Before tax reform, an employee could deduct unreimbursed job expenses and other miscellaneous expenses that were more than two percent of adjusted gross income (AGI) as long as they itemized instead of taking the standard deduction. Starting in 2018, however, most taxpayers can no longer claim unreimbursed employee expenses as miscellaneous itemized deductions unless they are a qualified employee or eligible educator.
What To Do if You’re Missing Important Tax Documents
As the April 18th tax deadline quickly approaches, last-minute tax filers should make sure they have all their documents before filing a tax return. You should have received a Form W-2, Wage, and Tax Statement from each of your employers for use in preparing your federal tax return. Employers must furnish this record of 2022 earnings and withheld taxes no later than January 31, 2023. As such, most taxpayers should have received their documents near the end of January, including:
- Forms W-2, Wage and Tax Statement
- Form 1099-MISC, Miscellaneous Income
- Form 1099-INT, Interest Income
- Form 1099-NEC, Nonemployee Compensation
- Form 1099-G, Certain Government Payments; like unemployment compensation or state tax refund
There’s Still Time To Make an IRA Contribution for 2022
If you haven’t contributed funds to an Individual Retirement Account (IRA) for tax year 2022 or put in less than the maximum allowed, you still have time to do so. You can contribute to either a traditional or Roth IRA until the April 18, 2023, due date, not including extensions.
What Is the Saver’s Credit?
The Retirement Savings Contributions Credit, also known as the Saver’s Credit, is a special tax credit for low-and moderate-income workers. In tax year 2020, the most recent year for which complete figures are available, Saver’s Credits totaling more than $1.7 billion were claimed on about 9.4 million individual income tax returns. That’s an average of about $186 per eligible return.
Standard vs. Itemized Deductions
When completing a tax return, taxpayers have two options: take the standard deduction or itemize their deductions. Most taxpayers use the option that gives them the lowest overall tax. Due to all the tax law changes in recent years, including increases to the standard deduction, that means taking the standard deduction – but not always. Let’s look at a few details about these two options.
What Businesses Need To Know About the Excise Tax
Excise tax is an indirect tax on specific goods, services, and activities. Federal excise tax is usually imposed on the sale of things like fuel, airline tickets, heavy trucks and highway tractors, indoor tanning, tires, tobacco, and other goods and services.
How Filing Status Affects Your Tax Return
A taxpayer’s filing status defines the type of tax return form they should use when filing their taxes. Filing status can affect the amount of tax they owe, and it may even determine whether they need to file a tax return at all. As taxpayers get ready for the upcoming filing season, let’s take a closer look at how filing status affects a tax return.
Q&A: No Business Income, No Home-Office Deduction: Wrong
Question
My CPA told me that if I didn’t have any income in 2022, I couldn’t have a home-office deduction. True or false?
Answer
First, this is bad advice, as you will see.
Watch Out for Holiday Gift Card Scams
There’s never an off-season when it comes to scammers and thieves who want to trick people into scamming them out of money, stealing their personal information, or talking them into engaging in questionable behavior with their taxes. While scam attempts typically peak during tax season, taxpayers need to remain vigilant all year long. As such, it is once again time to remind taxpayers that while gift cards make great presents for loved ones, they cannot be used to pay taxes.
Nonetheless, that doesn’t stop scammers from targeting taxpayers by asking them to pay a fake tax bill with holiday gift cards. Scammers may also use a compromised email account to send emails requesting gift card purchases for friends, family, or co-workers.
Tax Credit for Hiring Long-term Unemployed Workers
With many businesses facing a tight job market, employers should know about a valuable tax credit available to them for hiring long-term unemployment recipients and other groups of workers facing significant barriers to employment. If your business is hiring right now, the Work Opportunity Tax Credit (WOTC) may help.