The IRS has released guidance on deferring employee Social Security tax withholding under President Trump’s executive action. The guidance in Notice 2020-65 is brief and many employers still have questions and challenges about how, and whether, to implement deferral by the start date. The optional deferral applies to wages paid from Sept. 1 through Dec. … Read More
If you’re getting close to retirement, you may wonder: Are my Social Security benefits going to be taxed? And if so, how much will you have to pay? It depends on your other income. If you’re taxed, between 50% and 85% of your benefits could be taxed. (This doesn’t mean you pay 85% of your … Read More
IRS employees often don’t know that they can disclose collection activity to divorced or separated taxpayers, according to a report from the Treasury Inspector General for Tax Administration (TIGTA). The report looked at cases when information was requested by delinquent taxpayers who are no longer married. “Mirrored accounts” made up 42 of the 74 cases … Read More
While you probably don’t have any problems paying your tax bills, you may wonder: What happens in the event you (or someone you know) can’t pay taxes on time? Here’s a look at the options. Most importantly, don’t let the inability to pay your tax liability in full keep you from filing a tax return … Read More
An individual who provides information about unpaid federal tax to the IRS Whistleblower Office could qualify for a cash award. An eligible claim must meet certain requirements and “provide specific or credible information regarding tax underpayments or violations of internal revenue laws.” The tax code authorizes the IRS Whistleblower Office (WBO) to pay discretionary whistleblower … Read More
The IRS has issued a draft of the 2020 Form 1040 that allows taxpayers to claim the new charitable contribution deduction. Under the CARES Act, taxpayers who don’t itemize their deductions can take a $300 “above-the-line” deduction for 2020 charitable contributions. There’s also a new line on the form to claim a “recovery rebate credit.” … Read More
The IRS is sending tax refund interest payments. The IRS announced the payments will be made to about 13.9 million individual taxpayers. The interest payments, averaging about $18, will be made to individuals who filed 2019 returns by this year’s July 15 deadline and either received a refund in the past three months or will … Read More
In the COVID-19 era, many parents are hiring nannies and babysitters because their daycare centers and summer camps have closed. This may result in federal “nanny tax” obligations. Keep in mind that the nanny tax may apply to all household workers, including housekeepers, babysitters, gardeners or others who aren’t independent contractors. If you employ someone … Read More
Many employers outsource their payroll tax duties to third parties, such as payroll service providers. According to the IRS, third parties occasionally fail to remit the payroll taxes entrusted to them and may even then close their doors abruptly. The tax agency urges employers to choose their payroll service provider carefully, because using a reputable … Read More
You may use a qualified disclaimer to refuse a bequest from a loved one. Doing so will cause an asset to bypass your estate and go to the next beneficiary in line. What are the reasons you’d take this action? Here are five reasons: 1. Gift and estate tax savings. This is often cited as … Read More