Which IRS notices are temporarily suspended?

A bipartisan group of lawmakers recently sent a letter to IRS Commissioner Charles Rettig requesting information on the suspension of certain tax notices that the IRS normally issues when a taxpayer owes tax and the IRS has no record of the taxpayer filing a tax return. The lawmakers expressed confusion about the extent to which […]

Charitable Donations

Advocates of charities are urging Congress to revive a charitable giving deduction for taxpayers who don’t itemize on their tax returns. The above-the-line tax deduction was created by the CARES Act in response to the pandemic. It was available in 2020 and extended through 2021 but has expired for 2022. For 2021, the deduction was […]

Employ a household worker?

Did you employ a household worker in 2021? This could include a housekeeper, nanny, gardener, cook, health care worker, tutor or someone else. If so, you may owe what’s commonly called the “nanny tax.” If you paid him or her $2,300 or more in 2021 you must file Schedule H (Household Employment Taxes) with your […]

IRS reports on backlog of unprocessed returns

A large number of errors made by taxpayers is hurting the IRS with its inventory of unprocessed tax returns. The backlog is mostly paper-filed returns and is dominated by errors relating to Economic Impact Payments (EIPs). On more than 10 million returns filed in 2021, taxpayers “failed to properly reconcile” the two 2020 EIPs with […]

IRS updates vehicle tables

If your business buys or leases passenger vehicles in 2022, review the IRS’s recently updated depreciation deduction and income inclusion tables. In general, taxpayers may claim an additional first-year depreciation deduction equal to 100% if they place qualified purchased vehicles into service before 2023 (other rules and limitations apply). Table 1 lists depreciation limits for […]

Proposed legislation on the 1099-K

Under a new law, gig workers (such as rideshare drivers) and online sellers of goods must file Form 1099-K with the IRS if they earn at least $600 annually. A group of Democrats in Congress thinks that threshold is too low and may subject these taxpayers to “burdensome or confusing reporting requirements, which could result […]

Expansion of multilingual products

The IRS is taking additional steps to ensure that its forms and other documents are accessible to all taxpayers. The latest expansion of its multilingual products, Braille, text, audio and large print products are now available in Spanish. Specifically, the IRS is converting Form 1040 and its main schedules in Spanish Braille and large print. […]

2022 foreign housing exclusion issued

The IRS issues the 2022 foreign housing cost exclusions. A U.S. citizen or U.S. resident alien living abroad can elect to exclude the foreign earned income and housing cost amount from gross income (subject to limitations). The housing cost exclusion is calculated based on the number of days physically present in the foreign location. In […]

Budget Deficit

The federal budget deficit hits slower growth. The Congressional Budget Office (CBO) reports that the deficit for the first five months of fiscal year 2022 was $475 billion. That’s lower than for the same period in the two previous fiscal years. Revenues rose by 26% and outlays fell 8%. Individual income and payroll taxes combined […]

Ukraine in the News

Congress seeks to ramp up pressure on Russia for attacks on Ukraine. U.S. Senate Finance Committee Chair Ron Wyden (D-OR) wants to abolish tax breaks for wealthy Russians supporting Russian President Vladimir Putin. This would be on top of economic sanctions already imposed. Provisions being discussed include denying foreign tax credits and deductions for taxes […]