When does my divorce count for income taxes?

As you likely know, marital status affects many federal tax filing requirements, including your standard deduction, credit eligibility and tax owed. However, you may not know that informally separated couples are considered married by the IRS. Unless you became divorced or legally separated by Dec. 31, 2024, you must file as married filing jointly or […]

Withholding Required

Employers are required to withhold federal tax from supplemental wages paid to employees. These include bonuses, commissions, reimbursements (so long as you don’t have an accountable plan), severance, cash prizes, retroactive raises and taxable fringe benefits. If you pay a supplemental wage of $1 million or less separately from regular wages, you must either 1) […]

IRS announces pilot program on alternative dispute resolution

The IRS announced it has initiated pilot programs to make the alternative dispute resolution (ADR) process faster and easier. This process helps taxpayers who have unresolved issues with the IRS. It’s informal, confidential and voluntary. The pilot programs focus on Fast Track Settlement (FTS) and Post-Appeals Mediation (PAM). FTS is a program that allows the […]

Filing Season Opens

Tax filing season is set to begin on Jan. 27. Businesses must file wage statements and certain information returns with the federal government by Jan. 31. Filing the required forms error-free by the deadline not only helps payers and recipients avoid penalties but also helps the IRS fight fraud by making it easier to verify […]

California disaster relief announced

The IRS has announced tax relief for individuals and businesses in southern California affected by wildfires and straight-line winds, which began on Jan. 7, 2025. These taxpayers now have until Oct. 15, 2025, to file various federal individual and business tax returns and make tax payments. For example, individual returns due on April 15 can […]

Trump to create External Revenue Service

Many changes lay ahead as President-elect Donald Trump gears up to take office on Jan. 20. Among the changes, Trump announced he’ll “create the External Revenue Service (ERS) to collect our tariffs, duties and all revenue that comes from foreign sources.” Currently, the IRS collects certain foreign revenue, and the U.S. Customs and Border Protection […]

Penalty free withdrawal from IRA available for disasters

Recent major disasters, including hurricanes in the east and wildfires in the west, have left many people with serious financial challenges. Those impacted by federally declared disasters may qualify for expanded access to their retirement funds if their principal home is in the disaster zone. They must also have experienced economic loss, such as displacement, […]

Secure Act 2.0 requires auto enrollment for new pension plans

To help encourage more people to save for retirement, the SECURE 2.0 Act requires employers with newly established 401(k) and 403(b) plans to enroll workers automatically, starting in 2025. Recently proposed IRS regulations stipulate that automatic enrollment is mandatory for plans initiated after Dec. 29, 2022. Unless employees opt out, plan sponsors must enroll them […]

SALT deduction currently being debated by lawmakers

Congressional lawmakers are debating the future of the state and local tax (SALT) deduction that was capped at $10,000 by the Tax Cuts and Jobs Act (TCJA). Itemizing taxpayers use the deduction to reduce federal income for their property, state and local taxes. The TCJA’s cap is scheduled to expire after 2025, and many residents […]

IRS issues final regulations on Clean Credits

The IRS has issued final regulations on the Inflation Reduction Act’s Clean Electricity Production Credit (Section 45Y) and the Clean Electricity Investment Credit (Section 48E). The final regs largely adopt the proposed regs for determining greenhouse gas emissions rates resulting from electricity production, petitioning for provisional emissions rates and determining credit eligibility. Included in the […]