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Foster care payments are typically provided to individuals or families who care for children placed in their homes by a governmental agency or court order. While there are variations in the laws and rules among different jurisdictions, the general principles concerning the taxability of these payments are fairly consistent in the United States. 1. Non-Taxable…
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As we venture into the domain of family law and taxes, it’s crucial to understand that certain payments like child support and specific types of alimony aren’t considered taxable income by the Internal Revenue Service (IRS). T&Y CPA is here to demystify these aspects and help you comprehend how they influence your tax situation. Child…
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Government assistance programs are designed to provide support to individuals or families who are facing financial hardship. While it’s common to consider all received income as taxable, the IRS categorizes certain types of government assistance as non-taxable income. In this article, we will explore the specifics of these non-taxable sources of government aid to give…
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Gifts and inheritances can represent a significant financial windfall, and understanding the tax implications of these gains is crucial for prudent financial planning. Fortunately, the Internal Revenue Service (IRS) often excludes gifts and inheritances from taxable income, but the rules surrounding these exclusions can be complex. 1. Gift Income The IRS defines a gift as…
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Life insurance policies play an integral role in financial planning. Among their many advantages, non-taxable insurance proceeds are particularly attractive to policyholders. Understanding this, as well as the specific implications of group life insurance for both employers and employees, can help individuals make informed decisions. This article aims to unpack the nuances of group life…
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Tax time can be stressful for many individuals, and understanding what is taxable and what isn’t can be challenging. However, did you know there are several types of income that the Internal Revenue Service (IRS) does not consider taxable on the federal level, and in some cases, the state level as well? Today, we’ll break…
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If you’re a homeowner seeking unique ways to capitalize on your property while also enjoying tax advantages, then understanding the “Augusta Rule” can be a game-changer. This tax law provision, while not widely discussed, can offer substantial savings and tax-free income under the right circumstances. What is the Augusta Rule? Officially known as Section 280A(g)…
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Title: A Look at the Coffey v. Commissioner Case: Insight on Deductibility of Business Operation Expenses In the realm of tax litigation, the recent case of Coffey v. Commissioner (2021) offers valuable insights for taxpayers engaged in business ventures, particularly on the topic of deductibility of business operation expenses. At T&Y CPA, we believe it…
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Artificial Intelligence (AI) is no longer a concept restricted to science fiction, but an integral part of our day-to-day lives. With advancements in technology, AI has found its way into many fields, and taxation is no exception. The intricacies of tax law, coupled with the demands of maintaining compliance, make tax management a complex task.…
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The U.S. Tax Court case Cherry v. Commissioner, T.C. Memo 2021-14 (Jan. 21, 2021) is an insightful lesson in the tax consequences of securities trading, and an instructive narrative for any taxpayer involved in heavy trading. The central question was whether Mr. Cherry was a trader or an investor for tax purposes. This distinction matters…
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