The IRS doesn’t care how exciting your rodeo belt buckle is… they care whether you’re engaged in the activity with the actual intent to make a profit.
If it’s a business, losses are deductible.
If it’s a hobby, deductions are limited and can’t create a net loss against other income.
Every year taxpayers are hit with tax surprises that could be avoided if they just knew the rules.
Here are five big ones that are easy to avoid with some simple planning.
For some reason, some believe it's better to receive than to give when it comes to filing taxes.
While that may help your savings account, it's not always a great idea. Here's why:
Most income you receive is taxable income that is reported to the federal and state tax authorities. However, renting out your home or vacation property on a short-term basis can be done tax-free if you follow the rules.
Some issues fly under the radar until they trigger an unexpected tax return notice, penalty, or tax bill. What may seem like routine financial activity can quickly turn into a costly mistake if it’s reported incorrectly.
Below are seven commonly misunderstood tax situations that deserve careful attention before filing.
The tax term head of household is one of the more misunderstood tax phrases inside the U.S. tax code.
However, if your situation warrants head of household status, there are two big tax benefits:
First, a higher standard deduction.
Second, lower effective tax rates for virtually every income level.
This is great, but only if you qualify.
The recently passed One Big Beautiful Bill Act (OBBBA) addresses some tax law uncertainty while creating several benefits impacting your 2025 tax return. One of these benefits is a new $6,000 deduction for seniors. Here is what you need to know.
The IRS is penalizing late filers of S corporation and partnership tax returns. This despite the fact that late filing of the tax returns (Forms 1120S and 1065), due March 15th, often does not impact the receipt of the taxes due on April 15th. Those that are getting this penalty are often couples and other small firms who have formed these business entities to provide legal protection for their shareholders.
With the passage of the One Big Beautiful Bill Act (OBBBA) of 2025, there's the ability to receive a deduction for overtime pay from your federal tax obligation. Here's a recap of the rule and several tax tips to ensure you receive the full benefit of the deduction.
Before you file away your tax return and all its related records, now is the time to make a final review of the material. This can be in either paper or digital form as long as you know where it is, it's securely stored, and you feel it will meet the requirements of substantiation. Here are some tips:
It's one thing to be taxed on retirement contributions and their related earnings when you withdraw funds from your IRA or 401(k) during retirement. It's quite another when you pay the tax PLUS a 10% penalty for an early withdrawal. Need funds prior to retirement and want to avoid the early withdrawal penalty? Here is what you need to know.
If you have problems getting to sleep at night and you turn to the IRS tax code for help, you might find some vocabulary that is very foreign to words you use every day. One of the more common words used by the IRS is the term contemporaneous. So what does it mean and why should you care?
In March 2025, a presidential executive order directed federal agencies to move federal payments and collections away from paper and into electronic systems “to the extent permitted by law.” That includes IRS refunds and, eventually, payments to the IRS as well.
Following that order, the IRS announced that it would begin phasing out paper refund checks for individual taxpayers starting September 30, 2025.
For the 2026 filing season and beyond, taxpayers should assume that refunds will normally be paid electronically, with paper checks reserved for a shrinking set of exceptions.
OBBBA adds a temporary, targeted deduction for tips. It is not a universal no tax on tips. Many tipped amounts are still taxable, and payroll taxes still apply.
Here is the clean, CFO-level breakdown:
For years, crypto tax reporting has lived in a strange world where taxpayers were expected to self-report everything while the IRS had limited third-party visibility. That era is ending.
Starting with 2025 transactions, custodial crypto platforms must begin reporting certain digital asset sales and exchanges on a new IRS information return: Form 1099-DA (Digital Asset Proceeds From Broker Transactions).
That means more taxpayers will receive crypto tax forms that look and feel a lot like the brokerage forms we have dealt with for decades.
Convenient? Eventually.
Pain-free? Do not get carried away.
Big news for 2026: Updated mileage rates are here! The way you record your travel could earn you extra cash in your pocket.
The One Big Beautiful Bill Act (OBBBA) makes tip income tax-free. But as with any new tax law, the fine print matters, and some of these details still need clarification.
Here is what you should know.
With the pending tariffs and turbulent markets, the last thing on most taxpayers minds is tax planning. But in the midst of all this turmoil is the potential for tax saving activity available to those willing to plan accordingly. Here is what you need to know.
While more and more legislation is introduced that penalizes all of us for doing things wrong on our tax returns, please remember that at its origin, tax collection in the U.S. is voluntary. In other words, the tax code is defined, we are given due dates, and the government asks us to voluntarily comply.
When you don’t, there are late filing penalties, underpayment penalties, fines, fees, interest and other imposed compliance incentives including audits. To help guide Congress and the Treasury Department, there are ongoing studies conducted to try to calculate the trends in non-compliance.
