Investment Income Tax.

If the property is “used as a home,” your rental expense deduction is limited. This means your deduction for rental expenses can’t be more than the rent you received.

If you personally use your property and also rent it to others, special rules apply. You must divide your expenses between rental use and personal use. To figure how to divide your costs, you must compare the number of days for each type of use with the total days of use.

Personal use may include use by your family. It may also include use by any other property owners or their family. Use by anyone who pays less than a fair rental price is also considered personal use.

If the property is “used as a home” and you rent it out fewer than 15 days per year, you do not have to report the rental income. In this case you deduct your qualified expenses on Schedule A.

Courtesy for IRS

For more information contact Neikirk, Mahoney and Smith 502-896-2999

IRS Provides Tax Relief to Louisiana Storm Victims

 Louisiana storm victims will have until Jan. 17, 2017, to file certain individual and business tax returns and make certain tax payments, the Internal Revenue Service announced today. All workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization also qualify for relief.

Following this week’s disaster declaration for individual assistance issued by the Federal Emergency Management Agency (FEMA), the IRS said that affected taxpayers in East Baton Rouge, Livingston, St. Helena and Tangipahoa parishes will receive this and other special tax relief. Other locations in Louisiana and other states may be added in coming days, based on damage assessments by FEMA.

Courtesy of IRS

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

Starting a business?

Understanding your tax obligation is one key to business success. When you start a business, you need to know about income taxes, payroll taxes and much more. Here are five IRS tax tips that can help you get your business off to a good start:

Business Structure. An early choice you need to make is to decide on the type of structure for your business.

Business Taxes.  There are four general types of business taxes. They are income tax, self-employment tax, employment tax and excise tax. In most cases, the types of tax your business pays depends on the type of business structure you set up.

Employer Identification Number (EIN).  You may need to get an EIN for federal tax purposes.

Accounting Method.  An accounting method is a set of rules that you use to determine when to report income and expenses. You must use a consistent method.

Employee Health Care.  The Small Business Health Care Tax Credit helps small businesses and tax-exempt organizations pay for health care coverage they offer their employees.

Courtesy of IRS

For more information contact Neikrik, Mahoney and Smith at 502-896-2999

New Phishing Scheme Mimics Software Providers

The Internal Revenue Service today alerted tax professionals to an emerging phishing email scam that pretends to be from tax software providers and tries to trick recipients into clicking on a bogus link.

The email scheme is the latest in a series of attempts by fraudsters to use the IRS or other tax issues as a cover to trick people into giving up sensitive information such as passwords, Social Security numbers or credit card numbers or to make unnecessary payments.

In the new scheme identified as part of the IRS Security Summit process, tax professionals are receiving emails pretending to be from tax software companies. The email scheme requests the recipient to download and install an important software update via a link included in the e-mail.

Once recipients click on the embedded link, they are directed to a website prompting them to download a file appearing to be an update of their software package.  The file has a naming convention that uses the actual name of their software followed by an “.exe extension.”

Upon completion, tax professionals believe they have downloaded a software update when in fact they have loaded a program designed to track the tax professional’s key strokes, which is a common tactic used by cyber thieves to steal login information, passwords and other sensitive data.

Courtesy of IRS

For more information contact Neikrik, Mahoney and Smith at 502-896-2999

Highway Use Tax Return Is Due Aug. 31

The Internal Revenue Service  reminds truckers and other owners of heavy highway vehicles that in most cases their next federal highway use tax return is due Wednesday, Aug. 31, 2016.

The deadline generally applies to Form 2290 and the accompanying tax payment for the tax year that begins July 1, 2016, and ends June 30, 2017. Returns must be filed and tax payments made by Aug. 31 for vehicles used on the road during July. For vehicles first used after July, the deadline is the last day of the month following the month of first use.

