Kostecke CPA

All posts in Tax Preparation

The Nine Factors and the Hobby Loss RuleWhether the IRS considers you a hobby or business is not as simple as looking at how profitable you are. Unfortunately, you may be running a business that is not profitable this year and has never been profitable, but it still isn’t a hobby.

There is a 9-factor test that the IRS uses to determine if your business is a legitimate Read more


Do I have to pay taxes on that?Sometimes things happen that result in income to you, but you don’t know if you have to pay taxes on it in some instances. Do I need to report it on my tax return or not? Here are a few of those items and how they should be treated for taxes.

On Which Income Types Must I Pay Taxes?

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The American Opportunity Tax CreditThe American Opportunity Tax Credit, or AOTC, is the best way you can recoup some of your investment in your family’s education. You can get up to $2500 in tax credits if you qualify.

Qualifying for the American Opportunity Tax Credit

Here are the qualifications: Read more


The clothing tax deductionI often hear from clients that they had to buy special clothes – could be a business suit for interviewing, or nice pants/shirts/shoes, etc., that they only wear at work. They want to deduct these costs as business expenses; taking advantage of whatever clothing tax deduction that is allowable by the IRS. Most of the time, these deductions are not Read more


Vetting a Prospective Tax PreparerThis time of year, I get calls from potential clients looking for somebody to prepare their tax returns. I really love this time of year because I love getting new clients. However, I know that it doesn’t do any good to bring in a lot of new clients if we are not right for each other. So I do my best to tell them about myself and answer Read more


Self-Employment TaxCompany picnics, parties and other events can be tax deductible, provided you have good documentation and understanding of the rules for tax deductible expenses.

Companies throw parties for different reasons. Sometimes it is primarily as a morale booster for employees Read more


what can i deduct from my taxesWhat meals are tax deductible business expenses? For most types of businesses and circumstances, the deduction is equal to half the cost when the purpose is clearly for business. Read more


Self-Employment TaxSmall business people, entrepreneurs, and independent contractors should know before they start that they will probably have to pay self-employment taxes on their net income. But just in case you hadn’t heard the news, you have to pay self-employment taxes on your net income! So what is self-employment tax anyway? Read more


Can I deduct my car?There are a lot of misunderstandings about deducting your car or truck expenses for business, so it’s important to understand how you do this properly without taking too much or too little as a deduction on your tax return.  To this set of frequently asked questions, here are six guidelines on taking mileage and depreciation that you Read more


Tax planning before filing your 2013 taxesIf you haven’t filed yet, here are four reason for doing some tax planning before filing your 2013 taxes.  For 2013’s taxes, there are new tax brackets, taxes, and phaseout limits that make tax planning even more important, as follows: Read more