Taxes

Pedants object to referring to Code Section 183 – Activities Not Engaged In For Profit – as the “hobby loss rule”, because, strictly speaking it is not just about hobbies. Besides being used against people who want to take deductions for things that they just feel like doing, Section 183 has been an IRS weapon in

Ah, December. It always feels like this month sneaks up on us. For many, it is the last chance to impact their tax planning. But in the year end rush, there is a lot to consider. The past 18 months have been a wild ride in the capital markets. From the lows of March 2020 to the highs

When the Santa hats, holiday lights, and Christmas movies come on, it’s time for year-end financial and tax planning. This is especially crucial for the millions of employees in the United States who have stock compensation such as stock options and restricted stock units (RSUs), participate in an employee stock purchase plan (ESPP), and/or have

As Congress struggles to pass the Build Back Better bill, some congressional Democrats are exploring new proposals to raise the $10,000 cap on the state and local tax (SALT) deduction. These would increase the deduction limit to $25,000 for all taxpayers or, alternatively, raise the cap to $25,000 only for those making $400,000 or less.

Should you make after-tax Roth or pre-tax contributions to your 401(k)? Roth accounts can be powerful wealth-building tools. But paying tax early doesn’t always make sense, especially for taxpayers with significant income. Here’s when to consider pre-tax vs Roth 401(k) contributions. Quick recap on pre-tax vs Roth 401(k)s Both pre-tax and Roth accounts grow tax-deferred,

If you own any Treasuries, take a grim look at what’s left after inflation and taxes. Inflation has already crossed the 6% mark. Are we going to see 7%? What does that do to savers? My answers are “Yes, soon” and “They get slaughtered.” The inflation rate, as measured by the one-year gain in the

Who wants to think about taxes around the holidays? What if a few simple year-end moves could save you thousands of dollars off your 2021 tax bill? For example, there’s tax loss harvesting, topping up retirement account contributions, and giving to charity. These are moves you can make even though the fate of the Build

In a recent case, the Fifth Circuit analyzed whether the $10,000 maximum non-willful FBAR penalty cap applies for each failure to file an annual FBAR or each failure to report an account. In an opinion that reversed the district court and that departs from a recent 9th Circuit opinion, the Fifth Circuit held that each

Two versions of the Child Tax Credit (CTC) are on the books for the next five years, and a third is included in the House Build Back Better (BBB) plan now awaiting Senate action. The long-term future of the CTC is anyone’s guess, however. Congress should address this uncertainty by making the CTC permanent and predictable and

Today’s Social Security column addresses questions about how stopping working before filing might affect benefit rates, when it can be possible to begin spousal benefits on a spouse’s record and becoming independently entitled to divorced spousal benefits before an ex files. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and

Carl Davis of the Institute on Taxation and Economic Policy discusses the biggest trends in state tax policy this year and those likely next year, including the implications of the Build Back Better Act. This transcript has been edited for length and clarity. Paul Jones: Hi, Carl. Thanks for being with us. Carl Davis: Thanks for having

Prince’s Estate has settled its tax dispute with the IRS over the value of the star’s assets on his death. Prince died without a will in 2016, and that set off a number of legal proceedings. He did not have a spouse or children, but he had half-brothers and half-sisters who stood to inherit. Because

As the year comes to an end, it’s important to start planning your 2021 taxes to reduce your obligations wherever possible. Thinking about your taxes before it’s time to file will allow you to make the most of the deductions and strategies available to you so you can minimize your tax burden. After another unprecedented

BY DEFAULT, the IRS, brokerage firms, and most trade accounting programs use the First-In-First-Out (FIFO) accounting method. If you sell security A, its cost-basis is the first lot purchased — the first one “out” or sold. But there is another option called the Specific Identification (SI) accounting method. Assume you bought several lots of security

Politicians are in the business of selling things: policies, ideas, parties — even themselves, once Election Day rolls around. To help close the deal, they deploy a range of experts, including pollsters, speechwriters, lobbyists, and high-level strategists. Unraveling the process of political salesmanship is no small task; it provides (plausibly) gainful employment to thousands of

Corporate leaders are demanding more and more from their tax and accounting partners. Is your firm on top of the latest Internal Revenue Service guidance on Paycheck Protection Program loan forgiveness? Does it offer Environmental, Social and Governance (ESG) reporting services? Does it use data analytics to help you grow your business? “If you’re going

Actor Charlie Sheen may be most famous for his TV role in Two and a Half Men, but now he’s hoping for a better role from the IRS. He owes the tax man millions, is tired of their collection efforts, and has been trying to negotiate a deal with the agency. This story isn’t fit for a

Wouldn’t it be satisfying to say this to the IRS? “Sorry, IRS, you missed your deadline, it’s too late to audit me!” The IRS usually has three years after you file to audit you. But there are many exceptions that give the IRS six years or longer. No one wants to be audited by the IRS. Even if

Mike Kowis, author of American Tax Trivia: The Ultimate Quiz on U.S. Taxation, challenges the Tax Notes Talk team to a game of tax trivia and discusses his new book.  This transcript has been edited for length and clarity. David D. Stewart: Welcome to the podcast. I’m David Stewart, editor in chief of Tax Notes Today International. This week: trivial

The Build Back Better Act, which has been passed by the House and awaits passage by the Senate, contains a provision that would give individual IRS agents more power and strip taxpayers of important protections that were enacted in 1998. Internal Revenue Code section 6751 currently provides that before the IRS can assess penalties against