Joint Returns: Spouses Are Guilty Until Proven Innocent
When you got married, you knew it was for “better or worse.” But you might not know about laws that hold you responsible if your spouse cheats on a tax return. Married couples filing jointly should be aware that: To illustrate how the law works, let’s say you have a wage-earning job and your spouse […]
Do You Qualify for the 0% Tax Rate for Capital Gains and Dividends?
Many people currently qualify for a 0% federal income tax rate on net long-term capital gains (LTCGs) and qualified dividends earned in their taxable accounts. Investment assets that may qualify include marketable securities and real estate held outside of tax-favored retirement accounts. Here’s how you might be able to take advantage of this favorable rate […]
Top 10 Tax Breaks to Consider on Extended Returns
If you requested an extension for your 2023 federal income tax return, you have until six months from the original due date — October 15, 2024, to be exact — to wrap things up. This extra time may give you the opportunity to lower your overall tax bill and possibly increase a refund. Here are […]
Can You Deduct Medical Expenses? Here Are the Rules
Under tax law, medical expenses can be deducted as an itemized deduction on your federal income tax return only to the extent that they exceed 7.5% of adjusted gross income (AGI). But it can be difficult to actually claim a deduction for many people because of the requirements. To Itemize or Not to Itemize? First […]
Seniors: You Might Not Want to Sell that Highly Appreciated Home
In recent years, the residential real estate markets in many areas have surged. That means there are more seniors with highly appreciated homes than ever before. If you’re facing this situation, you might be rightfully concerned about the potential tax hit on the sale. Here’s a tax-saving strategy to consider. Home Sale Tax Basics If […]
Delinquent Taxpayers May Experience Passport Issues
Let’s say a person is planning to take a plane trip out of the country. And further suppose that individual owes the federal government a fair amount of back taxes. The person may not be able get a passport if he or she owes the government a significant amount of back taxes. The IRS is […]
Monitoring Household Expenses: Monthly Subscription Services
Quick, how many subscription services are you currently paying for? Whatever the number, it’s likely you missed one or two. Subscription services have been around for a long time – think newspaper and magazine subscriptions. Today, however, they’ve ballooned to include digital subscription services such as video and music streaming, internet and cell phone. Food […]
Planning for Taxable Gains and Losses
What’s the difference between capital gains and losses and ordinary gains and losses? The classification will have a major impact on your federal income tax obligations when you sell assets, such as investments, real estate, intangibles and other holdings. The classification of assets is generally straightforward, but the issue can be unclear in some situations. […]
New FTC Final Rule Bans Most Noncompete Agreements
Using a noncompete agreement or a noncompete clause in an employment contract has been a standard business practice for years. The Federal Trade Commission (FTC) estimates that about 30 million American workers — almost one out of every five — are subject to agreements restricting their rights upon termination of employment. But now the FTC […]
DOL Expands Overtime to Millions of Workers
In April 2024, the U.S. Department of Labor (DOL) issued a new final rule that’s slated to expand the number of workers who are eligible for overtime pay under the federal Fair Labor Standards Act (FLSA). It’s expected to affect four million workers. The rule, which dramatically increases the salary threshold for so-called exempt workers, […]
Updated Guidance on Business Vehicle Depreciation
The rules for deducting depreciation expenses on vehicles used for business purposes have been liberalized under current tax law, but they remain complicated. In addition, annual inflation adjustments make allowable depreciation deductions moving targets. (See “First-Year Depreciation Deductions under the TCJA,” below.) Here’s how to calculate depreciation deductions for cars, SUVs, pickups and vans used […]
Does Your Business Have a Detailed Weather Emergency Plan?
Weather emergencies take many forms and, depending on your location, you’re likely more vulnerable to some forms than others. These disasters — such as hurricanes, tornadoes, floods and wildfires — pose major risks to businesses. In fact, the Federal Emergency Management Agency (FEMA) estimates that about 25% of companies don’t reopen after a major disaster […]
How New Retirement Plan Emergency Savings Accounts Work
Starting in 2024, employers can offer their nonhighly compensated employees the option to participate in emergency savings accounts that are linked to their company defined contribution retirement plan accounts. This option was introduced in the SECURE 2.0 Act. Defined contribution plans include 401(k) plans. Employees can then make contributions out of their salary to fund […]
Money Matters – Buying versus Leasing a Car
Some people approach buying a car almost the way they approach marriage, “until death do us part.” Others prefer to keep their options open, trading in every few years for the latest body style, the hottest technology, or the highest horsepower. Whichever describes you best, we all face a similar decision when it comes to […]
Answers to Your Questions about Marital Status and Tax Returns
When a couple ties the knot or gets divorced, taxes are probably not the first thing on their minds. But many decisions that couples make do affect their tax returns — and the amount they ultimately owe the federal government. Here are some answers to some frequently asked questions about marital status and taxes. Q. […]
Federal Tax News for Individuals
Little Bits of Income Still Count It’s easy to overlook smaller amounts of income when it’s time to prepare your tax return. Taxpayers must generally include all income, not just the amount they find on an employer-generated W-2 form. For example, did you make goods and sell them on an online marketplace or at a […]
Key Rules for Home Office Deductions
Do you work from home all or part of the time? If you’re self-employed and meet certain requirements, you can write off a portion of your home office expenses, even if you perform work at other locations. The deduction may be based on the actual expenses you’re able to substantiate — or it may be […]
Smart Ways to Detect Internal Fraud
Internal fraud is difficult to detect, which is understandable given the wide variety of techniques that range from stealing cash and supplies, to falsifying expense reports and benefit claims, embezzling funds, and accepting kickbacks from vendors, contractors, and suppliers. But catching dishonest employees isn’t impossible if you focus on the task, take a strong stand […]
Social Security Tax Update: How High Can It Go?
