#tax-compliance
Tax Compliance
Stay compliant with tax regulations and filing requirements
Form 1099-S Demystified: How the Right Closing-Day Certification Can Spare You a Surprise Tax Bill on Your Home Sale
Form 1099-S reports the gross sale price of a home, not the net, which routinely triggers IRS CP2000 notices for sellers whose gain is fully excluded under Section 121. This guide explains the Rev. Proc. 2007-12 certification that lets qualifying principal-residence sales bypass the form, the $250,000/$500,000 thresholds, the nonqualified use trap added in 2008, and how to defensibly report when the 1099-S cannot be skipped.
Form 3520-A: The March 15 Deadline, Substitute Filings, and the 5% Section 6677 Penalty
Form 3520-A is the annual information return for a foreign trust with a U.S. owner, due March 15. If the foreign trustee does not file, Section 6677 imposes an initial 5% penalty on trust assets plus $10,000 per 30-day continuation period — payable by the U.S. owner. Covers who files, the substitute filing path, the reasonable-cause defense, and how to clean up multi-year non-compliance.
The 2026 Form W-4 Multiple Jobs Worksheet: How Two-Earner Couples and Side-Hustlers Sidestep an April Tax Surprise
A plain-English walkthrough of Form W-4 Step 2(a), 2(b), and 2(c) for two-earner households and side-hustlers — including the higher-paying-job rule, side-hustle income on Step 4(a), and the 90%/100%/110% safe-harbor numbers that prevent an April tax bill or penalty.
MLP K-1 Tax Issues for Individual Investors: UBTI, Section 751 Recapture, and Multi-State Filings
A Master Limited Partnership pays cash quarterly but issues a Schedule K-1, not a 1099. Most distributions reduce your cost basis instead of being taxed, holding units in an IRA can trigger UBTI and a Form 990-T once income exceeds $1,000, and selling converts depreciation into ordinary income under Section 751 — taxed up to 37%.
MLP K-1 Tax Issues: UBTI, Section 751, and Multi-State Filings for Individual Investors
How individual MLP investors actually owe tax — UBTI on IRA-held units crosses the $1,000 Form 990-T threshold faster than expected, Section 751 reclassifies part of any sale gain as ordinary income, and the K-1's state schedule can force nonresident filings in operating states. Includes practical thresholds and basis-tracking rules.
NIL Collectives and 501(c)(3) Status: What IRS Memorandum AM 2023-004 Means for Donors
IRS Memorandum AM 2023-004 holds that most nonprofit NIL collectives fail the 501(c)(3) operational test because compensating student-athletes is substantial private benefit, not charitable activity — meaning donor contributions are often not deductible.
Why Most NIL Collectives Aren't Real Charities (and Your Donation Isn't Deductible)
The IRS memorandum AM 2023-004 concluded that NIL collectives paying 80-100% of donations to athletes confer substantial private benefit and fail the operational test for 501(c)(3) status, so contributions to them are generally not tax-deductible.
Car Loan Interest Is Tax-Deductible Again: How the OBBBA $10,000 Above-the-Line Deduction Works for U.S.-Assembled Vehicles From 2025 Through 2028
The OBBBA restores a personal car-loan interest deduction—up to $10,000 per year, above-the-line, for tax years 2025 through 2028—on new U.S.-assembled vehicles financed after December 31, 2024. Mechanics covered include the MAGI phase-out starting at $100K single / $200K joint, Form 1098-VLI reporting beginning in 2026, mandatory VIN entry on Form 1040, and edge cases for refinances, trade-ins, leases, and co-signers.
Personal Use of a Company Vehicle: Imputed Income and W-2 Reporting
Personal use of a company car is taxable wages. This guide compares the three IRS valuation methods — Annual Lease Value, cents-per-mile (72.5¢ for 2026), and the $1.50 commuting rule — with worked examples and W-2 reporting steps.
Recording Sales Tax You Collect: A Liability, Not Revenue
Sales tax you collect belongs to the state, not your revenue line. Here are the journal entries, the month-end reconciliation routine, and the multi-state economic nexus rules that keep your books audit-ready.
Recording Sales Tax You Collect: A Liability, Not Revenue
Sales tax you collect belongs on the balance sheet as Sales Tax Payable, never on the income statement. Split each taxable sale into Sales Revenue and a tax liability, keep one account per jurisdiction, and reconcile so the payable zeroes out at filing time.
The Section 1375 Sting Tax: How Former C Corps Pay 21% on Passive Income and Lose Their S Election After Three Years
Section 1375 imposes a flat 21% sting tax on S corporations that carry C-corp earnings and profits when passive investment income exceeds 25% of gross receipts, and three consecutive years over that threshold terminates the S election automatically. This guide walks through the excess net passive income formula, the three-year cliff under Section 1362(d)(3), and three planning moves to defuse exposure before year-end.