| Prepaid Interest Paid By Cash-Basis Taxpayers |
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| In general, if you are a cash-basis taxpayer who prepays interest on a loan, you are not permitted to deduct all the interest in the year of payment. Under the Internal Revenue Code, you are required to capitalize the prepaid interest and deduct it as if you are an accrual-basis taxpayer. In other words, you cannot take a deduction for interest other than in the year in which it is due. The prepaid interest is allocated to the tax year in which the interest actually represents the cost of using the borrowed money. To allow a deduction of prepaid interest in the year of payment rather than in the year it is due would materially distort your income. More... |
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| Home-Based Business Tax Avoidance Schemes |
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| We are all entitled to take advantage of every legal exclusion, deduction, and credit to reduce our federal income tax liability. However, we must, as taxpayers, be aware of bad advice that could result in improper and costly tax avoidance. More... |
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| Taxpayer Assistance Orders |
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| A taxpayer who believes that he or she is suffering, or is about to suffer, significant hardship as a result of the way in which the tax laws are being administered may be entitled to help from the Office of the National Taxpayer Advocate. The National Taxpayer Advocate has the authority to issue a taxpayer assistance order (TAO) upon the taxpayer's approved application. More... |
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| Work-Related Education Expenses |
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| If you are an employee, you may be able to deduct the costs of qualifying work-related education, but only if you itemize instead of taking a standard deduction. The deduction allowed would be the amount by which your work-related education costs plus other job and certain miscellaneous expenses exceed two percent of your adjusted gross income. If they don't exceed this floor, no deduction is allowed. If you are self-employed, you may deduct the costs of work-related education directly from your self-employment income. More... |
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| Social Clubs |
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| Under the Internal Revenue Code, certain organizations and programs are exempt from income taxation. One type of organization that frequently seeks tax-exempt status is the social club. More... |
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