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Should I Take the Educational Tax Breaks or My Child?

Every year, a group of adventurous souls decides: This is the year I’m going to prepare my own tax return! While we certainly applaud an individual’s right to establish self-reliance and try to save money on preparation fees, it’s rarely a good idea.

Who should take the educational tax breaks, me or my child?

That’s a great question! The answer is: It depends.

You check your mail and you see the return address, IRS. Your first thought? Well, that can’t be good. You open up the letter and you read that you’re being audited. Look on the bright side – less than 1% of returns get audited each year, you’re just one of the lucky ones! All jocularity aside, there’s nothing to panic about.

The IRS recently issued a warning to taxpayers who are seriously delinquent on their tax debt - you may be unable to attain a new passport or renew your existing one.

The Ohio Bureau of Workers’ Compensation (BWC) Board of Directors has announced they have approved a 20% cut in premiums for private employers. The cut was proposed by BWC’s Director and CEO.

The Treasury Department and the IRS have issued guidance that provides a safe harbor for calculating depreciation deductions from passenger vehicles that qualify for the 100% additional first year depreciation deduction.

First, a joke about catch up…

“Three tomatoes are walking down the street…papa tomato, mama tomato and baby tomato. Baby tomato starts lagging behind and papa tomato gets really angry, goes back and squishes him and yells… CATCH UP!!!!”

That joke isn’t going to get a lot of laughs at the IRS (alright, I admit it won’t get laughs anywhere else either) as they try to get caught up after the longest government shutdown in U.S. history. The shutdown, which lasted 35 days and affected the majority of the IRS’s workforce, has had a profound impact on an agency that had already been running very lean.

The IRS recently provided guidance to real estate investors regarding the Qualified Business Income (QBI) deduction under the Tax Cuts and Jobs Act (TCJA.) One of the weaknesses of the QBI provision of the TCJA was a lack of clarity in section 199A, which allows some taxpayers with pass-through businesses (e.g. LLCs and S-Corps,) to deduct 20% of their qualifying income.