Courtesy of IRS

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

Tax Deductions you might Forget

Few realizations are more painful than realizing that you forgot to include a tax deduction that would have lowered your tax bill or increased your tax refund on your tax return. Here are some tax deductions that you shouldn't overlook.

 Sales Taxes
You have the option of deducting sales taxes or state taxes off your federal income tax. In a state that doesn’t have its own income tax, this can be a big money saver

 Health Insurance Premiums
Medical expenses can blow any budget, and the IRS is sympathetic to the cost of insurance premiums – at least in some cases. For most taxpayers, medical expenses have to exceed 7.5 percent of your adjusted gross income to be deducted.

 Tax Savings for Teacher
It’s the rare teacher who doesn’t have to reach into her own pocket every now and then to purchase items needed for the classroom. It allows qualified K-12 educators to deduct up to $250 for materials.

 Paying the Babysitter
You might be able to deduct the cost of a babysitter if you’re paying her to watch the kids while you volunteer to work for no pay for a recognized charity.

 Lifetime Learning
The Lifetime Learning credit can provide up to $2,000 per year, taking off 20 percent of the first $10,000 you spend for education after high school in an effort to give you new or improved job skills.

 Unusual Business Expenses
If something is used to benefit your business and you can document the reasons for it, you generally can deduct it off your business income.

 Looking for Work
Losing your job is traumatic, and the cost of finding a new one can be high. But if you’re looking for a job in the same field, you itemize your deductions and these expenses exceed 2 percent of your gross income, any expenses over that threshold can be deducted.

 Self-employed Social Security
You have to pay 15.3 percent of your income for social security taxes, the portions ordinarily paid by both employee and employer. But there's one small consolation – you do get to deduct the 7.65 percent employer portion off your income taxes.

Courtesy of TurboTax

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

Accounting tips for New Small Business

Keep it simple starting out. The simplest form of entity for running your first business is called a sole proprietorship. This form of ownership requires NO special communication or filings to the Internal Revenue Service until you start paying employees.

As a sole proprietor you are the owner/entity which might require only to acquire an occupational license if your county or municipality mandates one. As the owner, you are also liable to remit all state or city tax collections on retail or wholesale sales your business collects. Service businesses and most cross state sales are exempt from state tax collections.

If you are concerned about personal liability as a sole proprietorship then do the cheapest and simplest thing which is to buy a personal liability umbrella policy. The best way to avoid liability is to learn your trade well and keep accurate records.

Over 90% of small businesses fail or change ownership within the first five years. Plan your business to thrive but if it fails under a sole proprietor you simply stop doing business. No communication or special forms with the IRS, no additional taxes to get your investment returned and no high accounting fees to close out your entity.

Concentrate on building your business not communicating with the IRS. As a sole proprietor, the IRS will not even know you exist until after you file your first personal income tax return. This return will include a Schedule C which communicates all of the sales and expenses you recorded.

Courtesy of LessAccounting

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

Identity Theft and Your Taxes

Tax-related identity theft normally occurs when someone uses your stolen Social Security number to file a tax return claiming a fraudulent refund. Many people first find out about it when they do their taxes.

The IRS is working hard to stop identity theft with a strategy of prevention, detection and victim assistance.

The Taxes. Security. Together. awareness campaign is an effort to better inform you about the need to protect your personal, tax and financial data online and at home.

Keep your Social Security card at home and not in your wallet or purse. Only provide your Social Security number if it’s absolutely necessary.

Criminals often try to impersonate your bank, your credit card company, even the IRS in order to steal your personal data. Learn to recognize and avoid those fake emails and texts

If you cannot e-file your return because a tax return already was filed using your SSN, consider the following steps: • File your taxes by paper and pay any taxes owed. • File an IRS Form 14039 Identity Theft Affidavit. Print the form and mail or fax it according to the instructions. You may include it with your paper return. • File a report with the Federal Trade Commission using the FTC Complaint Assistant; • Contact one of the three credit bureaus so they can place a fraud alert or credit freeze on your account.

