Individual Tax

Questions on Tax Extensions

Questions on Tax Extensions

More than 14 million taxpayers requested an extension to file their federal income tax return this year. There's just about a week to finish up: October 15 is the last day for most people to file their tax returns for 2018. 

What Congress Might Do On Taxes Before Christmas

What Congress Might Do On Taxes Before Christmas

While the extension of the individual provisions is a big lift and the outlook is very uncertain (with the received wisdom being that this will be put-off until down the road when the provisions are closer to expiring – 2025) – the possibilities of passing retirement provisions and the bill on start-ups has possibilities for this year in lameduck.  The Senate is interested – particularly on retirement.

IRS to introduce new tax transcript to better protect taxpayer data

IRS to introduce new tax transcript to better protect taxpayer data

This new transcript replaces the previous format and will be the default format available via Get Transcript Online, Get Transcript by Mail or the Transcript Delivery System for tax professionals as of September 23. Financial entries will remain visible, which will give taxpayers and third-parties the data they need for tax preparation or income verification.

Emotional Distress Damages Are Taxable, Physical Sickness Damages Are Not, How Come?

Emotional Distress Damages Are Taxable, Physical Sickness Damages Are Not, How Come?

The tax treatment of litigation damages is varied and complex. But the rule for compensatory damages for personal physical injuries is supposed to be easy. They are tax free under Section 104 of the tax code. Yet exactly what is "physical" isn’t so clear. Some of it seems to be semantics. If you make claims for emotional distress, your damages are taxable. If you claim the defendant caused you to become physically sick, those can be tax free. If emotional distress causes you to be physically sick, that is taxable. The order of events and how you describe them matters to the IRS.