Tax News

February 22, 2022 1:50 am

If you received advance child tax credits in 2021, you’re likely to receive a special IRS Letter 6519 (COVID Tax Tip 2022-03). Do not throw it out. It will be used to help you figure the amount of t...

January 2, 2022 10:20 pm

If a business has losses year after year, the IRS may disallow them on the grounds that the owner is engaged in a hobby activity and lacks a profit motive. A finding that an activity is a hobby becaus...

January 2, 2022 10:18 pm

A self-employed individual may deduct various business expenses. However, as a recent Tax Court decision points out, you must actually function as a going concern (an active trade or business) to take...

January 2, 2022 10:15 pm

The IRS announced the optional standard rates that can be used for certain driving costs in lieu of deducting actual costs (Notice 2022-3). For 2022, the rate for business driving is 58.5 cents per mi...

December 13, 2021 1:37 am

The CMS announced premiums and deductibles for Medicare in 2022 (CMS.gov, 11/15/21). The basic Part B monthly premium for 2022 is $170.10, or $21.60 more than in 2021. For those with modified adjusted...

December 13, 2021 1:35 am

An individual received distributions from several retirement plans, reported their existence on his self-prepared 2017 income tax return, but only included a portion of the distributions in income. He...

December 13, 2021 1:32 am

Each year, the IRS can adjust various amounts used to figure contributions, benefits, deductions, and credits related to qualified retirement plans and IRAs. The IRS has now done so for 2022 amounts (...

December 13, 2021 1:29 am

No longer are communications restricted to written notices. You may now request to receive communications from the IRS in large print, Braille, audio (MP3), plain text files, or Braille ready file. Yo...

December 13, 2021 1:27 am

A couple whose household income exceeded 400% of the federal poverty level had to repay the premium tax credit for 2018 (Amburgey, TC Memo 2021-124). They applied for medical insurance through the gov...

December 13, 2021 1:24 am

Victims of disasters may receive goods and financial help from organizations, such as the Red Cross. IRS Commissioner Rettig confirmed that such payments are not taxable to recipients. Gifts from orga...

December 13, 2021 1:23 am

The IRS adjusts more than five dozen items annually for inflation. Due to significant inflation over the past year, the tax brackets and many items have been increased for 2022 (Rev. Proc. 2021-45). T...

December 13, 2021 1:19 am

Married persons with a divorce or agreement finalized before 2019 may continue to handle alimony under old rules: payments that meet the definition of alimony are deductible by the payor-spouse and ta...

December 13, 2021 1:17 am

The approximately 70 million Social Security beneficiaries will receive a cost-of-living adjustment (COLA) of 5.9% starting with the December 2021 benefits, which are payable in January 2022. This is ...

October 11, 2021 1:50 am

Despite indications of increased inflation, the interest rates on overpayments and underpayments are unchanged from the second quarter of 2021 (Rev Rul. 2021-17). The rates for the fourth quarter of 2...

October 11, 2021 1:47 am

In order to claim losses from real estate activities, other than a $25,000 loss allowance for active participants with adjusted gross income below a set amount, a taxpayer must be a “real estate pro...

October 11, 2021 1:44 am

A qualifying child many entitle a taxpayer to a variety of breaks, including head of household status, the earned income credit, the child tax credit, and Economic Impact Payments (EIPs). Before 2018,...

October 11, 2021 1:42 am

Individuals with investment income may be subject to an additional Medicare tax called the net investment income (NII) tax. One couple living in France wanted to use their foreign tax credit carryover...

October 11, 2021 1:39 am

Vehicles acquired for business can result in tax write-offs. For vehicles that are purchased, there’s depreciation as long as you opt to deduct your actual costs and don’t use the IRS standard mil...

October 11, 2021 1:33 am

A best-selling crime fiction writer earned considerable income each year from her publisher. She reported all the income, but only treated a portion of it as trade or business income subject to self-e...

October 11, 2021 1:31 am

When property is sold due to an involuntary conversion, gain is deferred if qualified replacement property is purchased within a replacement period. When livestock (other than poultry) is sold because...

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Tax Glossary

Like-kind exchange

An exchange of similar assets used in a business or held for investment on which gain may be deferred.

More terms