Tax News

November 25, 2019 10:21 pm

Homeowners who meet ownership and use tests can exclude gain on the sale of a principal residence up to $250,000 ($500,000 on a joint return). Taxpayers who hold property for investment can defer gain...

November 25, 2019 10:20 pm

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 2020 amounts (...

November 25, 2019 10:18 pm

The IRS has announced cost of living adjustments for more than 60 tax items for 2020 Act (Rev. Proc. 2019-44). All of the tax brackets have been affected, as well as the taxable income breakpoints for...

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...

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Tax Glossary

Exemption

A fixed deduction allowed to every taxpayer, except those who may be claimed as a dependent by another person. Extra exemption deductions are allowed for a spouse on a joint return and for each qualifying dependent. A deduction of $3,400 is allowed for each exemption claimed on 2007 returns, but the deduction is phased out for certain high income individuals.

More terms