Does the IRS evaluate employees by how much they collect?

The IRS isn’t allowed to evaluate its enforcement employees by using any record of tax enforcement results (ROTERs) and certain other factors. In a recent audit, the Treasury Inspector General for Tax Administration (TIGTA) examined whether the IRS complied with the requirements. The IRS defines ROTERs as data, statistics, compilations of information, or other numerical […]

What is ordinary and necessary, when it comes to deductions?

Tax law generally allows deductions for ordinary and necessary business expenses incurred in carrying on a trade or business. However, an activity must be conducted with continuity and regularity and with the primary purpose of realizing income or profit. In one new case, the U.S. Tax Court found an individual didn’t conduct an activity in […]

The Social Security wage base for employees and self-employed people is increasing in 2024

The Social Security Administration recently announced that the wage base for computing Social Security tax will increase to $168,600 for 2024 (up from $160,200 for 2023). Wages and self-employment income above this threshold aren’t subject to Social Security tax. Basic details The Federal Insurance Contributions Act (FICA) imposes two taxes on employers, employees and self-employed […]

HSA contribution limits

In addition to participants and their family members, employers can contribute to employee health savings accounts (HSAs) on a tax-advantaged basis. Such contributions are considered employer-provided coverage of medical costs and are, therefore, excludable from the employer’s income. The 2023 limit for employee and employer contributions combined is $3,850 for individual accounts and $7,750 for […]