Gregory Holcomb

The Treasury Dept. has cancelled outstanding Economic Impact Payment (stimulus) checks issued to recipients who may not be eligible, including those who may be deceased.

IRS Cancels Stimulus Checks Issued to Decedents According to the recently updated IRS FAQ page, the Treasury Dept. has cancelled outstanding Economic Impact Payment checks issued to recipients who may not be eligible, including those who may be deceased. Some sources indicate the Bureau of Fiscal Services, the agency issuing the stimulus checks,....

Most taxpayers don't intentionally incur tax penalties, but many who are penalized are simply not aware of the penalties or the possible impact on their wallets. As tax season approaches, keep in mind that there are penalties for underpaying estimated tax and withholding as well as paying late, filing late and others. Some can be avoided by conforming to deadlines; others may be appealed due to reasonable cause.

Watch Out for Tax Penalties Most taxpayers don’t intentionally incur tax penalties, but many who are penalized are simply not aware of the penalties or the possible impact on their wallets. As tax season approaches, let’s look at some of the more commonly encountered penalties and how they may be avoided.

Wednesday Wisdom

Generally, taxpayers should hold on to their tax records and supporting documents for at least 3 years after the corresponding return's due date. The statute of limitations can be longer if there is fraud or if no return was filed. Some state statues last 1 or 2 years longer as well. Purchase records for stock, property and other assets must be kept until the statute expires for the year of sale.

Thinking of Dumping Old Tax Records? Tired of having all those old tax records taking up drawer or closet space and collecting dust. Want to dump as much as you can? People often ask how long records must be kept and the amount of time IRS has to audit a return after it is filed.

The IRS and other government agencies have noted a rise in scams and other fraudulent activities surrounding the COVID-19 crisis. Things are hard enough these days - don't let yourself become a victim of fraud, too. Here's what to look out for.

How to Protect Yourself Against Coronavirus-Related Fraud There are bad actors seeking to take advantage of taxpayers and business owners. Here are some common types of fraudulent activities occurring during the COVID-19 crisis.

In the midst of the COVID-19 pandemic, more and more individuals are performing volunteer charity work. Although no tax deduction is allowed for the value of services performed for a charity, some deductions are permitted for out-of-pocket costs incurred while performing the services. The normal deduction limits and substantiation rules also apply.

Charity Volunteer Tax Breaks If you volunteered your time for a charity or governmental entity during the COVID-19 pandemic, you probably qualify for some tax breaks. These rules actually apply to all charity volunteers not just COVID-19 volunteers. Although no tax deduction is allowed for the value of services performed for a....

If you are one of those taxpayers that doesn't feel the need to keep home improvement records, because you assume any potential gain will never exceed the amount of the exclusion for home sale gains ($250,000 or $500,000 if both filer and spouse qualify), you may want to consider the consequences if you have a gain and a portion of it cannot be excluded.

You Should Be Keeping Home Improvement Records Individuals who meet the 2-out-of-5-year use and ownership tests can exclude up to $250,000 ($500,000 if both filer and spouse qualify) of gain from the sale of their home, and generally don’t need to keep a record of improvements made to the home. However, in many instances the gain from the home...

Assuming a child is suitable for the job, a reasonable salary paid to a dependent child who is under the age of 19 or a full-time student under the age of 24 reduces the self-employment income and tax of the parents (business owners) by shifting income to the child. In 2020 the child can earn up to $12,400 tax-free, and the next $9,875 is only taxable at 10%. Plus, children under 18 are not subject to payroll taxes.

Big Tax Breaks for Hiring Your Children in the Family Business With jobs at a premium during the COVID-19 pandemic, you might consider hiring your children to help out in your business. Financially, it makes more sense to keep the family employed rather than hiring strangers, provided, of course, that the family member is suitable for the job. Note, however, th...