Individual Taxes

Personal Injury Settlements

• Are personal injury settlements taxable?
• Do I have to pay income taxes on my personal injury settlement?
• Are monetary lawsuit awards taxable?
• Are punitive or physical damages taxable?
• Can I be reimbursed for rental expenses due to an accident?
• Are awards received in a wrongful death case taxable?

W4 Exemptions

• How do I calculate W4 exemptions?
• How do I reduce my paycheck withholding?
• Can I change my W-4 during the year?
• Is it okay to claim fewer W-4 exemptions than I'm entitled to?
• How do I figure the right number of exemptions to claim?
• Can I increase my W-4 allowances even if I don't qualify?

Deductions

• Are mortgage interest and appliances deductible?
• Can I claim a charitable deduction for groceries I donate?
• Are medications taken in a nursing home tax deductible?
• Are the expenses of filing for divorce tax deductible?
• Are medications tax deductible?
• Are personal injury settlements paid out of pocket deductible?
• Can I claim a mileage deduction if my employer pays for gas?
• Can I claim deductions for gas mileage and books?
• What deductions can I claim for my job?
• Can I deduct loss of 401(k) stock on my income tax returns?
• Can I claim house cleaning serves as an expense deduction?
• Is my mileage to and from college deductible?
• Are there any tax breaks for long commutes?
• Is my mileage to and from work deductible?
• Are my moving expenses deductible?

Winnings

• How should my game show winnings be reported?
• How do I re-value a trip I won?
• Do I have to pay taxes on a home entertainment center I won?
• How much taxes are due on lotto winnings?
• What is the tax consequence of winning a raffle prize?
• Is my raffle prize taxable?
• How can I reduce taxes on my winnings?
• What is the tax on game show winnings?
• What part of game show winnings are withheld for taxes?
• How will Ken Jennings be taxed on his Jeopardy winnings?
• How can I change the fair market value of prizes?

Other

• Where is "exempt income" defined?
• What is the tax on foreigner’s gifts to US citizens?
• Are there any taxes on gifts from relatives in other countries?
• How do I report cash earnings from flower shop deliveries?
• Can I amend tax returns older than 3 years?
• Can we qualify as "part year residents" in California?
• Can I apply all my capital losses to capital gains?
• Should brokers report tax basis on 1099s?
• How do I determine what is commuting vs. business travel?
• What should I do if my professionally prepared return is wrong?
• Do I qualify as a full-time student?
• What is the best way to get money to pay bills?
• Do I qualify as self-employed even if I don't have a business?
• Do I have capital gains if I transfer my stock?
• Do we owe interest & penalties for our preparer's mistake?
• Can California ask for back taxes from 1988 and 1982?
• Do I have to pay taxes on an IRA withdrawl if I give it away?
• What is the best way to donate IRA savings to charity?
• Are donations for "free" software taxable?
• Where can I find a good audit representative?
• Do I have to pay California tax from Australia?
• How does the IRS know I received income?
• How do I determine a future change in household income for an offer in compromise?
• Can my wife change a return that’s already been filed?
• Can I be audited if I submit an amended return?
• When is a margin loan deductible?
• Can I claim a deduction for paying margin calls?
• What are the tax benefits of working overseas?
• Will I still owe California taxes after moving to Nevada?
• How do I report someone not paying their taxes?

Family

Claiming Dependents

• Can I claim my parents as dependents?
• Can I claim my Ukrainian stepson as a dependent?
• Can I claim a dependent exemption for my stepson?
• Can I claim my sister as a dependent?
• Can I deduct expenses for my daughter living in Russia?
• Who has the right to claim dependents in divorce cases?
• Can I claim a dependent exemption for my adult daughter?
• Can I claim my son as a dependent if I support him, even though his mother has custody?
• Can I claim a dependent if someone else has done so illegally?
• What do I do if someone else claims my dependent?
• What are the requirements to claim a dependent?
• What is the income cap for claiming a dependent?
• Can I claim my child as a dependent if I live with my Mom?
• Can I claim my grandchildren as dependents?
• Can I claim my mother as a dependent?
• What are the requirements for claiming parents as dependents?
• Can I claim my parents as dependents if they come to live with me?
• Can I claim my parents as dependents if they aren't permanent residents of the US?
• Can I claim my grandparents as dependents?
• Can I claim my grandparents as dependents if they have earned income?
• Can I claim my son as a dependent if I never married his mother?
• Can my son’s father claim him as a dependent?
• How do I prove my mother is my dependent?

