| Forms of Internal Revenue Service Guidance |
| Congress passes laws that form the Internal Revenue Code, the backbone of our federal income tax system. But those laws do not answer every taxpayer's specific questions about how to handle certain transactions and circumstances. Thus, the Internal Revenue Service has developed regulations, rules, and procedures in order to give guidance to individual taxpayers.More... |
| Going into Business |
| The costs of getting a business started are capital expenses. If the costs qualify as business start-up costs, organizational costs for a corporation, or organizational costs for partnership, they can be amortized and recovered over a period of 60 months or more.More... |
| Bartering |
| The fair market value of the value of the goods and services exchanged must be included in the gross income of both parties.More... |
| Over-the-Counter Drugs and Flexible Health Spending Accounts |
| The Internal Revenue Service and the Treasury Department have concluded that certain over-the-counter drugs can be paid for with pre-tax dollars through health care flexible spending accounts. The purpose of flexible spending arrangements is to help employees pay the costs of their health care, and this clarification is in line with that goal now that so many prescription drugs have moved to the over-the-counter market. In addition, the IRS has clarified that reimbursements for non-prescription over-the-counter drugs by a flexible spending arrangement and other employer health plans are excluded from income if the transactions are properly substantiated by the employee-taxpayer. However, not all over-the-counter purchases are covered by the favorable treatment. Amounts paid by an employee for dietary supplements such as vitamins that are merely beneficial to the general health of the employee or the employee's spouse or dependents are not reimbursable or excludable from gross income.More... |
| Family Partnerships |
| Under certain circumstances, Congress permits income splitting among numerous family members to avoid higher tax brackets by the use of the "family partnership." If capital is a material income-producing factor in the business, a family member will be recognized as a partner for federal income tax purposes only if he or she acquires a genuine capital interest in a partnership through a bona fide transaction. He must actually own the partnership interest, and he must actually control it. The transfer may be accomplished by gift or by a purchase. Capital is an income-producing factor if the operation of the business requires substantial inventories or investments in buildings, machinery, or equipment. More... |
Frank M. Polasky Attorney PLC
Attorney at Law
