Taxpayer asks:
Hello,
I am writing in behalf of my daughter who has a stimulus check from last year that she cant get cashed. She and her husband or soon to be ex have received a $900.00 check that she cant get cashed. He isn’t playing fair and has moved out of the state and is refusing to sign the check or even give her the correct address. I had her mail the check off to him with a stern and direct note attached that he is to sign and send it back uncashed and she would send him his part on return. She sent it off signature required and it was returned as unknown address or person. The address she sent it to was the last known address the divorce attorney used to contact him. What can she do? Their boys are the ones suffering the most by not being able to cash this check…. any ideas?
Taxgirl says:
That stinks. But unfortunately, there’s not a whole lot that you can do. By law, each of your daughter and her ex is considered to receive half of the stimulus payment.
The IRS doesn’t want to play referee in a relationship. If the check is made out to the both of you, the job of the IRS is more or less over. This doesn’t sound like an issue which would lend itself to innocent spouse relief, it’s an issue of endorsing the check. That really makes it more of an asset/income split issue for the divorce.
Since you indicated that there’s a divorce attorney involved, I would suggest contacting him or her to have the court order him to sign the check. That may be tricky because of the location issue.
Other than that, I have no real suggestions (perhaps one of my colleagues might?). Your daughter has already filed the return together with her ex, so she can’t amend to file separately without his consent. And that’s clearly not going to happen.
What I would definitely advise against: signing his name to the check (don’t, don’t, don’t!) or otherwise trying to cash it without his permission. That constitutes fraud and/or theft and would make a bad situation worse.
It just sounds like a terrible situation. Sorry that I can’t be of more help.
Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.
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Taxpayer asks:
Thanks for taking the time to consider my question.
I travel extensively for my job. When I travel, I have an expense account for meals and hotels. My company recently moved to a “no alcohol” policy on expense accounts. We cannot put any alcohol on our expense accounts and we cannot apply for reimbursement for any alcoholic beverages.
My question is, if I have an occasional glass of wine for dinner, can I deduct that on my taxes as travel costs?
Taxgirl says:
I say yes, assuming that you otherwise meet the criteria for deducting your meals.
To the extent that your employer provides reimbursement for your meals, the reimbursement is not taxable to you (or deductible).
For meal and entertainment expenses which are not reimbursed by your employer, your deduction is limited to 50% of the expenses. They would be treated as unreimbursed job expenses and reported on Schedule A as a miscellaneous deduction. This means, of course, that they are subject to the dreaded 2% floor – in other words, you can only deduct those that exceed 2% of your AGI.
You can use the per diem method or the actual cost method when calculating the deduction. In your case, it makes sense to use the actual cost method since you are otherwise being reimbursed (or taking advantage of your expense account).
The normal rules of travel (business versus pleasure, etc.) still apply.
The key to your question, really, is whether your meals – and that additional glass of wine – is considered “lavish or extravagant.” The IRS will not allow a deduction for “lavish or extravagant” expenses. An expense is not considered lavish or extravagant if it is reasonable based on the facts and circumstances.
So use common sense. I think it’s reasonable to have a nice glass of wine at dinner. But I’m thinking a nice Sancerre or Shiraz – not a 1998 Petrus Pomerol. Similarly, I think you can justify a glass or two but not the cost of all night vodka shots. But really, it’s up to the discretion of the IRS as to what’s “reasonable” under the circumstances.
It’s worth noting that the IRS does not have an official position on alcohol beverages, nor a definitive amount for what’s considered “reasonable” (though the per diem amounts can be used as a guideline). What’s reasonable for one person may not be reasonable for another – just ask Hugh Heffner, who argued that very thing with the IRS.
Keep excellent receipts, use good judgment – that’s the best advice that I can offer.
Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.
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Taxpayer asks:
Hello,
I am an independent contractor and work with teachers. If I purchase gift cards to award those that completed required assessments by the deadline given. Can I deduct the cost of these gift cards?
I would appreciate any information you can provide.
Many thanks,
Taxgirl says:
I love this question because it’s an example of how the specific facts really shape the answer!
In your case, I say yes. And I also believe that it’s not taxable to the teachers. Here’s why:
If an employer gives a gift or award to an employee, the IRS generally considers it compensation and not a gift. There’s an exception for de minimis gifts – you know, gift baskets, boxes of chocolate, those inexplicable little inspirational crystal trophies… Those are considered to have such little value that they are not taxable to the recipient as compensation and the value of the items is generally deductible to the employer as part of the cost of doing business.
There is a specific exception to the exception (don’t you just love tax law!) for gift cards. Gift cards are easy to value and are treated just like cash for tax purposes. They are never considered de minimis which means they are taxable to the employee.
Head spinning yet?
But wait. You’re not the employer here. And they’re not your employees. You have an independent contractor relationship, right? This means that the cards should not be taxable to the recipients as income and they are deductible to you as part of the cost of doing business. Unless, of course, you’re giving the gift cards with the expectation of future services – but that doesn’t sound like the case here.
Whew. Got that?
For specific information on holiday gifts and bonuses, see my prior post on the subject.
Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.
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Taxpayer asks:
I have an employee whose child care center fees just went up. So to take some of the burden off her shoulders we are paying for the rest it adds up to $300 a month. Now-her babysitter is her sister in law who works part time but does babysitting on the side. My employee is not going to pay her using 1099. How can we handle this? So our company can use this as a tax write off and she can properly handle it?
Taxgirl says:
Ooh yuck.
I understand wanting to keep your employees happy. I love my employees, I want to keep them happy. But you can’t get yourself into trouble doing it. So, tread carefully.
You can’t touch offering the babysitter money because you’ll be dragged into this under the table mess. Trust me, as someone who has seen both sides of that mess, you want to stay out of it. As much as you may love your employee, what she’s doing by not reporting income paid to the babysitter is wrong.
I see two options:
1, Offer your employee more money and tell her to use it as she sees fit with the hope that it goes to shoulder the extra burden of increased childcare expenses. You must include this extra income on her form W-2 at the end of the year. But your employee is still ahead.
2, Set up a pre-tax Flexible Spending Account that the employee can use for childcare expenses. It’s still wages but it’s pre-tax so there’s a savings to your employee. There are some limitations, so make sure that you check it out. In this case, the downside to the FSA (which is a great option for most employers) is that I suspect your employee’s babysitter won’t provide her SS number. That won’t stop you from setting up the plan but it may stop her from using it.
It’s a tricky situation because clearly, you want to help. But your employee is causing this to be a bigger problem than it needs to be. So here’s my final advice: don’t make your employee’s problem your problem. It’s not worth it. You don’t need an audit or an investigation into your payroll over a few thousand dollars a year.
Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.
Have a question? Ask the taxgirl! – Now on Facebook!
