kcjenkins

Read Pub 526, page five "Out-of-Pocket Expenses in Giving Services". http://www.irs.gov/pub/irs-pdf/p526.pdf

NEW IRS ADVICE ON TAXABILITY OF GIFT CARDS BY MARILEE BASARABA, FSLG SPECIALIST (PACIFIC) Many employers give employees birthday or holiday gifts. These gifts take a variety of forms including a turkey, a ham, a gift basket, or a coupon to purchase a turkey or a ham at a local grocery store. In recent years, the gift card has been a popular alternative because it provides employees with more choices and greater convenience. Some employers believe that gift cards are not taxable and qualify as excludable from income as a de minimis fringe benefit because they meet the example of “traditional birthday or holidays gifts of low fair market value”, or because they are non-negotiable (restricted to only certain items; the redemption time is limited; and any unused portion is forfeited). However, Federal tax law does not view giving an employee a turkey or a ham as the equivalent of giving an employee a gift card to purchase a turkey or a ham. A recently issued Tax Advice Memorandum (TAM) in 2004 clarifies the tax law and discusses this issue. In order for a fringe benefit to be excludable as a de minimis fringe benefit, it must be a property or service that is small in value, infrequent, and administratively impracticable. The TAM determined that an employer-provided thirty-five dollar holiday gift coupon that is redeemable at several local grocery stores is not excludable from income as a de minimis fringe benefit. The IRS findings states that the gift coupon operates in the same way as a gift certificate which is considered a cash equivalent. Cash equivalents are never excludable as a de minimis fringe benefit. The example in Reg.§1.132-6(a) of holiday gifts is limited to property; it does not include cash (except for special rules that apply to transit passes and/or occasional meal money). The same regulation states that cash is not excludable even when it is provided to purchase a property or service that, if provided in kind, would be excludable as de minimis. The example given in the regulation refers to an employer providing cash to purchase a theater ticket to the employee; whereas, if the employer gave the employee the theater ticket it would be excludable as a de minimis fringe benefit. The Service holds that the “statute provides the basis for the exclusion”, wherein the regulations describe examples of fringe benefits that are potentially excludable assuming all of the other requirements of the statute are met. Because gift cards, certificates, and/or coupons are considered cash equivalents, they do not meet the statute requirements to be excludable. Furthermore, the value of the coupons was determinable and the frequency to individual employees was ascertainable - all requirements that must be met in order for the coupons to be excluded from income. The TAM does not address a dollar threshold to establish a standard for the meaning of “small in value.” However, we can look at other tax law for guidance. A 1959 revenue ruling states that the value of a turkey or a ham is considered nominal or small in value. A 2000 legal memorandum states that non-monetary recognition awards having a fair market value of $100 did not qualify as de minimis fringes and are considered wages. So, if an employer provides a turkey, a ham, or other property of nominal value to employees, the value of these items is not considered wages or salary and is excludable from income. But if an employer provides gift cards, certificates, or coupons to purchase a turkey, ham, or other nominal value property, these are considered wages and are subject to income and employment taxes (even when the card restricts the items purchased, the time to use the coupon, and any unused portion is forfeited) because cash equivalents do not meet the de minimis fringe benefit requirements.

Samuel v. Commmissioner of Internal Revenue Service, No. 8431-05L (U.S.T.C. 10/15/2007) (U.S.T.C. 2007) The Judge ruled that the IRS abused their discrection in rejecting the offer, something we have been seeing a lot of lately. Check it out.

No, you are correct that only 1823 will be used up. However, the ATX program knows that too, and if you look at the worksheet, the carryover will reflect the correct amount. I tested it putting into a return with 44K of income a carryover loss of 75K. Net AGI went to -31K, but the amount in the Deduction in current year column of the worksheet shows 38,638 for my single taxpayer, leaving 36,362 to carry forward. Although on the RETURN it appears that the full 44K was used up, the NOL worksheet knows that it was not.

Refer to IRS Tax Topic 514 and you will see this, which may make it clearer. Although commuting costs are not deductible, some local transportation expenses are. Deductible local transportation expenses include the ordinary and necessary expenses of going from one workplace to another. So even if the client is considered an itinerant, so that he does not have 'travel away from home' expenses, he still can deduct the reasonable and necessary expenses of his business, which would include going from one workplace [job] to another. Don't have time to look up a cite right now, but if no one else does, I'll look into it for you tomorrow.

