Remote work and increased mobility have made living in one state while working in another more common than ever. While this flexibility has many perks, it can also trigger unexpected tax consequences.
Enhanced SALT Tax Break Will Help Many Homeowners
The One Big Beautiful Bill Act (OBBBA), enacted on July 4, will allow more taxpayers to fully deduct their state and local tax (SALT) expenses (including property tax). Here are the details.
IRS Form 8300: Report Cash Payments Over $10,000
Does your business frequently receive large amounts of cash or cash equivalents? If you accept more than $10,000 in a single or related transactions, the IRS generally requires you to report these payments by filing Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business. This requirement helps the government trace funds related to criminal and tax evasion activities.
Should You Be Making Estimated Payments?
If your federal tax withholding isn’t enough to cover your total tax liability, you may need to make estimated tax payments. This typically applies if you have income from sources such as interest, dividends, capital gains, or self-employment. The following rules explain how to make these payments without incurring an underpayment penalty.
You May Owe the “Nanny Tax” Even Without a Nanny
Don’t let the name “nanny tax” fool you. It’s a tax that applies to the wages of a variety of types of household help you hire, such as a nanny, gardener, or housekeeper. Hiring extra help can ease the burden of home-related tasks, especially in the summer when the kids are home or the garden needs attention. Unless the worker is an independent contractor, you may be liable for federal payroll tax and other taxes (including state tax obligations).
Options for Paying Your Tax Bill
If you owe federal tax, you can typically use credit and debit cards to pay directly or through certain third-party apps. However, the number of cards you can use when submitting individual tax forms is generally limited to two per year or two per month (for details: Frequency limit table by type of tax payment | Internal Revenue Service ).
How To Get an “Early” Refund, Adjust Your Withholding
If you received a large refund this year, you may want to adjust your withholding. Each year, millions of taxpayers claim an income tax refund. To be sure, receiving a payment from the IRS for a few thousand dollars can be a pleasant influx of cash. But it means you were essentially giving the government an interest-free loan for close to a year, which isn’t the best use of your money.
3 Strategies for Estimated Tax Payments
Many individuals today are self-employed or generate income from interest, rent, dividends, and other sources. If you’re in this situation, you could be risking penalties if you don’t pay enough taxes during the year through estimated tax payments and withholding. (The due date for the final estimated payment for 2023 is January 16, 2024.)
What are Estimated Tax Payments?
Estimated tax is the method used to pay tax on income not subject to withholding, such as income from self-employment, interest, dividends, alimony, and rent and gains from the sale of assets, prizes, and awards. You also may have to pay an estimated tax if the income tax being withheld from your salary, pension, or other income is insufficient. Here’s what you should know about estimated tax payments:
Estimated Tax Payments: The Facts
Estimated tax is the method used to pay tax on income that is not subject to withholding, including income from self-employment, interest, dividends, alimony, rent, and gains from the sale of assets, prizes, and awards. You also may have to pay estimated tax if the amount of income tax being withheld from your salary, pension, or other income is not enough.