Let me give you the bad news right at the top… Tax reform has killed the ability for you to deduct your hobby expenses. But — and this is an extremely important “but” — if you sell items as part of your hobby activity, the IRS allows you to deduct the cost of those items if you handle things the right way. That’s right. Thanks to an obscure rule that the Tax Reduction … [Read more...]
How to defeat IRS penalties
Okay. You made a mistake. You failed to file a tax return or didn’t pay the government what you owed. The result? The IRS hit you with an expensive penalty. Does this mean you’re out of luck and have to fork over a lot of cash? Not necessarily! If you know how to use the IRS’s “first-time abatement procedure,” you can very possibly get the penalty waived. We’ll tell … [Read more...]
Tax reform deals professional gamblers a losing hand
If you’re a professional gambler, I sure hope you’re on a lucky streak. Because if you’re not, tax reform just cost you a lot of money. To put this simply, lawmakers were never the professional gambler’s friend, but now, thanks to tax reform changes, your government is even less willing to cut you a break. My advice? Before you head over to the casino, take a minute and … [Read more...]
Good news. Tax reform lands a blow to AMT
Who’s afraid of the big, bad AMT (Alternative Minimum Tax)? Before recent tax reform took effect, you’d be afraid if your AMT liability was higher than your regular federal tax liability. (You’d have to pay the difference in additional taxes.) Now that tax reform is the law, you’ve got much less to fear from the onerous AMT. The bottom line? Changes in the law mean … [Read more...]
Tax Reform Puts Screws to Hobbies
Of the 20.5 million, over 15 million direct sellers such as distributors for Amway, Herbalife, and Mary Kay fall into the tax code defined hobby area. There’s likely millions of other unsuspecting taxpayers, too. Frankly, when your activity loses money, you could find yourself in tax code defined hobby hell. Let’s face it… Hobbies have been mistreated by the IRS for a … [Read more...]