In the first part of this post, on December 27, we provided an introduction to the concept of hobby loss by looking at a recent case example. The case involved a photographer who created and sold stylized digitized images of the American West.
One of the classic issues in tax law is commonly known as "hobby loss." It involves trying to distinguish between a hobby and a business activity.
In the first part of this post, we discussed two possibilities for getting your tax bill paid. One possibility is to take out a personal loan so you can pay Uncle Sam. Another is to set up a short-term payment plan.
A person generally doesn't want more of their hard-earned money being transferred from them to the government through taxes than is supposed to under the law. Unfortunately, the Internal Revenue Service sometimes collects from a person a tax that they didn't actually, under the law, owe. Such an over-collection can be very unsettling for a taxpayer and leave them wondering what they can do.
Payroll taxes are a significant burden for employers. This isn't only due to the amount of taxes that must be paid. It is also the administrative aspects of withholding taxes from employees' paychecks and paying over the right amounts to the IRS at the right time.
Complimentary coffee, pastries or an occasional pizza are nice perks to get from your employer. But they are generally not considered taxable income because their value is de minimis.
Hockey is not a game for the faint of heart. Speed and skill do play a role, but success often depends on aggressively challenging opponents for control of the puck.
Federal tax law recognizes that there are circumstances in which a taxpayer should not be held responsible for tax debt that arose during marriage. This recognition is reflected in relief from tax liability that is commonly called innocent spouse relief.
If your spouse or former spouse controlled the marital finances, it may not be fair to hold you responsible for tax liability incurred during the marriage. After all, he or she may have committed errors or engaged in fraudulent or otherwise questionable conduct that you had no reason to know about or were in no position to stop.
The Fourth of July is a fitting occasion to put tax law in a larger picture.