2018 July/August EA Journal Exam

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IRS Program Number: X9QQU-T-00529-18-S

The Ins and Outs of Day-Care Provider Taxes by Laura Strombom, EA

This article discusses day-care provider tax returns. Topics include definition of a day-care provider, Schedule C items, time/space calculations, mortgage interest, home depreciation, home improvements, and home office deductions as they relate to the day-care provider.

 

Does Net Rental Income Qualify for the Section 199 Deduction? by David M. Fogel, EA

This article discusses a change made in the Internal Revenue Code by the Tax Cuts and Jobs Act of 2017: the introduction of a new 20 percent deduction for qualified business income. The main focus of the article is whether a taxpayer who has net rental income is eligible for this deduction. The author also provides four examples to illustrate the effects of the new provision.

 

Reconstructing Automotive Mileage Logs by Bill Nemeth, EA

Verification of car and truck expenses is often required for Schedule C taxpayers in IRS examinations. This article offers some background on the reconstruction of mileage logs using third-party verification, which is a powerful tool for enrolled agents to employ in their tax preparation and representation work.

 

Does Good Faith Reliance on a Tax Preparer Allow a Taxpayer to Avoid a Substantial Understatement of Tax Penalty? by Steven R. Diamond, CPA

IRC Sec. 6662(a) and (b)(1) and (2) impose a 20 percent accuracy-related penalty on an underpayment of federal income tax that is attributable to negligence, intentional disregard of rules or regulations, or substantial understatement of tax. This Tax Court article discusses a court case featuring this section of the Internal Revenue Code.