Tax News

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,...

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...

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...

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...

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...

Employers that want to use a per diem rate to reimburse employees’ lodging, meals, and incidental expenses on business trips within the continental U.S. (CONUS) can use either the IRS’s high-low m...

A surviving spouse who inherits an IRA, including a Roth IRA, may roll over the funds to his/her own IRA. Doing so allows the surviving spouse to name his/her own beneficiaries and postpone IRA distri...

If you buy a home testing kid, you may treat it as a deductible medical expense if you itemize deductions (IR-2021-181). It is an expense for the diagnosis of a medical condition. The cost may also be...

Planning ahead for health insurance for 2022? If you have affordable minimum essential health coverage from an employer or are covered by Medicare, you may not use the premium tax credit to help pay f...

A state correctional officer won a $500,000 award for back pay from a discrimination lawsuit.  This consisted of $144,304 for compensatory damages, $355,696 for back pay, and $31,864 for interest; he...

The mid-year report from National Taxpayer Advocate Erin M. Collins contains an assessment of the 2021 filing season. It assesses the IRS response to 73 administrative recommendations that the Advoca...

If an employer has a leave-based donation program, employees may contribute their unused leave time (e.g., vacation, sick, and personal days) for the benefit of employees who need the time. Usually, e...

Gain on the sale of a principal residence is tax free up to $250,000 ($500,000 on a joint return) if certain conditions are met. The question put to a district court was whether the basis in the home ...

When an IRA owner died, the account passed to a Trust. Some months after the death, the trustee transferred the funds into a regular brokerage account to be able to trade stocks. But he soon learned t...

Each year the IRS releases a book providing insight into IRS activities for the government’s fiscal year ending September 30. The 2020 Data Book covers October 1, 2019, through September 30, 2020 (I...

Each year the IRS compiles a list of the “worst of the worst tax scams.” This year, the scams are grouped into categories: Pandemic-related scams, such as Economic Impact Payment theft and une...

The Affordable Care Act has come before the U.S. Supreme Court three times. In the latest challenge, the Court declined to rule on a constitutional challenge to the so-called individual mandate in the...

The American Rescue Plan Act of 2021, which was enacted on March 13, 2021, greatly expanded the dependent care credit for 2021. It raised the cap on expenses taken into account in figuring the credit ...

The IRS has the discretion to grant extensions of up to one year for certain tax actions for those impacted by federal disasters. The Further Consolidated Appropriations Act, 2020, created a mandatory...

Despite concerns about inflation, the interest rates on overpayments and underpayments are unchanged from the second quarter of 2021 (Rev Rul. 2021-10). The rates for the third quarter of 2021 beginni...