What’s best for you, taking the standard deduction or claiming itemized deductions? The standard deduction changes yearly and is based on age and filing status. The Tax Cuts and Jobs Act raised the standard deduction so that more people could benefit from its simplicity. Itemizing deductions requires more work, but taxpayers can save taxes if […]

Taxpayers have fundamental rights when dealing with the IRS. Among them is the right to only pay what’s legally owed. You also have the right to: receive a refund if you overpay: be in contact with the IRS if you believe you’re being billed unfairly; and amend a tax return if you discover an error. […]

The IRS clarifies how recent changes affect an insured person’s basis in a life insurance contracts. Generally, the adjusted basis for determining gain or loss from the sale or exchange of property is its adjusted cost, as provided in the U.S. tax code. In Revenue Ruling 2020-5, the IRS clarifies how amendments to the code, […]

IRS field revenue officers (ROs) have begun knocking on the doors of taxpayers with ongoing tax compliance issues. According to the IRS, these home visits (starting in AK, TX and WI) are made if numerous mail contacts have proven unsuccessful. ROs are trained IRS civil enforcement employees who work to resolve issues, such as missing […]

More Puerto Rican earthquake disaster victims now qualify for tax relief. The IRS has announced that victims living in designated federal disaster areas as a result of the Dec. 28, 2019, Puerto Rico earthquakes have additional time to make tax payments and file returns. For affected Puerto Rico municipalities, the extended filing date is April […]

The IRS has posted instructions for how exempt organizations can claim a refund or credit of the unrelated business income tax they paid with respect to qualified transportation fringe benefits. This is the so-called “church parking tax.” In December 2019, legislation retroactively repealed the tax. Before being repealed, a provision required the unrelated business taxation […]

What if you file your federal tax return and then realize you made a mistake? According to the IRS, the answer depends on the mistake. If the error is mathematical, there’s a good chance it will be caught during the processing and corrected by the IRS. But if you chose the wrong filing status, need […]

Generally, amounts withdrawn from an IRA before age 59 ½ are subject to an additional 10% penalty tax. Exceptions exist, including when a distribution is related to the taxpayer’s disability. In one case, a man who was under age 59 ½ took an early distribution from his IRA. He didn’t pay the 10% tax on […]