Category: "Tax Accounting"

Education Credits: Beyond the Basics

Tax incentives for education may be the most overlooked and most abused items on an individual tax return. They are frequently criticized for their complexity, with each form of education credit or deduction having different rules. With some credits as easy targets for fraud some practitioners are leery of education credit claims. Other problems with these incentives are not so obvious. Software support is limited and taxpayers are not always aware of the benefits or may have false notions about the requirements. more »

IRS Proposes Revised Education Credit Regulations

With several tax law changes to education credit requirements over the past two years, the IRS regulations have become outdated. One of the changes requires that taxpayers have received a 1098-T in order to claim the credit… However, buried in the middle of the proposal is a section that taxpayers and preparers can rely on if the regulations do not become final before the next tax year. … more »

Income Averaging and Transitions in Tax Law

Over the years tax law has been quite fluid based on changes and incentives Congress intends to provide to taxpayers in each session. This amoeba-like quality is what makes comparisons between different generations of the tax code difficult. It's more… more »

Volunteer Tax Assistance Resources

During tax season each year I occasionally come across issues that I need to research or verify. That's when I think a complete list of resources would be handy. I've started developing such a list and am making Volunteer Tax Assistance Resources available on-line. The page is at http://www.tylerhosting.com/voltax/. This is a collection of resources I've developed to assist me and others with our volunteer work at VITA and AARP Foundation Tax-Aide programs and includes … more »

Common IRA Traps

This tax season has been one for IRA traps. IRAs are great, but meeting the rules can be a challenge. With hefty penalties on large sums, any mistake can be disastrous. Here's a few issues I've encountered this year. Don't Forget to Take RMDs. With most… more »

Tax-Aide Repents on Education Credits: I Win!

Last year I confronted someone at Tax-Aide corporate headquarters about a spreadsheet on the support website that limited the amount of scholarships by the amount of the taxpayer's own money…This year the new Tax-aide worksheet for preparers has no mention of own money, and maximizes AOTC much like my own AOTC Worksheet… more »

Educational Components of H. R. 2029

In mid-December Congress passed the 2016 Consolidated Appropriations Act, including amendments titled Protecting Americans from Tax Hikes (PATH) H.R. 2029. That bill addressed a wide array of concerns but it may be best known as the tax extender bill. Those interested in education credits welcomed the extender package because it made the American Opportunity Tax Credit (AOTC) permanent. Unlike many AOTC proposals made during the year that would rewrite the AOTC, unfortunately this package only makes AOTC permanent by removing the phrase "and before 2018" in IRC Section 25A(i). The amounts are the same… more »
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