Tax News

The IRS treats cryptocurrency as property. This means when your Bitcoin or other digital asset is used to make a purchase, you have to figure gain or loss on the transaction. You can’t duck this res...

Usually, there’s a 10% penalty for distributions from an IRA. qualified employer plan, or a commercial annuity before age 59½. However, the penalty does not apply if distributions are taken in a se...

The National Taxpayer Advocate Erin M. Collins issued the required annual report to Congress detailing the past filing season and making recommendations for future legislation (IR-2022-11; https://www...

Transportation fringe benefits, which include free parking, transit passes, and van pooling, may be funded either by the employer as a tax-free benefit up to a monthly dollar limit ($280 per month in ...

Beneficiaries of 529 plans may withdraw up to $10,000 to pay their student loan debt. The funds may also be used to pay student loan debt of siblings. The dollar limit is for a lifetime. The IRS has m...

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...

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...

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...

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...

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...

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...

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 (...

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...

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...

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...

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...

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...

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 ...

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...

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...