Tax Newsletter

• Landlords, Tax and Rental Income
  Rental income is considered any payment you receive in exchange for the use or occupation of property. For the purposes of federal income tax filings, you must include all rental income as part of your total gross... Read more.
• Payment Failure Due to Faulty Advice
  When a taxpayer fails to file a tax return or to pay a tax that is due, the IRS will impose a penalty. However, a taxpayer will be excused from paying the penalty for failure to file or pay if he or she shows that there was reasonable... Read more.
• "Alimony" May Actually Be Considered Child Support
  Three major issues commonly resolved in a divorce decree or agreement are: alimony, or spousal support; division of property; and child support. Each has its own tax treatment and implications. In general, for federal income tax... Read more.
• U.S. Supreme Court Abandons the "Relation-Back" Rule for the Taxation of Back Wages
  The U.S. Supreme Court has ruled that awards of back wages to employees are subject to federal taxation according to the year in which the wages are actually paid, not the year in which the wages should have been paid or were actually... Read more.

• Here’s the best way to use a health savings account, which offers a triple-tax advantage
• How to sidestep a tax bomb when selling your home
• New Treasury proposal would hammer wealthy investors using clever tax strategies
• TurboTax maker will pay $141M in settlement over misleading ads for free tax-filing
• What We Know About the DeSantis-Disney Rift

Entertainment and Meals: The 50% Rule and Exceptions

In most cases, you can deduct no more than 50% of certain unreimbursed business-related meals and entertainment expenses on your income tax return. This limit applies to employees or their employers, and to the self-employed.

Exceptions

However, you may be able to deduct more than 50% of an expense if it meets one of the following exceptions:

• Your employer reimburses you for the expense under an accountable plan
• Your business entails the sales of meals or a form of entertainment
• The expense is for a charitable sporting event
• The expense is for advertising
• You are self-employed

Self-Employment

If you are self-employed, you may be exempt from the 50% limit if:

• Your expenses are because you are an independent contractor
• Your client reimburses you for your expenses
• You provide adequate records of these expenses to your customer or client

You must meet all three of these requirements in order to be exempt from the 50% limit rule.

Entertainment Tickets

Usually, you cannot deduct more than the face value of a ticket that you claim as an entertainment expense. You cannot deduct service fees or any amount over the face value that you may have paid a scalper.

However, if the ticket is for a sports event that benefits a charitable organization, you may consider the full cost of the ticket, even if it is more than face value, if:

• The event’s main purpose is to benefit a qualified charitable organization
• Entire net proceeds go to the charity
• The event uses volunteers to perform substantially all the event’s work

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