Blog posts from: 2022
IRS may legitimately ask for taxpayer ID verification with Letter 5071C
In 2015, we first reported a new method the IRS was using to verify the identity of taxpayers as part of its effort to combat the growing problem of identity theft. That technique, a mailed letter known as Letter 5071C,...
Investigatory and acquisition costs when starting or buying a new business may be deductible
Many business owners know their business-related expenses may be deductible, but there are different tax rules for business start-up or acquisition costs. Investigatory costs, start-up costs, organization costs, capitalized costs and expansion costs are treated by the IRS as follows:...
Standard business mileage rates going up July 1
In recognition of recent gasoline price increases, the IRS will raise the standard mileage rate for business use to 62.5 cents, up 4.5 cents from the previous rate established on January 1, 2022. The new rate goes into effect on July...
IRS updates online refund tool
The IRS has enhanced the "Where's My Refund?" online tool by adding a new feature that allows taxpayers to check the status of their current tax year and two previous years' refunds. Previously, the tool only displayed the status of...
IRS offers penalty relief to ERTC claimants
The IRS recently reminded employers of penalty relief related to claims for the Employee Retention Tax Credit (ERTC). The situation may arise when additional income tax is owed because the deduction for qualified wages is reduced by the amount of a...
Cryptocurrency Tax Losses May Be Subject to a $3,000 Cap
The cryptocurrency market has been on a wild ride this year. For some, that's meant dramatic losses in their digital wallets that should be accounted for on tax returns. However, even the IRS appears unsure of how to treat these...
IRS updates status of tax return processing backlog
The IRS continues to struggle with tax return processing in the wake of the COVID-19 pandemic. As of 5/14/22, the IRS had 9.8 million unprocessed individual returns received before 2022 as well as new tax year 2021 returns. The backlog...
Michigan First-Time Home Buyer Savings Program offers favorable state tax treatment to new homebuyers
The Michigan First-Time Home Buyer Savings Program was created in 2022 to assist first-time home buyers (a Michigan resident who has not owned or purchased a single-family residence during a period of 3 years before the date of the purchase...
Inflation-adjusted Health Savings Account (HSA) Figures for 2023
Health Savings Accounts (HSAs) allow eligible individuals to make deductible contributions that can be withdrawn tax-free for reimbursement of eligible medical expenses. For 2023, the limitation on HSA deductions is $3,850 (up from $3,650 for 2022) for an individual with self-only...
I bonds offer a high-return option for some savers
I bonds, an inflation-protected and nearly risk-free investment backed by the U.S. government, will pay 9.62% through October 2022, the U.S. Department of the Treasury announced. With average savings account yields under 1%, and most one-year CDs paying less than...