Article Highlights: Tax-Free Income from Working AbroadForeign Earned Income and Housing ExclusionsForeign Self-Employment IncomeClaiming or Revoking the Exclusion U.S. citizens and resident aliens are taxed on their worldwide income, whether they live inside or outside of the U.S. However, qualifying U.S. citizens and resident aliens who live and work abroad may be able to exclude [...]
Article Highlights: Tax ReformUnderpayment PenaltiesW-4 Modifications for 2020Withholding EstimatorPenalty Abatement Was your 2018 federal tax refund less than normal, or – worse yet – did you actually owe tax despite usually getting a refund? If so, this was primarily due to the last-minute passage of the Tax Cuts and Jobs Act at the end of [...]
Article Highlights: IRS FocusAbout CryptocurrencyTax Treatment IRS Compliance ProgramLetters Being Sent If you own cryptocurrency, you need to know that the IRS has owners of cryptocurrency in its sights because many cryptocurrency owners are not reporting or paying taxes on their cryptocurrency transactions. In fact, the IRS is so focused on this issue that it [...]
Article Highlights: Tax Loss for a Security Sold or That Is WorthlessProving Worthlessness Selling a Worthless Stock by Year-endBrokers May Accommodate Clients Capital Loss Deduction If you are like most investors, you occasionally will pick a loser that declines in value. Sometimes, a security can even become worthless when the issuing company goes out of [...]
Article Highlights: Trading in a VehicleSelling a VehicleGifting a VehicleDonating a Vehicle to Charity If you are buying a new car, are you wondering what to do with the old one? You actually have a number of options, some of which have tax implications and some of which don't. These options include trading the car [...]
Article Summary: Foreign Account Reporting RequirementFinancial Crimes Enforcement NetworkPenalties for Failure to FileType of Accounts AffectedForm 8938 Filing Requirements U.S. citizens and residents with a financial interest in or signature or other authority over any foreign financial account need to report that relationship by filing FinCEN Form 114 if the aggregate value of the accounts [...]
Article Highlights: IRS Enforcement CampaignVirtual CurrencyValuationTransactionsCharacter of the Gain or LossForeign Currency TransactionsForeign Bank and Financial Account (FBAR) ReportingPayment for Goods and ServicesAcquiring Virtual CurrencyVirtual Currency MiningEmployee PaymentsIndependent Contractor Payments1031 Exchanges The IRS announced in late July 2019 that it is ramping up its campaign to ensure that taxpayers with cryptocurrency transactions report these transactions [...]
Article Highlights: Income as a FactorFiling Status as a Factor85% Maximum TaxableBase AmountsDeferring IncomeMaximizing IRA Distributions Whether your Social Security benefits are taxable (and, if so, the amount that is taxed) depends on a number of issues. The following facts will help you understand the taxability of your Social Security benefits. For this discussion, the [...]
Article Highlights: Collecting TipsTip SplittingService ChargesRecord KeepingEmployer Reporting Allocated Tips Anyone who collects tips must include those tips in their taxable income. This requirement is not limited to waiters and waitresses; it applies to anyone who collects tips, including taxicab, Uber, Lyft, and similar drivers; beauticians; porters; concierges; and delivery people. Tips are amounts freely [...]
August 12 - Report Tips to Employer If you are an employee who works for tips and received more than $20 in tips during July, you are required to report them to your employer on IRS Form 4070 no later than August 12. Your employer is required to withhold FICA taxes and income tax withholding [...]