If the IRS identifies a suspicious tax return with your SSN, it may send you a letter asking you to verify your identity by calling a special number or visiting a Taxpayer Assistance Center.

If you are a confirmed ID theft victim, the IRS may issue an IP PIN. The IP PIN is a unique six-digit number that you will use to e-file your tax return.

If you suspect or know of an individual or business that is committing tax fraud, you can visit IRS.gov and follow the chart on How to Report Suspected Tax Fraud Activity.

Courtesy of IRS

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

IRS Works to Help Taxpayers Affected by ITIN Changes

 
The Internal Revenue Service today announced important changes to help taxpayers comply with revisions to the Individual Taxpayer Identification Number (ITIN) program made under a new law. The changes require some taxpayers to renew their ITINs beginning in October.

The new law will mean ITINs that have not been used on a federal tax return at least once in the last three years will no longer be valid for use on a tax return unless renewed by the taxpayer. In addition, ITINs issued prior to 2013 that have been used on a federal tax return in the last three years will need to be renewed starting this fall, and the IRS is putting in place a rolling renewal schedule, described below, to assist taxpayers.

If taxpayers have an expired ITIN and don’t renew before filing a tax return next year, they could face a refund delay and may be ineligible for certain tax credits, such as the Child Tax Credit and the American Opportunity Tax Credit, until the ITIN is renewed.

The ITIN changes are required by the Protecting Americans from Tax Hikes (PATH) Act enacted by Congress in December 2015. These provisions, along with new procedures to help taxpayers navigate these changes, are outlined in IRS Notice 2016-48, which was released today.

Courtesy of IRS

For more information contact Neikirk, Mahoney and Smith at 502-8960-2999

Avoid these 5 financial mistakes

Mistake #1: Getting A Late Start On Saving.
More than any other single error, I'd say this is the one that prevents people from attaining at least a measure of financial security. For example, in a recent survey of retirees by Pentegra Retirement Services 39% of those polled said they regretted not having started saving sooner, and 63% said the most important advice they could offer to people starting out would be to get an early start on saving.
The oldsters know what they're talking about. A 25-year-old earning $30,000 who saves 10% of salary a year would have a nest egg of just over $620,000 at 65, assuming 2% annual raises and a 6% annual return on investments. If that person holds off just five years, the size of the nest egg falls by almost $140,000. Waiting 10 years shrinks it by more than $250,000.

Mistake #2: Taking on unnecessary debt.
Sometimes it makes sense to borrow -- say, to buy a house, purchase a car or finance an education that can increase your earning power. But it's the debt we take on to maintain a lifestyle that exceeds our earning power that gets us in trouble.
And make no mistake, paying down debt can strain your budget. According to NerdWallet's latest annual survey on consumer debt, the average household is shelling out more than $6,650 in interest payments alone per year.

Mistake #3: Buying into Wall Street's 'investing is complicated' mantra.
The message investors get from many Wall Street firms boils down to this: You need to watch the financial markets constantly, spread your money among all sorts of arcane and complex investments and be ready at a moment's notice to dump what you own for new investments. And, of course, to pull off all this successfully, you need their help, for which you must pay a handsome price.
Nonsense. No one, not even market pros, can consistently outguess the financial markets. And research by University of California at Berkeley finance professor Terrance Odean shows that trying to do so by frequent trading is more likely to hurt than enhance your returns.

Mistake #4: Overpaying for financial help.
Whether it's the annual expenses you pay to a mutual fund manager or the fees you shell out to an adviser to help you choose the right funds and provide other financial advice, the fact is that paying more than you have to drags down the returns you earn and makes it harder for your savings to grow. Which is why it makes sense to hold the line on such costs as much as possible.
When it comes to investments, the easiest way to rein in expenses is to stick as much as possible to low-cost index funds and ETFs. Doing so can easily save you upwards of 1% a year compared with the typical stock mutual fund.

