On October 25, the Financial Accounting Standards Board (FASB) issued a simpler accounting option that will enable private companies to more easily measure certain types of shares they provide to both employees and nonemployees as part of compensation awards. Here are the details. Complex rules Many companies award stock options and other forms of share-based payments … Read More
Each year, the Treasury Inspector General for Tax Administration (TIGTA) is required by law to summarize the key challenges facing the IRS. For fiscal year 2022, the top challenge is the administration of tax law changes and pandemic relief benefits. The IRS was heavily impacted by the pandemic and unable to perform many of its … Read More
The Social Security Administration recently announced that the wage base for computing Social Security tax will increase to $147,000 for 2022 (up from $142,800 for 2021). Wages and self-employment income above this threshold aren’t subject to Social Security tax. Background information The Federal Insurance Contributions Act (FICA) imposes two taxes on employers, employees and self-employed … Read More
The IRS is sending out refunds averaging $1,189 to 430,000 taxpayers. This is the latest batch of refunds based on American Rescue Plan Act (ARPA) changes made after many taxpayers had already filed their 2020 returns. Generally, unemployment benefits are taxable income. But, for 2020, the ARPA allows taxpayers with modified adjusted gross income under … Read More
Employers offer 401(k) plans for many reasons, including to attract and retain talent. These plans help an employee accumulate a retirement nest egg on a tax-advantaged basis. If you’re thinking about participating in a plan at work, here are some of the features. Under a 401(k) plan, you have the option of setting aside a … Read More
In a recent audit, the Treasury Inspector General for Tax Administration (TIGTA) evaluated the Taxpayer Advocate Service’s (TAS’s) response to CARES Act issues. “TAS has taken numerous actions to assist taxpayers in response to the enactment of the CARES Act,” the audit said. However, the audit determined that “TAS accepted cases that did not meet … Read More
Have you heard of the “nanny tax?” Even if you don’t employ a nanny, it may apply to you. Hiring a house cleaner, gardener or other household employee (who isn’t an independent contractor) may make you liable for federal income and other taxes. You may also have state tax obligations. If you employ a … Read More
How well is the IRS protecting confidential data that’s stored on their devices? A key element of assuring confidentiality is “sanitization” of laptops, desktops and smartphones, according to the Treasury Inspector General for Tax Administration (TIGTA). In an audit, TIGTA found that the “IRS is not using an approved sanitization product to overwrite sensitive taxpayer … Read More
Haste makes waste. Or, in the case of estate planning, it can lead to other problems and, possibly, financial loss. Notably, if you don’t take enough time to choose the best executor for your estate, this “wrong call” can cost your family. Many responsibilities You may think that there’s not much to the job, but … Read More
As the holidays draw closer, many taxpayers are beginning to think about giving to charities. Naturally, you want the dollars you give to do as much good as possible for the causes you care about. To help you avoid scams and find charities that are legitimate, the IRS has provided a resource called the “Tax … Read More