Federal law requires U.S. citizens and resident aliens to report their worldwide income, including income from foreign trusts and foreign bank and other financial accounts. In most cases, affected taxpayers need to complete and attach Schedule B to their tax return. Part III of Schedule B asks about the existence of foreign accounts, such as…
A U.S. citizen or resident alien’s worldwide income is generally subject to U.S. income tax, regardless of where they live. They’re also subject to the same income tax filing requirements that apply to U.S. citizens or resident aliens living in the United States. U.S. citizens and resident aliens must report unearned income, such as interest,…
You must answer the virtual currency tax question, locate at the top of Form 1040 and Form 1040-SR. You must check the box indicating either “yes” or “no” about your having transaction involving virtual currency. Virtual currency transactions include: The receipt of virtual currency as payment for goods or services provided; The receipt or transfer…
Taxpayers with dependents who don’t qualify for the child tax credit may be able to claim the credit for other dependents. This is a non-refundable credit. It can reduce or, in some cases, eliminate a tax bill but, the IRS cannot refund the taxpayer any portion of the credit that may be left over. The…
The IRS reminds taxpayers receiving Social Security benefits that they may have to pay federal income tax on a portion of those benefits. Social Security benefits include monthly retirement, survivor and disability benefits. They don’t include supplemental security income payments, which aren’t taxable. The portion of benefits that are taxable depends on the taxpayer’s income…
If you work in the service industry and receive tips, the IRS considers your tips as taxable income. Therefore, you must include all tips received in your gross income. This includes: Tips directly from customers. Tips added using credit, debit or gift cards. Tips from a tip-splitting arrangement with other employees. The value of non-cash…
The Educator Expense Deduction allows eligible teachers and administrators to deduct part of the cost of technology, supplies and training from their taxes. They can only claim this deduction for expenses that were not reimbursed by their employer, a grant or other source. Who is an eligible educatorThe taxpayer must be a kindergarten through grade…
If you are paying someone to take care of your children or another member of your household while you work, you may qualify for child and dependent care credit regardless of your income. For tax year 2021, the maximum eligible expense for this credit is $8,000 for one child and $16,000 for two or more….
Scam Alert — Scammers claim to be able to suspend or cancel your social security number if you do not call them back. IGNORE THOSE CALLS.
IRS announced on February 7, 2022, that it will transition away from using a third-party service for facial recognition to help authenticate people creating new online accounts. The transition will occur over the coming weeks in order to prevent larger disruptions to taxpayers during filing season. IRS plans to develop and bring online an additional…