Mistake #5: Failing to monitor your progress.
You don't have to (and shouldn't) constantly obsess about money matters. But neither can you just set a course and then assume all will be fine going forward. You need to periodically review your finances -- say, once a year or so -- to ensure you're making headway.
The most comprehensive gauge of whether you're making progress is to track your net worth -- that is, the difference between the value of your assets and liabilities, or what you own vs. what you owe.

Courtesy of CNN

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

IRS Warns Taxpayers of Summer Surge in Automated Phone Scam Calls

The Internal Revenue Service today warned taxpayers to stay vigilant against an increase of IRS impersonation scams in the form of automated calls and new tactics from scammers demanding tax payments on iTunes and other gift cards.

The IRS has seen an increase in “robo-calls” where scammers leave urgent callback requests through the phone telling taxpayers to call back to settle their “tax bill.” These fake calls generally claim to be the last warning before legal action is taken. Once the victim calls back, the scammers may threaten to arrest, deport or revoke the driver’s license of the victim if they don’t agree to pay.

“It used to be that most of these bogus calls would come from a live-person. Scammers are evolving and using more and more automated calls in an effort to reach the largest number of victims possible,” said IRS Commissioner John Koskinen. “Taxpayers should remain alert for this summer surge of phone scams, and watch for clear warning signs as these scammers change tactics.”

In the latest trend, IRS impersonators are demanding payments on iTunes and other gift cards. The IRS reminds taxpayers that any request to settle a tax bill by putting money on  any form of gift card is a clear indication of a scam.

Courtesy of IRS

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

Selling your Home and Taxes

Usually, profits you earn are taxable. However, if you sell your home, you may not have to pay taxes on the money you gain. Here are ten tips to keep in mind if you sell your home this year.
Exclusion of Gain.  You may be able to exclude part or all of the gain from the sale of your home. This rule may apply if you meet the eligibility test.
Exceptions May Apply.  There are exceptions to the ownership, use and other rules. One exception applies to persons with a disability.
Exclusion Limit.  The most gain you can exclude from tax is $250,000. This limit is $500,000 for joint returns.
May Not Need to Report Sale.  If the gain is not taxable, you may not need to report the sale to the IRS on your tax return.
When You Must Report the Sale.  You must report the sale on your tax return if you can’t exclude all or part of the gain. You must report the sale if you choose not to claim the exclusion.
Exclusion Frequency Limit.  Generally, you may exclude the gain from the sale of your main home only once every two years.
Only a Main Home Qualifies.  If you own more than one home, you may only exclude the gain on the sale of your main home.
First-time Homebuyer Credit.  If you claimed the first-time homebuyer credit when you bought the home, special rules apply to the sale.
Home Sold at a Loss.  If you sell your main home at a loss, you can’t deduct the loss on your tax return.

Courtesy of IRS

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

Tips for Charity Travel

Do you plan to donate your time to charity this summer? If you travel for it, you may be able to lower your taxes. Here are some tax tips that you should know about deducting charity-related travel expenses:
Qualified Charities.  To deduct your costs, you must volunteer for a qualified charity. Most groups must apply to the IRS to become qualified
Out-of-Pocket Expenses.  You may be able to deduct some of your costs including travel. They must be necessary while you are away from home.
Genuine and Substantial Duty.  Your charity work has to be real and substantial throughout the trip.
Value of Time or Service.  You can’t deduct the value of your time or services that you give to charity.
Travel You Can Deduct.  The types of expenses that you may be able to deduct include: Air, rail and bus transportation,  Car expenses, Lodging costs, Cost of meals, and Taxi or other transportation costs between the airport or station and your hotel.
Travel You Can’t Deduct.  Some types of travel do not qualify for a tax deduction. For example, you can’t deduct your costs if a significant part of the trip involves recreation or  vacation.

Courtesy of IRS

For more information contact Neikirk, Mahoney and Smith at 502-896-2999