Other

• Have the requirements for filing head of household changed?
• Can I claim head of household?
• Can I claim head of household in years I don’t claim my daughter?
• How are trustee's fees determined?
• What happens if I transfer stock to my children?
• Will I receive stepped-up basis for stock I owned with my Mom?
• Can I file as head-of-household for my parents?
• Do we have to pay taxes on a gift from my parents?
• Will my parents have to pay tax on stock I gave them?
• Will my parents have to pay gift taxes?
• Is a gift I received subject to income taxes?
• Should my withholding change when I get married?
• Are all properties acquired after marriage community property?
• Do I have to pay taxes on money from my step mom?
• What is that basis of stock after a divorce?
• Is pre-divorce maintenance taxable?
• Can I claim head of household?
• Can I conceal my earnings from my parents at age 18?
• Can a person with Power of Attorney put his Mom's assets in a Family Limited Partnership?
• What are the basic guidelines for the child credit?
• Is a gift from family members abroad taxable?
• Is my inheritance from a Chinese relative taxable in the US?
• Can my daughter’s sponsors deduct their contributions?
• How can I get the fair market value of 4 years ago?
• How must I handle proceeds from an inherited property?

Alternative Minimum Tax

• How do I calculate alternative minimum tax?
• Are deductions phased out for AMT when income is high?
• At what point will I receive AMT?
• Does interest or dividends from tax-free mutual funds bypass the AMT?
• How will the new tax rate on dividends affect AMT?
• Can hourly wages alone trigger the alternative minimum tax?
• When does alternative minimum tax exceed regular federal income tax?
• Can I use current gains to offset prior year AMT credits?
• Are there any deductions I can create for AMT?

Retirement Investments

SEP IRA

• How much can I contribute to a SEP account?
• How can I reduce my SEP expenses?
• Can I make regular IRA contributions to a SEP account?
• Should I start a SEP-IRA for my business?
• Can I establish a SEP-IRA for my S corporation?
• Can I contribute to a SEP and file joint with my husband?
• What is the maximum contribution to a SEP for 2003?
• Can I use my SEP IRA to buy a house?
• What is the maximum contribution to a SEP?
• Can I make a SEP contribution for this year?
• What is the penalty for taking money out of a SAR-SEP?
• What happens if I withdraw money from my SARSEP?
• How much can I contribute to my SEP account?
• What is the max amount that you can contribute to a SEP in 2001 and 2002?
• Is there a combined S limitation for SEP contributions?
• Has California conformed to the 25% SEP limitation?
• What is the SEP contribution limit based on?
• Can I use estimated net income to make SEP IRA contributions at the beginning of the year?
• Why change a Money Purchase Plan to a SEP?

Roth IRA

• If I convert a traditional IRA to a Roth, will my other IRA be taxed?
• What happens if you over-contribute to a Roth IRA?
• Can I make Roth IRA contributions for children under age 3?
• Can I move the money in my Roth IRA?
• Can I deduct losses in my Roth account without liquidating?
• What happens to my Roth account and contribution if I discover I don't meet the requirements when I do my tax return?
• Can I deduct a loss from a Roth IRA?
• Can I pay taxes on my Roth IRA conversion in installments?

Other

• What is qualified retirement income?
• What retirement planning options are available to highly compensated employees?
• Why aren't retirement checks tax free?
• Can stock be transferred to an IRA?
• Can I purchase real estate with my IRA?
• If I move to Nevada, are my California retirement benefits taxable?
• Can I use a 401(k) contribution to qualify for a Roth IRA?
• Can I contribute the same amount to an IRA as my 401(k)?
• Can I still deduct my traditional IRA if I have a 401(k)?

Other Investments

• Will long-term capital gains be taxed in 2008?
• What is the "after-tax rate of return"?
• What is the cost basis for stock acquired in a swap?
• What are the tax implications of selling mutual funds?
• What are the taxes on a 17-year-old’s investments?
• Is interest expense for debt used to pay income taxes deductible?
• Is a covered call tax treatment the same as a short sale?
• Can I borrow against muni bonds tax free?
• What is the limit for capital losses?
• When do dividends qualify for lower rates?
• How do I elect to have dividends taxed as ordinary income?
• How can I show my margin loan isn't for my house?
• Can a margin loan be deductible?
• What is the tax basis for stock from life insurance and disability plans?
• How will the wash sale rules affect my taxes?
• Is this a wash sale?
• Does the IRS require brokerage firms to report the cost basis of stock sold?
• Can a limited partner in a building use an exchange?
• Who will be taxed for the shares in my daughter's college fund?
• Can I gift call stock options without exercising them?
• Are capital gains taxes on securities on an honor system?
• What is the AMT rate for long term gains?
• Are US mutual funds subject to US estate tax for a nonresident alien?

