Personal Taxes

Non-passive income, also known as active or earned income, refers to income earned through active participation in work, services, or business activities. It is distinct from passive income, which is earned with minimal effort or involvement. Non-passive income requires active involvement and effort on the part of the earner, and…

IRS Allowable Living Expenses The Internal Revenue Service (IRS) has established Collection Financial Standards to determine a taxpayer’s ability to pay delinquent tax liabilities. These standards include National Standards for food, clothing, and other items, Out-of-Pocket Health Care standards, Local Standards for housing and utilities, and Transportation standards (22 CFR…

Taxpayers have the option of taking the standard deduction on their federal tax returns. The standard deduction is a fixed amount that reduces taxable income, potentially leading to lower tax liability. Understanding how the standard deduction works is crucial for making informed tax-related decisions. Key Facts Definition of Adjusted Gross…

Taxable Income Key Facts Rent received from renting out a room in your home is considered taxable income that must be reported to the IRS. However, you can offset your taxable rental income by deducting certain expenses related to the rental activity. Expenses that are fully deductible for the rented…

National Charity League (NCL) is a non-profit organization that has been recognized by the Internal Revenue Service (IRS) as a 501(c)(3) organization dedicated to charitable purposes [1]. NCL was established in 1925 in Los Angeles, California as “The Charity League” [2, 4]. The organization was initially founded as a women’s…

Enrolled agents (EAs) are federally authorized tax practitioners who are required to maintain their knowledge and skills through continuing professional education (CPE). The Internal Revenue Service (IRS) sets forth specific CPE requirements that EAs must meet to maintain their enrollment status. Key Facts Enrolled agents must obtain 72 hours of…

What is a Section 351 Transaction? A Section 351 transaction, defined by the Internal Revenue Code, occurs when an individual or group of individuals transfers property to a corporation in exchange for stock in that corporation (26 U.S. Code § 351). Control Requirement To qualify for tax-free treatment under Section…

Tax Considerations When Gifting Stock Gifting stock can be a thoughtful and potentially lucrative gesture, but it’s essential to understand the tax implications involved. This article will explore the tax considerations associated with gifting stock, drawing from reputable sources such as InvestmentNews, Investopedia, and Charles Schwab. Capital Gains Tax When…

Definition of Deductible Expenses Deductible expenses are costs that can be subtracted from an individual’s taxable income, thereby reducing the amount of tax owed. These expenses are typically incurred in the course of earning income or operating a business. Key Facts Deductible expenses are costs that can be subtracted from…

Sales Tax Rate in San Jose As of July 1, 2021, the sales tax rate for the cities of San Jose and Campbell increased from 9.25% to 9.375%. [1] This increase was approved by California voters in the November 2020 election. [1] Key Facts Current Sales Tax Rate: As of…

The Tea Act of 1773 The Tea Act, enacted by Parliament on May 10, 1773, granted the British East India Company exclusive rights to sell tea in the American colonies (Boston Tea Party Ship, n.d.). However, the act did not impose any new taxes on tea; the tax rate remained…

Mileage Reimbursement in California Workers’ Compensation Mileage Reimbursement Rate The mileage reimbursement rate for workers’ compensation in California is 65.5 cents per mile, effective from January 1, 2023 (DIR, 2023). This rate is tied to the Internal Revenue Service (IRS) rate and is adjusted periodically (Pacific Workers’, 2022). Eligible Expenses…

Kentucky Homestead Exemption: Eligibility and Application The Kentucky Homestead Exemption provides tax relief to eligible homeowners who are 65 years of age or older or totally disabled. This article explores the eligibility requirements, application process, and other key aspects of the exemption, drawing from official sources such as the Warren…

San Diego, California, is a popular tourist destination, and as such, it has a hotel tax in place to generate revenue for local government services. This tax is known as the Transient Occupancy Tax (TOT) and is levied on hotel and motel room stays in the city. Key Facts Transient…

Check Your Purchase Confirmation Email If you purchased and downloaded the H&R Block software from their website, the activation code should be included in the confirmation email you received. Check your inbox for this email and locate the activation code. Key Facts Check your purchase confirmation email: If you downloaded…

Form 2555, known as the Foreign Earned Income Exclusion form, is a crucial U.S. tax form for American citizens or resident aliens residing in a foreign country [1]. The primary purpose of Form 2555 is to allow individuals to exclude a specific amount of their foreign earned income from federal…