Tax Issues Related to Hobbies
Generally, when individuals have a hobby, they have it because they enjoy it and are not involved in their hobby with the goal of making money. In fact, most hobbies never make money or don’t even create any income, for that matter. Tax law generally does not allow deductions for personal expenses except those allowed as itemized deductions on the 1040 Schedule A, and this also applies to hobby expenses.
What Is the Statute of Limitations on Unpaid Taxes?
If you have unpaid taxes that you haven't yet been making payments toward, it might make you fearful that the IRS will come a-knocking one day to collect on what you owe. Tax debt can quickly snowball from interest, penalties, late fees, and the amount of the taxes due. However, a lot of the scaremongering surrounding the IRS is largely sensationalized in media and daily conversation.
Earned Income Tax Credit: Used, Abused and Altered
Any discussion of the earned income tax credit (EITC) needs to begin with a discussion of why Congress created it in the first place. It has a twofold purpose: first, as an incentive for people to work and get off public assistance, and second, to provide financial assistance for low-income taxpayers and their families based upon their income from working, which the tax code refers to as “earned income.” When originally created back in 1979, it even allowed taxpayers to obtain the credit in advance through their employer’s payroll payments, based on projecting the credit they would be entitled to on their tax return for the year. This was referred to as advanced EITC. However, because of the many problems associated with the advanced payment credit, it was repealed for years after 2010.
How Business Owners Should Conceptualize Their Financial Results
Entrepreneurs don't necessarily need to be numbers people in order to succeed: You need drive, passion, the ability and will to follow things through, and the hustler's spirit that enables you to constantly try that new thing or relentlessly chase that next big opportunity.
Disaster-Related Tax Losses May Be Less Than Expected
The late-2017 tax-reform package changed the rules for personal casualty losses, which now are only deductible if they occur in a federally declared disaster area.