Estate Planning

Inherited Property

• Is there a US tax on my wife's inheritance from her French aunt?
• Do I have to pay taxes on an inheritance?
• What is the tax basis of rented inherited property?
• Will my wife and her sister have to pay taxes on the inheritance they passed along to my daughter?
• How should I report income from the sale of inherited property?

Trusts

• Are trustee fees subject to self-employment tax?
• Are tax identification numbers required for revocable trusts?
• Do I need separate tax ID numbers for a trust and estate?
• What's necessary to update a trust?
• Does a trust qualify for the 15% federal rate on dividends?
• Can someone refuse primary beneficiary benefits and still accept benefits from an associated trust?
• Will my trust need to pay tax on income distributed to the beneficiaries?
• Do I need a tax ID number for my trust?
• What is the difference between a living trust and a will?
• Are wills more effective tools to transfer assets than trusts?
• Will creating a trust protect my parents' estate if/when one of them requires long term care?
• What happens if your home is placed into a living trust?
• Where do I report my trustee fees?

Other

• Should my Mom make me co-owner of her CD?
• How do we report income for someone who passed away?
• Will withholding apply to a life insurance payment?
• What is stepped up value?

Business Taxes

Business Deductions

• Can a business claim a deduction for forgiving part of a bill?
• Can we deduct an apartment at a second business location?
• Are suspended losses on S corporation shares deductible?
• Can I claim a deduction for a studio apartment used as an office?

  Other

• Does income-producing real estate qualify for the family business deduction?
• Can a separate building qualify for a home office deduction?

• What is the penalty for not filing form 3115 by the due date?
• Am I responsible for taxes if I have a business name?
• How do I report profit from my S corporation?
• What are the catch-up depreciation rules?
• Can I file Chapter 7 for an S Corporation that owes taxes?
• Do I owe minimum corporate taxes even after dissolution?
• Is there a luxury tax on power tools?
• What should I do with 1099 MISC forms I receive?
• Where do I report income from 1099-MISC forms?
• Are we responsible for withholding when we issue a Form 1099-MISC?
• What is the federal capital gains rate for selling a business?
• Should I take an owner’s draw or salary from my LLC?
• Are one-man LLCs subject to self employment taxes?
• Do you have a corporation tax organizer?
• Is the health insurance premium paid to my mother-in-law taxable as compensation subject to self employment tax?
• What are the procedures and criteria for mark-to-market accounting?
• Information on e-commerce and collecting sales tax in California.
• What do we need to do before accepting donations?

Vehicle Taxes and Deductions

Luxury Tax

• Does luxury tax apply to a car I won?
• What is the automobile luxury tax?
• What is the current luxury tax status?
• Does California charge luxury tax?
• Do I have to pay luxury taxes every year?
• Is there a luxury tax on motorhomes?

Mileage Expenses

• How does the mileage deduction work?
• Can I claim the gas and mileage of my commute as a tax deduction?
• Do I qualify for tax mileage reimbursement by working from home?
• Can I get a mileage deduction for working overtime?
• How do I claim a mileage deduction for my business driving?
• Can I claim a business expense for my commute?
• Can I deduct mileage for a temporary job commute?
• Can I claim mileage on my tax return?
• Can I claim the mileage to and from work as a deduction?
• Is the mileage to college for education deductible?

Other

• What can I deduct for work?
• Is commuting deductible outside normal business hours?
• How can I get a business deduction for an SUV?
• How do I get a business deduction for an electric vehicle?
• Do I have to pay more taxes when I buy an SUV?
• Can my corporation claim my vehicle on their tax return?
• Can I claim a business deduction for my auto loan interest?
• Can I deduct my car as a business expense?
• Can I claim my car as a business tax deduction?
• Is the 'gas guzzler tax' still effective?

Employee Stock Options

• Incentive Stock Option Frequently Asked Questions
• Non-Qualified Stock Option Freqently Asked Questions
• Other Employee Stock Option Frequently Asked Questions

IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained on this website was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.

Do You Have a Question Regarding Taxes or Investments?

Michael Gray regrets that he can no longer directly answer email questions from our readers, which were formerly posted as "frequently asked questions" or faqs. He will answer selected email questions in his newsletter, Michael Gray, CPA's Tax & Business Insight, as time and space permit. To send us a question, please fill out our Feedback Form.

You will receive instructions on how to submit tax questions when you subscribe to our newsletter.

Want to Know When This Page is Updated?

For our newest answers to subscribers' questions, subscribe our newsletter, Michael Gray, CPA's Tax & Business Insight, by filling out the form below.