Millions of taxpayers filed for unemployment compensation in 2020 after losing their jobs due to the COVID-19 pandemic. In some cases, scammers took advantage of the crisis and filed fraudulent unemployment claims, using the stolen personal information of those who hadn’t yet filed claims. Thus, payments went to the identity thieves. The IRS urges victims … Read More
Is your new worker an employee or an independent contractor for federal income and employment tax purposes? Correct classification can be tricky, but the potential penalties for misclassification are high. If a worker is an employee, you must withhold federal income and payroll taxes, pay the employer’s share of FICA taxes on the wages plus … Read More
If your business sponsors a 401(k) plan, you might someday consider adding designated Roth contributions. Here are some factors to explore when deciding whether such a feature would make sense for your company and its employees. Key differences Roth contributions differ from other elective deferrals in two key tax respects. First, they’re irrevocably designated to … Read More
The IRS has added two Kia models to the list of vehicles eligible for an electric vehicle tax credit. The tax code provides a federal credit of up to $7,500 to purchasers of qualifying plug-in electric drive motor vehicles including passenger vehicles and light trucks. The credit phases out over 6 quarters beginning when a … Read More
Merger and acquisition activity in many industries slowed during 2020 due to COVID-19. But analysts expect it to improve in 2021 as the country comes out of the pandemic. If you are considering buying or selling another business, it’s important to understand the tax implications. Two ways to arrange a deal Under current tax law, … Read More
In recent testimony before the U.S. House Appropriations Committee Financial Services Subcommittee, IRS Commissioner Charles Rettig said that the agency isn’t planning to extend the April 15 filing deadline this year despite requests from several lawmakers to extend it to July 15. However, Rettig noted that a final decision on the matter hasn’t been reached. … Read More
If you’re like many Americans, letters from your favorite charities may be appearing in your mailbox acknowledging your 2020 donations. But what happens if you haven’t received such a letter — can you still claim a deduction for the gift on your 2020 income tax return? It depends. What is required To support a charitable … Read More
Erroneous IRS notices were sent to 260,000 taxpayers in early Feb. 2021. CP59 Notices informed taxpayers that they hadn’t filed 2019 federal returns. In a statement on its website, the IRS acknowledged that, due to COVID-19, the agency was forced to scale back staff including many in its mail processing operations, to focus efforts on … Read More
People sometimes keep assets hidden without letting their families know about their location or even that they exist. Similarly, they may have life insurance policies no one knows about. Using a fictional example, here’s why full disclosure of your assets to your family is recommended. George was a successful entrepreneur. He accumulated significant wealth during … Read More
The Treasury Inspector General for Tax Administration (TIGTA) finds that the IRS’s Income Verification Express Service (IVES) needs security enhancements. Once accepted in the IVES program, participants can submit requests on behalf of their clients to obtain tax transcripts. The IRS must authenticate the validity of the tax transcript request forms. In an audit, TIGTA … Read More