This is an Advertisement

Articles Tagged with tax law

By Nathan Vinson, Attorney
English, Lucas, Priest and Owsley, LLP

This is that time of year when we all start thinking about taxes – and how to pay less. We’ve often gotten the news from our accountants that perhaps our refunds won’t be as large as we’d like or that we owe. Ugh to both.

This is a good time to consider if your business can be more charitably minded, and perhaps help you pare back the tax burden next year.

Continue Reading

By Nathan Vinson, Attorney
English, Lucas, Priest and Owsley, LLP

laptop-balls-of-paper-taxes-1024x681

Photograph 047 by Lauren Mancke found on minimography.com

Each year, the IRS sets dollar amounts for specific types of exemptions. Usually, these don’t change much – $100 here, $50 here, etc. You’ll need these numbers as you do your taxes this year.

The personal exemption amount for 2016 taxes is $6,300 for an individual or for a married couple filing separately (so that’s per person). As you’d expect, married filing jointly is twice that at $12,600. Head of households can claim $9,300, and surviving spouse $12,600. For anyone who takes the standard deduction and doesn’t itemize, that is the amount you’ll claim.

However, the exemption is subject to a phase-out that begins with adjusted gross incomes of $259,400 ($311,300 for married couples filing jointly). It phases out completely at $381,900 ($433,800 for married couples filing jointly.)

Forbes published an extensive piece that goes into more detail, including tax tables, which you can read here.

Continue Reading

By Nathan Vinson, Attorney
English, Lucas, Priest and Owsley, LLP

You’d think giving money away would be easy, wouldn’t you? And for the most part, it is. But it’s important to pay attention to some of the details so you don’t end up getting socked with a tax bill or missing out on a tax deduction in return for your generosity.

In our last post, we discussed how to give money to your children, grandchildren or anyone else you’d like without much complication (such as having to file a gift tax return).  Now, let’s turn to gifting that can net you a tax deduction on your income tax return (in addition to just making you feel good).

Continue Reading

By Nathan Vinson, Attorney
English, Lucas, Priest and Owsley, LLP

We’ve heard more than one report of people getting called by scammers pretending to be the IRS, wanting money for back taxes or claiming that the IRS is going to IRS doorwaysue you. Make no mistake: the IRS will not call you.

This time of year, as many people are working on tax filings, anticipating returns and otherwise crunching numbers, the IRS is top of mind, and the scammers know it.

Continue Reading

entertainers auditBy Nathan Vinson
Attorney, English, Lucas, Priest and Owsley, LLP

If you are working in the entertainment industry, the IRS has your tax returns in its sights.

In a new “Entertainment Audit Technique Guide,” the IRS recently instructed its auditors to closely examine tax returns from those in the entertainment business.  Auditors will be scrutinizing deductions claimed on tax returns for expenses which, according to the guide, entertainers have historically been “aggressive or abusive” in taking.

The IRS wants to reign in these perceived industry norms to ensure that the entertainers are legitimately entitled to the claimed deductions. In tax parlance, the expenses giving rise to deductions must be “ordinary and necessary.” As the guide puts it, “The distinction between ordinary/necessary and extravagant must be more clearly drawn.”

Those in the entertainment business can include, but are not limited to, comedians, musicians, singers, songwriters, actors, producers and those involved behind the scenes. The IRS wants to see that the deductions entertainers are taking are substantiated with legitimate receipts and records, and that the expenses truly are business-related (i.e. “necessary”).

Continue Reading

By Nathan Vinson, attorney
English, Lucas, Priest & Owsley, LLP

IRS taxes gambling

The IRS is considering changing the way it taxes gambling payouts.

Since 1977, the IRS has required those who won $1,200 or more from slot machines or $1,500 or more from Keno to report and pay taxes on those winnings. We wrote about this rule earlier this year as it pertains to horse racing, a subject near and dear to Kentucky hearts.

After nearly 40 years of this practice, the IRS is considering changing that limit to $600, and casino gaming operators aren’t pleased.

Continue Reading

By Nathan Vinson, Attorney 
English, Lucas, Priest and Owsley, LLP

just married photoAs early as 2000, states began grappling with the issue of same sex marriage. Some states allowed unions. Some allowed marriage. Some didn’t allow either. Now, with the U.S. Supreme Court’s decision in Obergefell v. Hodges, all states must allow and recognize same sex marriages. So moving forward, what happens at tax time if you’re married in one state but live in a state that previously didn’t recognize same sex marriages?

The American Bar Association offered an online Continuing Legal Education seminar by attorneys Patricia Cain and George Karibjanian recently to help tax attorneys sort through some of the more difficult legal issues surrounding same sex marriage.

It’s been a mess, frankly, for same sex couples.

Continue Reading

By Nathan Vinson
Attorney, English, Lucas, Priest & Owsley, LLP

Tax season is behind us (ahh, it feels nice to type this…) but it’s never too early to remind folks what to look for in a tax preparer – particularly given the news out of the U.S. Department of Justice earlier this year.

2015-02-02 16.45.14The U.S. Department of Justice banned a Kentucky man from preparing tax returns for life after auditing several of his clients’ returns. He offered a service in which he would go to the home of a client and prepare their tax returns on the spot, but he filed fake deductions, including using his own relatives as dependents on their returns and falsifying letters from churches indicating that people had donated money that they had not. He is banned from preparing taxes for life, and rightly so. The Internal Revenue Service takes incidents like this very seriously and has taken a necessary step to help keep the tax preparation industry free of con artists.

Continue Reading

race ticket with cash
By Nathan Vinson
Attorney, English, Lucas, Priest & Owsley, LLP

Ah, spring in Kentucky. If you automatically think of horse racing when you read that statement, you’re not alone – lots of folks do. It’s a great pastime particularly beloved in the Bluegrass State.

This year, we’ve watched the rise of American Pharaoh as the horse that won the Kentucky Derby and Preakness. Next up is the Belmont Stakes, set for June 6 in Belmont Park, Elmont, New York. If American Pharaoh takes the Belmont Stakes, he will be the first Triple Crown winner since Affirmed in 1978. The allure of picking a Triple Crown winner often draws a lot of interest from long-time gamblers and novices alike, so we thought we’d review with you what happens if you do, indeed, win big at the track.

If you are clutching that winning ticket as your pony crosses the finish line, it’s a safe bet that the government wants a cut of those winnings.

There are two ways to win at the track: (1) bet on a horse or (2) own a horse. The government is only interested in knowing about your win as a gambler if you win $600 or more, and if your winnings are at least 300 times your wager (e.g. winning $600 on a $2 bet). Of course, all winnings, no matter what the amount, are taxable.

Continue Reading

computer Every tax season, there are at least a few of us who have some unwelcome surprises. Some discover they were not nearly as organized as they should have been, and can’t find receipts for items they wanted to write-off as business expenses. Others may discover that they made more income than they anticipated, and they owe additional unanticipated taxes.

There are plenty more unwelcome surprises, sometimes having to do with divorce or custody issues. Couples sometimes trade off who gets to claim a child as a dependent, and misunderstanding whose turn it is leads to confusion (and fighting).

If you own your own business, or just make some side income from consulting, you may find out that you owe taxes because you didn’t pay enough estimated taxes during the year. That’s a common problem that we see often with clients.

The best time of year to address these problems is right now. Tax attorneys, accountants and other financial professionals aren’t quite as busy as they are in the first and last quarters of the year executing year-end transactions, followed by preparing returns for clients, and the mistakes you made in 2014 are fresh in your mind. A few simple tips and tricks can get you ready for April 15, 2016.

Continue Reading