Rental Income and Expenses

A taxpayer who rents out property is required to report rental income to the extent of the cash or the fair market value of any property received. Most individuals report their operations to the Internal Revenue Service using the cash basis method of accounting. Therefore, they must include rental income when it is actually received. An amount paid by a tenant to cancel a lease is rental income that is taxable in the year received.

General Litigation

Under certain circumstances, a taxpayer is entitled to recover the reasonable litigation or administrative costs that he or she paid to defend his or her position to the Internal Revenue Service or to the courts.

Filing Tips

When you are ready to file your tax return, the Internal Revenue Service suggests that you take an extra few minutes to double check certain items to prevent mistakes that could cost you penalties and interest or delay your refund.

Work-Related Education Expenses

If you are an employee, you may be able to deduct the costs of qualifying work-related education, but only if you itemize instead of taking a standard deduction. The deduction allowed would be the amount by which your work-related education costs plus other job and certain miscellaneous expenses exceed two percent of your adjusted gross income. If they don't exceed this floor, no deduction is allowed. If you are self-employed, you may deduct the costs of work-related education directly from your self-employment income.

Health Savings Accounts

In an attempt to deal with the high cost of medical care in the United States, Congress has passed a tax law allowing certain taxpayers to set up a health savings account (HSA), a tax-exempt trust or custodial account for the payment or reimbursement of medical expenses.