Archive for February, 2011

Breastfeeding Pumps Now Deductible, IRS Rules

Wednesday, February 16th, 2011

Breast pumps and other lactation supplies are now tax deductible as medical expenses, the Internal Revenue Service said Thursday, reversing a long-held position.
The new ruling means that families can use pre-tax funds from their flexible spending accounts and health savings accounts for these supplies. Breast pumps typically cost more than $200 and, along with supplies, can run as high as $1,000 in the first year of a baby’s life.
Read More » [MSNBC]

Wrap Fees

Wednesday, February 16th, 2011

“Wrap Fees” charged to IRA holders qualify for tax favored treatment are not counted as payins to the IRA if paid separately by the owner, IRS privately rules. The fee covers investment planning and broker commissions. Although the payment of broker commissions is usually treated as a IRA payin, that rule doesn’t apply to wrap fees because the charge doesn’t vary with the number of trades made. Instead it is based on a percentage of total assets under management. These wrap fees can be deducted as a miscellaneous itemized deduction on Schedule to the extent the total exceeds 2% of the filer’s adjusted gross income.

IRS Gives a Road Map for Audits of Repair and Maintenance Expenses

Wednesday, February 9th, 2011

The issue of whether maintenance costs are deductible as incidental repairs or must be capitalized under IRC §263A continues to trip up taxpayers, despite guidance and proposed regulations from the Internal Revenue Service. Recently, the IRS issued an audit-technique guide that gives insight into how it will examine taxpayers’ treatment of repair and maintenance costs.

Read more » [Journal of Accountancy]