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As a tax accountant, I meet with clients who try to tally up income and expenses from their rentals couple days before their appointment to finalize taxes. That’s understandable but it is not recommended since there is a possibility that you might not have all the expense records. According to the IRS, the “tax gap” [...]

Like most people, you are probably thinking of converting your traditional IRA, SEP IRA, SIMPLE IRA, or other qualifying retirement plan to a Roth IRA this year. Depending on your tax bracket and financial situation, acting in 2010 could be a good idea. One reason: For conversions made this year, a change in the law [...]

If the money you borrowed is cancelled by your lender and you no longer have to pay it back, you will receive a tax information statement you’ve never seen before. Form 1099-C, which lenders send to you and to the IRS, shows the amount of the cancelled debt — an amount that may be taxable [...]

FTB is hosting free California source income withholding webinars in March. The topics are: 2010 Real Estate Withholding Changes: Description: This session will cover forms and processing changes that became effective January 1, 2010. Date: Tuesday, March 9, 2010 Time: 10 a.m. (PST) Duration: 20 minutes Register here 2010 Resident and Nonresident Withholding Changes: Description: [...]

You will have no problem in believing me when I say “any money you receive is income.” Well, that is how the IRS defines income but like every rule, there are exceptions. IRS broadly uses the term “generally” when describing taxable income. As a taxpayer you have a right to know what portion of income [...]

Cancellation of debt is sometimes income and most of the time not. It all depends on the taxpayer’s situation. To better explain the issue, here is a question followed by an answer and reference. QUESTION In return for $10,000, Tom canceled John’s debt of $20,000. The cancellation of debt wasn’t a gift but part of [...]