Tax News

November 3, 2019 8:25 pm

More than 69 million Social Security beneficiaries will receive a cost-of-living adjustment (COLA) of 1.6% starting with the December 2019 benefits, which are payable in January 2020. This COLA adjust...

November 3, 2019 8:23 pm

ABLE accounts are special savings accounts for certain disabled individuals that can be used without causing the loss of government benefits related to the disability. In 2018, the IRS indicated it wo...

November 3, 2019 8:21 pm

In 2014, the IRS said that virtual currency, such as Bitcoin, is property and not currency (Notice 2014-21). Thus, individuals receiving payments in cryptocurrency held for investment means reporting ...

October 6, 2019 11:04 pm

For owners of pass-through entities to claim the 20% qualified business income (QBI) deduction, they must be in a trade or business. When it comes to real estate activities, it’s sometimes difficult...

October 6, 2019 10:58 pm

A wife was ordered by a divorce decree to transfer $10,000 from her retirement account  to her former husband. She instructed her broker to transfer this amount to an IRA set up for the former husban...

October 6, 2019 10:57 pm

A high school senior with a perfect attendance record and good grades was entered by the school into a “Strive to Drive” drawing held by a local car dealership. She won a Jeep Renegade valued at o...

October 6, 2019 10:55 pm

The IRS has announced that the interest rates applicable to overpayments and underpayments of federal taxes for the fourth quarter of 2019 are the same as for the third quarter of the year (Rev. Rul. ...

October 6, 2019 10:53 pm

Compensatory damages received for a personal physical injury or sickness are excludable from gross income. Damages for any other personal reason, such as defamation, as well punitive damages for any r...

September 3, 2019 9:09 pm

In certain situations, an employer is required to distribute funds held in the company’s retirement plan, after withholding 20%. But what happens if the individual fails to cash the check?The IR...

September 3, 2019 9:08 pm

Because of changes made by the Tax Cuts and Jobs Act, many taxpayers didn’t pay enough in income taxes through withholding and estimated tax payments to satisfy the safe harbors for avoiding  estim...

September 3, 2019 9:05 pm

It’s increasingly common for individuals to have their DNA tested through Ancestry.com and other sites in order to learn more about their family background. One site—23andMe—also offers DNA test...

September 3, 2019 9:04 pm

Employees can file a revised Form W-4 to change their wage withholding for 2020. The IRS announced the release of a new online withholding calculator estimator to make it easier for an employee to fig...

September 3, 2019 9:02 pm

Several years ago, the IRS concluded that cryptocurrency, also called virtual or digital currency, is property not currency (Notice 2014-21). As such, you must report gain or loss on every transaction...

August 2, 2019 3:30 am

Distributions from health savings accounts (HSAs) to pay qualified medical expenses are not taxable. These accounts must be combined with a high-deductible health plan (HDHP). The question has been: C...

August 2, 2019 3:28 am

A married couple filed a joint return for one year that did not include the wife’s Social Security benefits. These benefits resulted from her being formally classified as disabled. In the following ...

August 2, 2019 3:26 am

Pursuant to the Bipartisan Budget Act in 2018, the IRS has created a new tax form for those age 65 and older at https://www.irs.gov/pub/irs-dft/f1040s--dft.pdf. The form, which can be used for the 201...

August 2, 2019 3:23 am

A taxpayer took a distribution from her IRA of $524,981.89 to pay for the purchase of a home while she waited for the sale of her former home to close. When it did, she overnighted a check to the fina...

August 2, 2019 3:20 am

On July 1, 2019, President Trump signed into law the Taxpayer First Act (P.L. 116-25), which is legislation focused on IRS practices and procedures. The IRS is supposed to enhance customer service to ...

June 30, 2019 10:45 pm

Nina Olson, the National Taxpayer Advocate, has released her final report (she’s retiring after serving for 18 years) (IR-2019-119, 6/20/19). The report reviews the 2019 tax filing season and lists ...

June 30, 2019 10:43 pm

Prior to 2018, homeowners could exclude from gross income the cancellation of a mortgage on their principal residence up to $2 million. This exclusion was limited to a loan to buy, build, or substanti...

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Tax Glossary

Straddle

Taking an offsetting investment position to reduce the risk of loss in a similar investment.

More terms