November 21st, 2017
A 2001 tax court case allowed a business man who owned a junkyard to deduct the cost of cat food for stray cats. The junkyard owner was feeding the stray cats to attract then to his junkyard in order to to get rid of his snake and rodent problem.
The Tax Court sided with the junkyard owner, stating that the deduction for the cat items was allowable because controlling the rodent population was an ordinary and necessary expense for a junkyard.
If you need help with your taxes, give our office a call at 816-524-4949 or visit our website at www.Hoorfarlaw.com.
November 20th, 2017
For artists who have always wanted to pursue their dreams of being poor in pursuit of their art, but who have worried about how to pay their minuscule tax bill, there is a special deduction to the rescue. This deduction is meant for actors, musicians, and dancers. Unfortunately, the rules required to meet this deduction can be somewhat cumbersome.
First, the artist must have been a W-2 employee for at least two employers during the year and each employer must have paid the artist at least $200.
Second, the expenses that the artist is deduction must be more than 10% of the total income from the artist’s work.
Third, the artist’s total gross income must be less than $16,000. This number was set in 1986 and has never been adjusted.
The problem with this deduction is that if the artist’s income is less than $16,000, they have little to no taxes to pay anyways. But, just in case, there is a special deduction just for starving artists.
If you need help with your taxes, give us a call at 816-524-4949 or visit our website at www.Hoorfarlaw.com.
November 15th, 2017
Wheir was a body builder who attempted to deduct some body building expenses because he believed he was in the business of body building. Some of his expenses included bison meat, which he ate at the rate of 3 pounds per day, vitamins, protein shakes, body sprays, massage oils, and body building outfits.
The IRS argued that Wheir’s body building was a personal activity and was not a business of any sort and therefor none of the items were deductible.
The Tax Court ruled party in favor of the IRS, stating that the bison mean and protein shakes were not deductible because both of those items could be consumed by the general public and therefor were considered everyday food items.
However, the Tax Court also ruled partly in favor of Wheir, stating that the cost of the lotions and oils were deductible because those certain products were only available to body builders through a body building magazine and therefore were not generally available to the public. The Tax Court also ruled that the body building outfits were deductible because they were not suitable for normal wear and were an ordinary and necessary expense for body building.
If you are having trouble with the IRS and tax deductions, give us a call at 816-524-4949 or visit our website at www.Hoorfarlaw.com.
Drugs and the Tax Man
November 14th, 2017
Regardless of whether their activities are legal under state law, drug dealers have to deal with special tax laws designed to discourage their activities. IRC 280E states that any deductions from an illegal drug business are not allowed. The definition of an illegal drug business is defined by the drugs that are deemed illegal by the federal government, not the states. This means that the marijuana dispensaries in Colorado and California must report their marijuana income, but cannot deduct their marijuana expenses.
This rule is all encompassing for expenses related to the illegal drug business, including rent paid for property used in the drug trade, the soil that the drugs are grown in, and even the Ziploc bags the drugs are transported in.
However, there is still hope for all of your druglord clients. The IRS allows drug dealers to take a deduction for the cost of their goods sold. This means the drug dealer can deduct from their income the cost of the drug from their dealer or supplier to reduce some of their taxable income. The IRS even issued guidance, ILM 201504011, to assist drug dealers in trying to determine the cost of their goods sold.
If you are having trouble with the IRS, give our office a call at 816-524-4949 or visit our website at www.Hoorfarlaw.com.
Upcoming Tax Deadlines
November 13th, 2017
Here are some upcoming tax deadlines to be aware of:
March 15, 2018 – Partnership tax filing deadline
S Corp. tax filing deadline
April 17, 2018 – Individual tax filing deadline
IRA contribution deadline
C Corp. tax filing deadline
If you have tax issues and need assistance, contact our law office at 816-524-4949 or visit our website at Hoorfarlaw.com.
Don’t Hide Illegal Income
November 10th, 2017
Al Capone, one of the most notorious gangsters in American history, wasn’t convicted of murder, extortion, or any number of his other criminal activities. Instead, he was brought down because he didn’t pay his taxes. It was also a powerful reminder to his criminal counterparts; he was convicted in 1931 and that year more than double the amount of unpaid tax filings were submitted to the IRS than the prior year. His conviction was the result of a joint effort between the FBI and the IRS where they were able to follow the paper trail of Capone’s extensive, illegal business activities.
While he only served 7 years of his 10 year sentence, his time in jail was effectively a death sentence because he contracted syphilis in prison, suffered brain damage, went insane from infection, and at the time of his death he was said to have the mental capacity of a 12 year old.
If you need help filing your taxes, give us a call at 816-524-4949 or visit our website at www.Hoorfarlaw.com.
Crime Doesn’t Pay
November 8th, 2017
In another attempt to claim a deduction out of the ashes of a fire, a taxpayer attempted to deduct the cost of hiring his arsonist. This enterprising individual decided that insurance wasn’t good enough by itself. he decided to also attempt to cheat the government by deducting the $10,000 that he paid to the arsonist. The deduction was disallowed under the same set of rules that say that you can’t deduct illegal bribes, kickbacks, or other illegal payments.
If you need help with tax deduction give our office a call at 816-524-4949 or visit our website at www.Hoorfarlaw.com.
Losing your Bankruptcy Due to Not Following the Rules
November 7th, 2017
In order to file for bankruptcy, you need to follow all of the federal bankruptcy rules and regulations. Failure to follow the rules can land you in hot water. One couple lost their ability to erase their debts because they refused to give their bank statements to the bankruptcy trustee.
If you need assistance going through a bankruptcy, contact our law office at 816-524-4949 or visit our website at Hoorfarlaw.com.
Terminating a Parent’s Rights Due to Mental Illness
November 3rd, 2017
A parent’s rights to a child can be terminated if the parent’s mental disease causes harm to the child and no support is available to the parent.
If you need assistance protecting your rights to your child or children, contact our law office at 816-524-4949 or visit our website at Hoorfarlaw.com.
Suing for Injuries Incurred During a Sport
October 27th, 2017
Missouri law states that anyone who voluntarily plays a sport automatically assumes the liabilities, injuries, and dangers that naturally occur during the sport. A Missouri case recently stated that football players can expect to hit one another, but a football player does not expect to be tackled by his football coach.
If you believe you have suffered an injury and need legal representation, contact our law office at 816-524-4949 or visit our website at Hoorfarlaw.com.