Many plaintiffs win or settle a lawsuit and are surprised they have to pay taxes. Some don't realize it until tax time the following year when IRS Forms 1099 arrive in the mail. A little tax planning, especially before you settle, goes a long way. It's even more important now with higher taxes on lawsuit settlements under the recently passed tax reform law.
Certain taxpayers must make estimated tax payments throughout the year. Taxpayers must generally pay at least 90 percent of their taxes throughout the year through withholding, estimated tax payments or a combination of the two. If they don’t, they may owe an estimated tax penalty.
The IRS classifies all cryptocurrencies as property. Buying Bitcoin is not a taxable event. But using Bitcoin to buy something else is considered a sale of Bitcoin and selling property for more than you purchased it for is a taxable event. If you "sell" some Bitcoin at a profit that you purchased within the last year, you will have to report short term capital gains on your tax return and pay ordinary income tax rates.
IRS warns that scammers continue to pose as the IRS, making threatening phone calls and using email phishing schemes to lure taxpayers. The scams may be particularly prevalent ahead of the Oct. 15 tax-filing extension deadline.
Under current law, U.S. taxpayers must report certain offshore assets. Each "US person" with an interest in, signature or other authority over, one or more bank, securities, or other financial accounts in any foreign country must file a Report of Foreign Bank and Financial Accounts (more commonly, FBAR) if the aggregate value of such accounts at any point in a calendar year exceeds $10,000.
The Tax Cuts and Jobs Act’s special 20% individual income tax deduction for pass-through businesses such as partnerships and sole proprietorships was misguided—and probably doomed to fail- from the beginning.
With the year more than halfway over, the Internal Revenue Service urges taxpayers who haven’t yet done a “Paycheck Checkup” to take a few minutes to see if they are having the right amount of tax withholding following major changes in the tax law.
Criminals and scammers often try to take advantage of taxpayers who want to help victims of major disasters. The Internal Revenue Service (IRS) continues to remind taxpayers to be alert for scams that will “undoubtedly pop up when and if a hurricane occurs.”
The Tax Cuts and Jobs Act (TCJA) - the purpose of which was ostensibly to make taxes more simple - has inspired a great deal of creative tax planning. Some planning, like bundling charitable gifts, may result in significant tax savings, while other techniques are doomed to fail.
The Large Business and International (LB&I) of the Internal Revenue Service (IRS) has announced five additional compliance campaigns. The campaigns target AMT credits carryforwards, S corporation distributions, virtual currency, reorganizations, and transition tax.