The IRS has a checklist to determine if a taxpayer’s activity is a business or a hobby. The results of that decision will impact the deductibility of certain expenses on your tax return.
The checklist includes
- How many years have been profitable on the tax return,
- Has the taxpayer taken steps to increase efficiencies and/or profitability of the activity,
- Does the taxpayer depend on the income from the activity
If the IRS determines the activity is not a business then certain expenses can be deducted only on a Schedule A and others may not be deductible at all.
Click here for more information from the IRS [http://www.irs.gov/uac/Business-or-Hobby%3F-Answer-Has-Implications-for-Deductions], or call us – we can help!
The rules regarding who is an employee and who is an independent contractor vary by state and can be surprisingly strict. If the State determines at any point during or after employment that a subcontractor was really an employee there may be substantial taxes, interest and penalties due to both the IRS and the DOL.
Below find an easy to understand check list by the Washington State Department of Labor & Industries:
The Small Business Administration also produces a list of questions that help determine who may or may not be an employee. Here is a link to their checklist:
This is a link to the Oregon Statutes:
And if you’d like to read some recent court findings regarding this topic, click on these links:
If you have questions, call us – we can help!
If you have received Identity Theft insurance from a merchant you won’t have to include the value of the policy in your income.
Read more here:
If you own a Partnership or a C corporation and file based on a calendar year (12/31) your filing deadlines for your 2015 tax return have changed. Here is a synopsis
|Type of Filer
||2015 tax year
||2016 tax year
|Partnerships (Form 1065)
|C Corporations (Form 1120)
|S Corporations (Form 1120S)
|Trusts & Estates (Form 1041)
|Individuals (Form 1040)
|Exempt (Form 990)
You can read more about these changes in the following articles: