Tax News

The Tax Cuts and Jobs Act of 2017 created a new type of investment offering special tax breaks. Various locations around the country have been designated as Opportunity Zones (OZs), allowing for these...

Distributions from an IRA prior to age 59 ½ are subject to a 10% early distribution penalty. However, the penalty is waived if an exception to it applies. One exception is for disability. But, as a r...

Acting National Taxpayer Advocate Bridge Roberts released the 2019 annual report to Congress (https://taxpayeradvocate.irs.gov/2019AnnualReport). The National Taxpayer Advocate’s 2019 annual report ...

Since 2002, the IRS has partnered with private tax preparation software providers to offer eligible taxpayers a free tax preparation and e-filing option. Called Free File, this option can be used to p...

If you use a vehicle for certain driving purposes, you can deduct your costs based on your actual expenses or rely on an IRS-set mileage rate. The IRS has announced the standard mileage rates that can...

Executive Order 13765, issued in 2017, is aimed at minimizing the economic burden of the Affordable Care Act. However, the IRS has indicated that this doesn’t give the Service the authority to chang...

The interest rates on overpayments and underpayments are unchanged from the fourth quarter of 2019 (Rev Rul. 2019-28). The rates are: Noncorporate overpayments and underpayments: 5% Corporate ov...

The IRS has provided guidance on what disclosure is treated as “adequate” to avoid a 20% penalty for a substantial understatement of tax (Rev. Proc. 2019-42, updating Rev. Proc. 2019-9). Here’s ...

A domestic spending package, called the Further Consolidated Appropriations Act, 2020 (H.R. 1865) which was signed into law on December 20, 2019, makes $426 billion in tax cuts. Here is a brief overvi...

Currently, the estate tax exemption is large enough ($11.4 million for decedents dying in 2019; $11.5 million for those dying in 2020) to protect most estates from having to pay any federal estate tax...

The basic Part B premium amount for 2020 is $144.60 per month. The Part D premium for drug coverage in 2020 ranges from $13 to $83 per month (depending on the drug plan selected). However, high-income...

A home office deduction can be claimed only if space is used regularly and exclusively for business. But can a taxpayer who has two businesses claim a home office deduction for the same space? In a...

Homeowners who meet ownership and use tests can exclude gain on the sale of a principal residence up to $250,000 ($500,000 on a joint return). Taxpayers who hold property for investment can defer gain...

Each year, the IRS can adjust various amounts used to figure contributions, benefits, deductions, and credits related to qualified retirement plans and IRAs. The IRS has now done so for 2020 amounts (...

The IRS has announced cost of living adjustments for more than 60 tax items for 2020 Act (Rev. Proc. 2019-44). All of the tax brackets have been affected, as well as the taxable income breakpoints for...

More than 69 million Social Security beneficiaries will receive a cost-of-living adjustment (COLA) of 1.6% starting with the December 2019 benefits, which are payable in January 2020. This COLA adjust...

ABLE accounts are special savings accounts for certain disabled individuals that can be used without causing the loss of government benefits related to the disability. In 2018, the IRS indicated it wo...

In 2014, the IRS said that virtual currency, such as Bitcoin, is property and not currency (Notice 2014-21). Thus, individuals receiving payments in cryptocurrency held for investment means reporting ...

For owners of pass-through entities to claim the 20% qualified business income (QBI) deduction, they must be in a trade or business. When it comes to real estate activities, it’s sometimes difficult...

A wife was ordered by a divorce decree to transfer $10,000 from her retirement account  to her former husband. She instructed her broker to transfer this amount to an IRA set up for the former husban...