Deb, there are a lot of options. One thing to consider, if you have high speed internet and your computer is on all the time you can use the computer as your fax machine. But you should be able to find a simple fax machine that can distinguishes the difference between a voice call and a fax machine call. The machine recognizes the fax signals and takes the call, or if it is a voice call it sends it to the answering machine. I don't think the answering machine has to be in the same place, as long as you have a phone cord to the answering machine. If you liked your old machine, look for the newer model of the same thing, first on the manufacturer's web site, then on eBay, Buy.com or NewEgg.

I have TTO, so I'm not sure how buying them as two separate packages works. When you are in the tax program, can you automatically access the research software? Or do you need to move from one to the other? I know in my package, they are united.

Yes, the seller has what is often called a 'wrap-around'. He claims the interest he earns on Sch B, and deducts the interest he pays on Sch A.

Tthe minimum tax credit (MTC) allows taxpayers who have incurred AMT in one year to claim a credit against their regular tax in subsequent years. The MTC cannot be used to reduce AMT in those later years, but can be carried forward indefinitely to offset regular tax. Thus, it is not necessary to determine which prior year's MTC is being used in a particular year.

Mine is still not fixed. I'm still waiting....................................................................

what happened when you tried? Were there any messages, or did it just appear to work, but was not there when you looked for it. Oh, by the way, I think if you already rolled one over without rolling the fees, it will not show in THAT return. Just delete it and roll it over again, and see if that solves the problem.

Clearly, if the item is provided to the officer, he can not deduct it's cost. If, however, it is charged out to him as a payroll deduction, as some do, it could be. Also, uniform laundry expense might be a deduction. Haircuts would NEVER be a deduction, nor would shoe shines. And of course, if he does not use his car, where could there be a deduction there? Sounds like the former preparer was VERY CREATIVE.

I agree with them, that the cost of traveling is clearly a reasonable and necessary business expense of being a traveling evangelist. Transportation expenses and travel expenses are two different things, in the tax code, even though they are very similar. So while he can not deduct the cost of his personal travel to and from his personal home to his job, he certainly can deduct the cost of travel between jobs.

:bday:

That is very true, Tom, you should not need to do it more than once a year, normally. Nope, not picking on you, Tom. You know you are one of my favorite ATXers ! One of the few I've actually met, too.

I don't know if you will get a manual or not, but remember that you have not only the online help like the Knowledgebase and the Tutors, you also have the 'help' button. You can access the KB and the Quick Tutors by clicking on the 'Support' button. The KB is on the one called Web Sites. That's also a quick way to get into MyATX.

That is great, Monkeyman. Everyone, to send him an email, just click on his underlined name on the left hand side of his message, select 'send message' from the drop down menu, and you can send him an email directly through this board.

If you choose to roll over this information later, because you did not check the boxes the first time, you can do so by clicking the Rollover Manager tab, and then selecting which rollover you want to perform from the Rollover menu that drops down. It's really simple to do.

We don't really know yet, Lynn. We are waiting for you to use it and report back to us !!! I don't know if scanning in the W-2s is going to be worth that much, but for some practices it may be more valuable than others, especially those with lots of new employers, and new clients, etc. Since the advent of the Companies database, it is not that big a deal to type them in. But the scanner is a very useful tool, helpful in becoming more paperless. So it's your call whether you want it. What scanner are they offering?

Install it and you should be able to access everything, I believe. My disk also installed Max, but what I have is TTO. My understanding is that each disk actually has all the program goodies, it's the activation code that determines which parts you can install.

You are correct, Little Bit, who is a valued part of our office staff, is a registered Scottie. That color is called Wheaten, as it is close to the color of ripe wheat. But she may be blond, but she is not at all dumb. She totally rules over our Irish Wolfhound mix, who's head is almost as big as her entire body. He does not eat until she allows him to!! If he forgets his place, she goes straight for his throat, even though she has to jump hard to reach it. He accepts that she is the boss. Other than that, she is totally sweet, and a real charmer with our clients.

That is a good article. The private equity manager thing is one [probably the only] place where I agree with the Dem position. But, in fairness, it's top pols in BOTH parities who are protecting that loophole. Too bad neither party is willing to worry more about fairness and less about contributors. The AMT was a bad idea when it was passed, and because it was so badly written, it has just steadily gotten worse.

It must be fixed, I just checked, and while I had to log in, I got in with no problem.

A good idea, Zeke, everyone on this board should at least consider clicking on that Donate button as a birthday gift to Eric, as a small token of appreciation for his maintaining this resource for all of us.

I don't even drink, but some of those tests would still work for me............... :lol: