Freelance (or gig) workers need to keep these tax rules in mind
The IRS wants freelance or "gig" workers to understand that their work is taxable for payments received in 2022 to totals exceeding $600, regardless of the total number of transactions or whether the work is full-time or part-time. While an employer...
A Kovel agreement can privilege communication from your CPA
Attorney-client privilege is a legal concept that protects confidential communications between attorneys and clients that are made for the purpose of obtaining or giving legal advice. The privilege, which is owned by the client, is intended to encourage full and candid...
Form 706 extension for portability changes from two to five years from date of death
The IRS has provided a simplified method for certain taxpayers to obtain an extension of time to file a return on or before the fifth anniversary of the decedent's death to make a portability election. For purposes of federal estate...
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...