Employees, self-employed individuals and employers all pay the Social Security tax, and the bite the Social Security tax takes gets bigger every year. Here’s what you should know — and why you should be concerned. Social Security Tax on Employee Wages As an employee, your wages are hit with the 12.4% Social Security tax up […]
Follow Detailed Recordkeeping Rules for Vehicle Expense Deductions
Many business owners fail to follow the strict tax rules for substantiating vehicle expenses. But if your business is audited, the IRS will most likely ask for mileage logs if you deducted vehicle expenses — and it tends to be especially critical of the amount deducted if you’re self-employed or you employ relatives. While the […]
New Twists and Turns Taken by EV Credits
Did you buy an electric vehicle (EV) in 2023? Under the Inflation Reduction Act (IRA), passed late in 2022, you may be eligible for a new-and-improved tax credit, beginning on your 2023 federal income tax return. But the new law also bars certain high-income taxpayers from claiming the credit. What’s more, if you’re looking to […]
IRS makes changes for reporting 1099s, W-2s and other forms
Starting for tax year 2023, if you have 10 or more information returns, they must be filed electronically. This also includes Forms W-2, e-filed with the Social Security Administration. Final e-file regulation details are linked here: https://www.irs.gov/filing/e-file-information-returns
Itemizing Deductions on Your Federal Income Tax Return
Once the 2023 tax year is over and the numbers are generally set in stone, you can itemize deductions on your federal income tax return if your total allowable itemized write-offs for the year exceeds your standard deduction allowance for the year. Otherwise, for 2023, you will claim the standard deduction, which is relatively high […]
How Municipal Bonds Can Help Investors Manage Tax Exposure
Municipal bonds (often referred to as “munis”) can be attractive to income-seeking investors because they provide an income stream exempt from federal and, in certain cases, state and local income taxes. Like other fixed-income investments, munis involve risk. But as part of a broadly diversified portfolio, they can offer you an effective way to increase […]
Qualified charitable distributions allow eligible IRA owners up to $100,000 in tax-free gifts to charity
WASHINGTON —The Internal Revenue Service today reminded individual retirement arrangement (IRA) owners age 70½ or over that they can transfer up to $100,000 to charity tax-free each year. These transfers, known as qualified charitable distributions or QCDs, offer eligible older Americans a great way to easily give to charity before the end of the year. […]
Year-End Holiday Parties and Gifts: What’s Taxable?
The holidays are just around the corner, and now is the time for employers to start thinking about treating their employees with holidays parties or gifts. Such gestures are always a nice idea. Plus in a tight labor market, they can be a smart way to show appreciation and boost retention. But you need to […]
Will Your Crypto Transactions Be Reported on a Form 1099?
Some taxpayers may be unaware of all the federal tax reporting requirements for cryptocurrency transactions — especially when it comes to issuing and receiving a Form 1099 for 2023. If you buy something with cryptocurrency, you won’t receive one. However, you may receive a Form 1099 if you receive a crypto payment. There are several […]
Update on New Retirement Account Catch-Up Contribution Rules
The Setting Every Community Up for Retirement Enhancement (SECURE) Act brought numerous changes to the retirement and estate planning landscape in late 2019. Congress followed up with the SECURE 2.0 Act in late 2022. This law introduced some additional taxpayer-friendly changes, including an increase in the limits for retirement account catch-up contributions for individuals who […]
How to Curb Automotive Hacking
Automotive hacking is on the rise. The number of cyberattacks into vehicle computer systems increased by a staggering 380% from 2021 to 2022, according to Upstream’s 2023 Global Automotive CyberSecurity Report. Don’t buckle up without taking precautions. What Is Automotive Hacking? The term “automotive hacking” refers to attempts by outsiders to use technology to invade […]
How the Risk of Detection Reduces Fraud
Do your employees feel like they’re being watched? If they don’t, they may be emboldened to steal. In the same way that putting more police officers on streets tends to reduce crime, making your company’s anti-fraud activities more visible can discourage fraud perpetrators. Good internal controls are critical to preventing fraud. But many companies have […]