How confidential is your FTI?

Is your federal tax information (FTI) confidential? Federal tax law permits the IRS to share your FTI with other entities such as state and local tax agencies. Safeguards are in place against the misuse of the data, including required reporting and penalties for violations. Recently, the Treasury Inspector General for Tax Administration (TIGTA) looked at […]

What is ordinary and necessary?

If you’re a business owner, you may be able to deduct “ordinary and necessary” expenses related to keeping working animals. But the operative word here is “working,” for example, dogs that guard against illegal entry or cats that protect inventory from rodents. In general, such expenses as food, veterinary bills, pet insurance premiums and related […]

IRS reports advance in reducing paper filings

The IRS has reported a significant advance in reducing paper filings, part of its 10-year plan to improve service and upgrade technology. Its Document Upload Tool enables taxpayers to submit most documents electronically so long as they can provide their name; an access code or notice or letter number; and a Social Security or taxpayer […]

Living Overseas?

If you’re a U.S. citizen living or working abroad, you still must file a federal individual income tax return. Generally, IRS rules for filing income, estate and gift tax returns and paying estimated tax are the same for those residing abroad as for those in the United States. The United States taxes its citizens on […]

IRS disallows ERTC claims

The IRS recently mailed nearly 28,000 Employee Retention Tax Credit (ERTC) claim disallowance letters to businesses. The National Taxpayer Advocate, Erin Collins, has provided guidance to taxpayers whose ERTC claims were disallowed. Collins said that, “Unfortunately, a number of the notices were not clear or did not include information on the businesses’ appeal rights. Taxpayers […]

Refundable versus Nonrefundable tax credits

Most of us welcome tax credits. But do you know the difference between a nonrefundable tax credit and a refundable tax credit? A nonrefundable tax credit reduces your tax bill dollar for dollar, but not below zero. For example, suppose you have a tax liability of $9,000 and qualify for a nonrefundable tax credit of […]

Happy Labor Day

“I’m a greater believer in luck, and I find the harder I work the more I have of it.” ― Thomas Jefferson Wishing you a happy and safe Labor Day!

Unused 529 plan funds can be rolled over

What do you do with leftovers? They may go to waste if you’re not careful. Suppose your leftovers are in the form of unused funds in a tax-advantaged Sec. 529 college savings plan for one of your kids or grandkids. When withdrawals aren’t used for qualified education expenses, the portion attributable to earnings generally will […]

Hearing held on proposed foreign trust regulations

On Aug. 21, 2024, the IRS and U.S. Treasury Dept. held a public hearing for taxpayers living abroad to provide input on proposed foreign trust regulations. Witnesses expressed the need for more clarity from the IRS on when offshore retirement plans must be reported as trusts (which generally don’t qualify for advantageous tax treatment). Also, […]

Do you have a Business Tax Account?

Business tax account (BTA) is an IRS online portal for eligible business taxpayers. With enhancements made possible by funding from the Inflation Reduction Act, companies can use BTA to pay Federal Tax Deposits and make payments on their full balances due. Another recent change includes greater accessibility to BTA features in Spanish (with more language […]