Taxpayers should use Form 1040, Schedule F to report income and expenses from a farming activity as a self-employed farmer.  Net profits are subject to SE tax (Schedule SE).   For tax purposes, a farmer is defined as any individual who cultivates (plants, waters, gathers crop), operates, or manages a farm for…

If you use your car for business purposes, you ordinarily can deduct expenses related to the car or truck. Actual expenses include the cost of gas, oil, repairs, insurance, and depreciation on a vehicle. To determine the amount of car and truck expenses that can be included in actual expenses or…

When income is reported by a foreign employer on a form other than a Form W-2 or 1099-R (both of which require an employer identification number in order to e-file), use Form FEC, Foreign Employer Compensation to report the income on the taxpayer’s tax return.  Form FEC is not a…

Form 8948 is to be used by specified tax return preparers to explain which exception applies when a tax return is prepared and filed on paper.  A specified tax return preparer is a tax return preparer who reasonably expects to file a specified number of tax returns during a calendar year….

**Form 8891 was discontinued by the IRS for tax years beginning Jan.1, 2015 and later. Taxpayers are no longer required to file Form 8891 for any year past or present. To read the IRS news release on how reporting requirements have been simplified read below: Originating Article: IRS Simplifies Procedures for…

In 2008, Congress passed legislation, which requires brokers to report the adjusted cost basis for taxable accounts to the IRS and taxpayers via Form 1099-B starting with tax year 2011 for some securities. This legislation also requires that a 1099-B indicate if the gain or loss is short-term or long-term and…

If the partnership is subject to the rules for consolidated audit proceedings in sections 6221 through 6234, the partnership can designate a partner as the Tax Matters Partner (TMP) for the tax year for which the return is filed.  The designated TMP must be a general partner, and in most…

Alimony Paid Alimony payments received from a spouse or former spouse are considered to be taxable income in the year received.  The amount received is reported on Form 1040.  Form 1040A or Form 1040EZ cannot be used.  The person making the alimony payment may claim a deduction in the year it…

When determining the Premium Tax Credit on a tax return, the taxpayer must reconcile the amounts reported on the Health Insurance Marketplace Statement (Form 1095-A) by filing Form 8962 – Net Premium Tax Credit with their tax return. However the amounts that are reported on the Form 8962 – Net…

Anyone who prepares or assists in preparing federal tax returns for compensation must have a valid Preparer Tax Identification Number (PTIN) before filing returns.  The PTIN is a nine-digit number that is used in place of the paid preparer’s SSN of any federal tax return or claim for refund.  All enrolled agents must…