Posts

Showing posts from January, 2020

Understanding your Form W-2

Image
For most individual taxpayers, the Form W-2 is the most important tax document for tax filing season. The W-2, or the Wage and Tax Statement, reports your taxable income amount from your employer. The W-2 Form also reports the taxes withheld by your employer as well as social security and medicare payment amounts for the year. Related Posts -  How to rent your house tax-free? -  How to determine your tax filing status? -  How to Pay Taxes as an Independent Contractor? -  How to file a tax return for your kids when they make money in 2019? The W-2 is an obligation of the employer. Your employer must prepare your W-2 Form. Additionally, they provide copies of the W-2 to you and the IRS. The employer must deliver the W-2s by January 31 for the previous tax year. So, the employer must deliver its W-2s by January 31, 2020 for the 2019 tax year. If you do not receive your W-2 by mid-February, you should contact your employer. Note that many people elect to receive the W-2 electronica

Tax guidance on virtual currency transactions

Image
In October 2019, the IRS released additional guidance on the tax treatment of virtual currency transactions. The IRS released the guidance in the form of a Revenue Ruling (Rev. Rul. 2019-24). The revenue ruling provides further guidance relating specifically to accounting for, valuing, and reporting virtual currency. Additionally, it is important to note that the following guidance relates only to taxpayers holding cryptocurrency as a capital asset. Below, I will detail several tax rules surrounding virtual currency transactions, including recognizing a virtual currency transaction, valuing a virtual currency transaction, and reporting a virtual currency transaction. If you buy, hold, and/or sell cryptocurrency, it is essential to have a strong understanding about virtual currency tax law to avoid paying tax penalties. Related Posts: -  Rental of Residence: How to rent your house tax-free? -  Gambling Winnings & Losses: How to report gambling income and losses -  How to file

The Latest in Tax News: December 2019 Edition

Image
Textbook Tax presents its monthly tax news update. A quick read discussing various tax news, tax stories, and tax events trending in the world of tax during the month. The following tax topics cover the month of December 2019. The tax topics presented represent my favorites in tax news and tax-related events. Please comment any tax news stories you found interesting for the month of December. Additionally, please email me or connect with me on social media for the monthly tax news update sent straight to you! Tax News for December 2019 Tax Topic: US Congressional negotiators reach year-end tax deal Tax Summary: US House and Senate reached a tax deal on December 17, 2019. The tax deal will be incorporated into the 2020 spending bill. The tax deal includes: "extenders," ACA tax repeals, disaster relief, and more. The tax deal extends expiring provisions, including biodiesel credits, short-line railroad credits, New Markets Credit,Work Opportunities Credit, and more.

Gambling Winnings & Losses: Professional gambler versus amateur gambler?

Image
The IRS categorizes gamblers into two types: amateur gambler and professional gamblers. The category distinction is important because the two types of gamblers face different rules and reporting methods. For specific reporting rules for both amateur gamblers and professional gamblers, please follow the link below. Link:  How to report gambling winnings and losses? Because of the different tax rules and reporting methods, the IRS aggressively challenges the gambling status classification of taxpayers. Further, the burden is on the taxpayer to prove his or her gambling status. This is a difficult situation because gambling classification is based on facts and circumstances, which may be argued either way. Below, I will detail the general rules to help you determine if you meet the requirements of a professional gambler or an amateur gambler. Professional Gambler What constitutes a professional gambler? Groetzinger , 480 U.S. 23 (1987), a Supreme Court case, established the p