Red Tape Reduction Act Introduced

Two U.S. Senators seek a bipartisan fix to a widely criticized process. Senators Sherrod Brown (D-OH) and Bill Cassidy (R-LA) introduced the Red Tape Reduction Act to increase the threshold for issuing 1099-K forms for third-party payment transactions. Changes to the process have lowered the threshold that determines when a 1099-K form must be issued […]

$1.5 billion of unclaimed tax refunds are about to expire

$1.5 billion of unclaimed tax refunds are about to expire – WNCT https://bit.ly/3OLFUcO

Employee or Independent Contractor?

Employers that don’t properly classify workers as employees or independent contractors risk legal trouble. A recent U.S. Tax Court decision found an LLC liable for unpaid employment taxes and penalties. The IRS had determined that the medical practice improperly classified workers as independent contractors over a period of several years and wasn’t entitled to Section […]

It’s important to have a household emergency preparedness plan

Hurricanes, wildfires and other disasters are all possible this summer. So it’s important to have a household emergency preparedness plan. The IRS is directing people to the U.S. Dept. of Homeland Security’s site (www.ready.gov), which features recommendations and checklists. For example, store backup copies of bank statements, tax returns and insurance policies in the cloud […]

IRS vows to address racial disparities in audits

IRS Commissioner Daniel Werfel has vowed to address racial disparities in IRS audits. He acknowledged that the IRS’s current algorithmic protocols for audit selection can lead to minorities, especially Black taxpayers claiming the earned income tax credit, being chosen disproportionately for audits. Werfel said that “we are dedicating significant resources to quickly evaluating the extent […]

If you’re hiring independent contractors, make sure they’re properly handled

Many businesses use independent contractors to help keep their costs down — especially in these times of staff shortages and inflationary pressures. If you’re among them, be careful that these workers are properly classified for federal tax purposes. If the IRS reclassifies them as employees, it can be an expensive mistake. The question of whether […]

Burden to prove the deductions is on the taxpayer.

Business owners can generally deduct the ordinary and necessary costs to conduct business. However, the burden to prove the deductions are legitimate is on the taxpayer. In one case, the U.S. Tax Court ruled that a physician who owned a film company wasn’t entitled to deduct expenses associated with the business because he didn’t “engage […]

Seriously delinquent tax debt could put your passport at risk

Seriously delinquent tax debt (SDTD) could put your passport at risk (unless an exception applies). In 2023, SDTD is an unpaid federal tax assessment exceeding $59,000, where a lien has been filed and other remedies have been exhausted. Under such conditions, the U.S. State Dept. can deny, revoke or limit a passport. In one case, […]

4 tax challenges you may encounter if you’re retiring soon

Are you getting ready to retire? If so, you’ll soon experience changes in your lifestyle and income sources that may have numerous tax implications. Here’s a brief rundown of four tax and financial issues you may contend with when you retire: Taking required minimum distributions. These are the minimum amounts you must withdraw from your […]

HSA contribution limits for 2023 & 2024

Health Savings Accounts (HSAs) are tax-advantaged savings accounts funded with pretax dollars. Funds can be withdrawn tax-free to pay for qualified medical expenses. An HSA must be coupled with a high-deductible health plan (HDHP). The IRS annually adjusts HSA and HDHP amounts based on inflation. For 2024, the HSA contribution amount for individuals is $4,150 […]