Not all legal damages awards are taxable

The Child Tax Credit

If Democratic members on the House Ways and Means Committee had their way, enhancements to the Child Tax Credit (CTC) in the proposed Tax Relief for American Families and Workers Act would have been more expansive. In its current form, the bill increases the maximum “refundable” CTC (the amount you can get as a refund […]

Collection Due Process hearings

Taxpayers that owe more taxes than they can currently pay may request a Collection Due Process (CDP) hearing if they follow the rules. Possible assistance may include an installment plan, penalty relief and innocent spouse relief. One taxpayer was granted a CDP hearing on his 2022 tax return but was denied an installment plan and […]

House Ways and Means pushes bill with tax relief goals

The U.S. House Ways and Means Committee is continuing to move forward a wide-ranging tax package. The proposed Tax Relief for American Families and Workers Act extends some expired tax breaks for businesses and contains enhancements to the Child Tax Credit. It also has a provision that would reduce paperwork for some businesses. Currently, businesses […]

The IRS unveils ERTC relief program for employers

Since July 2023, the IRS has taken a series of actions in response to what it has termed a “flood of ineligible claims” for the Employee Retention Tax Credit (ERTC). Most recently, it launched a Voluntary Disclosure Program (VDP). The program presents a valuable, but temporary, opportunity for eligible employers. Flood of invalid ERTC claims The […]

Taxpayer Bill of Rights

As the 2024 tax season approaches, taxpayers should know they’re protected by a Taxpayer Bill of Rights. It provides the right to: 1) be informed, 2) quality service, 3) pay no more than the correct amount of tax, 4) challenge the IRS’s position and be heard, 5) appeal an IRS decision in an independent forum, […]

IRAs: Build a tax-favored retirement nest egg

Although traditional IRAs and Roth IRAs have been around for decades, the rules involved have changed many times. The Secure 2.0 law, which was enacted at the end of 2022, brought even more changes that made IRAs more advantageous for many taxpayers. What hasn’t changed is that they can help you save for retirement on […]

IRS reports on collections

The IRS reports that it has collected $482 million in its ongoing efforts to recoup taxes owed by 1,600 millionaires. This is part of the agency’s initiative to expand investigation of tax abuse by complex partnerships, large corporations and high-income taxpayers. The IRS is working “to reverse the historic low audit rates and limited focus […]

Should your business offer the new emergency savings accounts to employees?

As part of the SECURE 2.0 law, there’s a new benefit option for employees facing emergencies. It’s called a pension-linked emergency savings account (PLESA) and the provision authorizing it became effective for plan years beginning January 1, 2024. The IRS recently released guidance about the accounts (in Notice 2024-22) and the U.S. Department of Labor […]

When do I report the receipt of a Digital Asset?

The IRS is informing businesses that they don’t have to report the receipt of digital assets the same way they report the receipt of cash until the IRS issues final regulations. The Infrastructure Investment and Jobs Act (IIJA) revised the rules requiring taxpayers engaged in a trade or business to report receiving cash of more […]