Passive Activity Losses

Generally, a loss from real estate activities is a passive activity loss (PAL). A PAL is only deductible from passive income unless the taxpayer qualifies as a “real estate professional.” That means the taxpayer must prove that at least 750 hours of service during the year involved real estate. In one case, an HVAC business […]

New business income payment threshold coming

If you receive business income payments through third-party payors, 2022 might be a game changer for your taxes. If these payments total at least $600 for the year, payors such as Zelle and Venmo are now required to file a Form 1099-K with the IRS. Previously, the threshold was $20,000. Some members of Congress want […]

iRS destroyed 30 million information returns

Recently, the Treasury Inspector General for Tax Administration (TIGTA) audited the IRS because of its processing backlog and destruction of 30 million information return records (which it uses to identify taxpayers who don’t accurately report their income). TIGTA recommends that the IRS “establish processes and procedures to identify and address corporate, employer, and Heavy Highway […]

New regulations coming

You knew it was coming! Digital assets, including cryptocurrencies and nonfungible tokens, are likely to be subject to new regulations soon. The Joint Chiefs of Global Tax Enforcement currently is exploring ways to prevent digital asset-based tax crimes and money laundering. Proposed solutions include intelligence-sharing and coordinated investigation and enforcement actions. Meanwhile, the U.S. Financial […]

IRS update on delays

Many officials and groups have already weighed in on the IRS’s various pandemic-related delays and administrative problems. Now, National Taxpayer Advocate Erin Collins is recommending that the IRS extend the window for taxpayers to claim refunds and waive the time limit for filing refund suits. In normal times, taxpayers can generally request a credit or […]

Russia sanctions

President Biden has widened the circle of U.S. businesses prohibited from working in Russia or for Russian nationals to accounting, corporate formation and consulting services. (The newest sanctions don’t mention legal services.) In addition, sanctions have been extended to include industrial goods exported from Russia, limits on Russian state-controlled TV stations and visa restrictions on […]

National Wildfire Awareness Month

The month of May is National Wildfire Awareness Month. In fact, wildfires are currently raging in New Mexico. The IRS recently issued tips for individuals and businesses to prepare in case they become victims of a natural disaster of any kind. These tips include securing key documents, such as tax returns, birth certificates and insurance […]

Payroll Taxes

The IRS is reminding business owners of the option to electronically file their payroll tax returns and make tax payments. Also known as employment taxes, payroll taxes include federal (and possibly state) income tax withheld from employee wages, as well as the employer and employee portions of Social Security and Medicare taxes. Taxpayers can file […]

Work Opportunity Tax Credits

Even in a tight labor market, some job seekers have trouble finding employment due to such factors as long-term unemployment, veteran status, disability and former incarceration. But the Work Opportunity Tax Credit may help by giving employers who hire eligible individuals a tax credit generally equal to 40% of up to $6,000 in wages paid […]

Crypto-Assets

Some observers have noted that the digital asset reporting model proposed in President Biden’s fiscal 2023 budget is very similar to that put forward by the multinational Organization for Economic Cooperation and Development (OECD). But, as a U.S. Treasury official has stated, the OECD model is narrower in scope and “focuses on transactions involving dispositions […]