Special Services, Inc.

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IRS Clarifies Federal Tax Status of Special Payments Made by 21 States in 2022 (IR-2023-23)
The IRS has provided details clarifying the federal tax status involving special payments made by 21 states in 2022. Taxpayers in many states will not need to report these payments on their 2022 tax...

IRS Changes Definitions for New Clean Vehicle Credit, Updates FAQs (Notice 2023-16; IR-2023-18; FS-2023-4)
The IRS intends to change how it defines vans, sports utility vehicles (SUVs), pickup trucks and “other vehicles” for purposes of the Code Sec. 30D new clean vehicle credit. These changes...

IRS Establishes Low-Income Communities Bonus Credit Program for Energy Investment Credit (IR-2023-26; Notice 2023-17)
The IRS established the program to allocate environmental justice solar and wind capacity limitation (Capacity Limitation) to qualified solar and wind facilities eligible for the Low-Income Comm...

Advanced Energy Project Program Established (IR-2023-27; Notice 2013-18)
The IRS announced a program to allocate $10 billion of credits for qualified investments in eligible qualifying advanced energy projects (the Code Sec. 48C(e) program). At least $4 billion of the...

New Rules and Conditions for Real Estate Developer Alternative Cost Method (Rev. Proc. 2023-9)
The IRS has released new rules and conditions for implementing the real estate developer alternative cost method. This is an optional safe harbor method of accounting for real estate develo...

IRS Allows Taxpayers Electronically Filing Form 1040-X to Choose Direct Deposit (IR-2023-22)
The IRS announced that taxpayers electronically filing their Form 1040-X, Amended U.S Individual Income Tax Return, will for the first time be able to select direct deposit for any resulting r...

Treasury Welcomes Clear Guidance on Pillar Two Global Minimum Tax and Tax Credit Protections
The OECD/G20 Inclusive Framework released a package of technical and administrative guidance that achieves clarity on the global minimum tax on multinational corporations known as Pillar Two. F...

How Do I? Figure the first-time homebuyer tax credit?
The Housing Assistance Tax Act of 2008 (2008 Housing Act) gave a boost to individuals purchasing a home for the first time with a $7,500 first-time homebuyer tax credit. The credit was enhanced from $...

FAQ: When does a gift require a gift tax return?
If you've made, or are planning to make, a big gift before the end of 2009, you may be wondering what your gift tax liability, if any, may be. You may have to file a federal tax return even if you do ...

The ups and downs of falling interest rates in tax planning
Falling interest rates and the current slowdown in the U.S. economy are having a widespread affect on today's economy and individuals' financial resources, from savings accounts to personal loans and ...

FAQ: Are fees paid for trash pickup and homeowners association dues deductible as property taxes?
No. Even though trash pickup and neighborhood oversight provided by a governmental entity such as a town or county can be figured into the amount of deductible property taxes paid by a homeowner, a pa...

Decision making needed to maximize important business incentives in the 2009 Recovery Act
The business incentives in the American Recovery and Reinvestment Act of 2009 (2009 Recovery Act) are much anticipated and valuable. Three significant business incentives in the 2009 Recovery Act are ...

FAQ: Are website development costs for my business deductible?
Like the Internet itself, the correct deductibility of a business's website development costs is still in its formative stages. What is fairly clear, however, is that it is highly unlikely that any si...

How Do I? Compute a negligence penalty for not having the right proof for a deduction?
An accuracy-related penalty applies to a tax underpayment due to "negligence or disregard of the rules and regulations." "Negligence" for this purpose includes any failure to make a reasonable attempt...

How the Mortgage Forgiveness Debt Relief Act is helping homeowners
On December 18, 2007, Congress passed the Mortgage Forgiveness Debt Relief Act of 2007 (Mortgage Debt Relief Act), providing some major assistance to certain homeowners struggling to make their mortga...

FAQ: What kinds of moving expenses are deductible?
Only "qualified moving expenses" under the tax law are generally deductible. Qualified moving expenses are incurred to move the taxpayer, members of the taxpayer's household, and their personal belong...

How do I? Calculate compound interest on an IRS penalty
The amount of interest required to be paid for underpayment of tax is compounded daily. In order to calculate compound interest, you divide the Code Sec. 6621 interest rate by the number of days in th...

FAQ: Must the S corp election be made each year?
The small business corporation (S corp) is one of the most popular business entities today, offering its shareholders the flow-through tax treatment of a partnership and the limited liability of a cor...

How do I? Process employee Earned Income Tax Credits
Employees who qualify for the Earned Income Tax Credit (EITC) can elect to receive the credit in advance payments from their employer along with their regular pay during the year. Advance earned incom...

FAQ: Are holiday turkeys given to employees taxable and deductible?
With the holidays quickly approaching, you as an employer may not only be wondering what type of gift to give your employees this season, but the tax consequences of the particular gift you choose. Th...

How Do I? ... Keep a log for automobile expenses
If you use your car for business purposes, you may have learned that keeping track and properly logging the variety of expenses you incur for tax purposes is not always easy. Practically speaking, how...

FAQ: Are long-term insurance premiums tax deductible?
Long-term care premiums are deductible up to certain amounts as itemized medical expense deductions. The amount is based upon your age. Unfortunately, most taxpayers do not have enough other medical e...

How Do I? Compute the Kiddie Tax for 2009
Under the so-called "kiddie tax," a minor under the age of 19 (or a student under the age of 24) who has certain unearned income exceeding a threshold amount will have the excess taxed at his or her p...

FAQ: Is foreign business travel deductible?
A taxpayer's expenses incurred due to travel outside of the United States for business activities are deductible, but under a stricter set of rules than domestic travel. Foreign travel expenses may be...

How do I? Compute the small corporation AMT exemption?
The alternative minimum tax (AMT) is imposed on corporations in an amount by which the tentative minimum tax exceeds the regular income tax for the taxable year. The purpose of the AMT is to prevent t...

Collapse of mortgage market brings unanticipated tax consequences to homeowners
With the subprime mortgage mess wreaking havoc across the country, many homeowners who over-extended themselves with creative financing arrangements and exotic loan terms are now faced with some grim ...

Pay your taxes on-line: Options for both businesses and individuals
These days, both individuals and businesses buy goods, services, even food on-line. Credit card payments and other bills are paid over the internet, from the comfort of one's home or office and withou...

FAQ: Will renting my vacation home mean big tax write-offs?
If you own a vacation home, you may be considering whether renting the property for some of the time could come with big tax breaks. More and more vacation homeowners are renting their property. But w...

How Do I? Arrange employee discounts with the best tax results
Fringe benefits have not only become an important component of employee compensation, they also have a large financial impact on an employer's business. Fringe benefits are non-compensation benefits p...

"Reasonable" compensation: Hot button for IRS auditors
In order to be tax deductible, compensation must be a reasonable payment for services. Smaller companies, whose employees frequently hold significant ownership interests, are particularly vulnerable t...

FAQ: When are back social security payments included in income? How about repayments?
A lump-sum of social security benefits is usually included in gross income for the year in which it is received. However, a recipient may choose to include in gross income the total amount of benefits...

How do I? Handle non-cash incentive award reporting and withholding?
Non-cash incentive awards, such as merchandise from a local retailer given to its employees or vacation trips offered to the employee team member who contributes the most to a special project, are a f...