TaxCure Blog

When you filed your income tax returns for the past tax year, your tax preparer or the software program you were using probably gave an estimate of how much money you would receive back from the government.  You were likely very excited to receive your tax refund. You may have planned precisely how you were going to spend it.

Private collection agencies are now being assigned to collect selected delinquent accounts for the IRS. These agencies have placed some taxpayers in such stressful positions that it is hard for them to meet their living expenses. If the IRS assigns your account to a collection agency, you should receive notice CP40 or CP140. Do not speak to anyone from the collection agency until you have verified their information using the details on these letters, and also make sure that you verify that these notices are really from the IRS. 

Losing your partner can be emotionally debilitating, and on top of dealing with that aspect of the loss, you also have to handle numerous financial issues. Wondering how becoming a widow affects your income tax situation? Here’s a look at some of the essentials.

The sweeping changes of the Tax Cuts and Jobs Act (TCJA) that went into effect at the beginning of January 2018 included a 20% pass-through deduction to non-corporate taxpayers with “qualified business income.” What is known as the “pass-through rules,” taxpayers can find them in 26 U.S. Code § 199A – Qualified Business Income (QBI). The purpose of § 199A was to give individuals with qualified business interests a break similar to the 21% income tax bracket enjoyed by C corporations, which are taxed as separate entities.  26 U.S. Code § 199A will expire in 2026 unless extended.

The Bank Secrecy Act (31 USC 5324) was passed in the 1970s to address the problem of money laundering and other crimes that require large transfers of money. Under the auspices of this act, financial institutions must report financial transactions over $10,000.  Criminals found ways to sidestep this monitoring, such as by making several deposits under the $10,000 limit, otherwise known as structuring transactions. According to the IRS, “A structured transaction is a series of related transactions that could have been conducted as one transaction, but the financial institution and/or the transactor intentionally broke it into several transactions for the purpose of circumventing the reporting requirements of the Bank Secrecy Act (BSA).”