From collecting stamps and woodworking to crafting and quilting, people have all kinds of hobbies – and most of these hobbies will never turn a profit. For hobbies that do earn income, people should know that they must report it on their tax return. They should also be mindful that their hobby might be a business.
According to a Government Accountability Office report, in 2018, there were 2,148 law enforcement officers working for the IRS’s Criminal Investigation Division. They were armed with 4,461 weapons, including 15 fully automatic weapons and more than 5 million rounds of ammunition.
The division investigates “potential criminal violations of the Internal Revenue Code and related financial crimes in a manner that fosters confidence in the tax system and compliance with the law.”
WHT do they need machine guns and 5 million rounds to do THAT? This year alone, the IRS has purchased $725,000 worth of ammunition!
A business might pay an independent contractor and an employee for the same or similar work, but there are key legal differences between the two. It is critical for business owners to correctly determine whether the people providing services are employees or independent contractors.
An employee is generally considered anyone who performs services, if the business can control what will be done and how it will be done. What matters is that the business has the right to control the details of how the worker's services are performed. Independent contractors are normally people in an independent trade, business or profession in which they offer their services to the public.
There are a few things business owners need to do before they close their business. Of course, they need to fulfill their federal tax responsibilities. It's also important to notify the IRS of their plans.
Charitable remainder trusts are irrevocable trusts that let you donate assets to charity and draw annual income for life or for a specific time period.
We closely examine charitable remainder trusts to ensure they:
In a charitable remainder trust:
Did you know that there is a Taxpayer Bill of Rights to help protect all taxpayers?
Taxpayers have the right to expect that any IRS inquiry, examination, or enforcement action will comply with the law and be no more intrusive than necessary. Taxpayers can also expect that the IRS will respect all due process rights, including search and seizure protections and will provide, where applicable, a collection due process hearing.
This tax court ruling shows how important it is you have a tax advisor that is well versed in business returns.
Many people work for a family member, whether it's a child helping out at their parent's shop or spouses running a business together. When someone is employed by a family member, the tax implications depend on the relationship and the type of business. It's important for taxpayers and employers to understand their tax situation.