Author Archives: sarahellco

An archive of frequently asked tax questions illustrated with photos of companion animals submitted by friends and clients. If you have a question or a picture of a beloved pet you would like to contribute to the cause of tax education, feel free to contact me!

The IRS relies on a computerized matching system for finding errors and fraud on tax returns. If there is an obvious mismatch between what has been reported to them, and what you report, it is likely they will catch it and make attempts to correct it. Often it will begin with passive aggressive letters sentContinue reading “Omniscience of Authority”

You can actually deduct expenses if you don’t have the receipts or documentation for them … a lot of the time. A good faith estimate is acceptable. However, just because you can do this, doesn’t mean you should slack on record keeping.  Making a point of paying for things with a check, card, or electronicContinue reading “Substantiation of Everyday Life”

If you use a portion of your home for a business that generates a net profit, you can deduct a pro-rated portion of your rent, utilities, mortgage interest, insurance, property taxes and home value as a business expense

The new tax laws are the biggest change to the income tax rules since Gramm-Rudman in the 1980s. One major change is the elimination of deductions for Unreimbursed Employee Business Expenses. Gone. All gone.  This has led to confusion for some self-employed people who misinterpret this as applying to them. If you are self-employed, andContinue reading “Mixing Business with Pleasure”

If you are a small business owner, an independent contractor, a freelancer – whatever you or the people who pay you call it – you are subject to self-employment tax. This is in addition to regular income tax. Self-employment tax is 15.3% of your net profit as opposed to your gross income. The rate is equal to the percentage ofContinue reading “Self-Employed”

For tax purposes, equipment is another term for an asset. An asset is something you purchase for your business that will last more than a year and costs $500 or more. You will want to keep records of what date you purchased and started using it, whether you purchased it new or whether it was a gift or somethingContinue reading “Semantics of Write Offs”

The tax consequences of cashing out your 401(k) or other retirement plan depend on your age and other life circumstances. If you are 55 or older or disabled, then you won’t be penalized for doing so. If you are younger, and just want to take a break from working, then you face a federal taxContinue reading “Desiring to Stop Deferring the Dream”

As a licensed tax preparer, I am required to encourage you to pay your income taxes in a timely manner. However, I am not required to make you do so, if you feel morally compelled to protest the current state of the U.S. Government in this manner. However, I am going to let you know the consequencesContinue reading “Comrades …”