Credit cards may provide rewards for the purchase of goods and services. The IRS has long held that the rewards are not taxable; they are viewed as a reduction in the price of the goods and services (Rev. Rul. 76-96). But when a rewards program is abused, it can result in taxable income. A couple [...]
Individuals must report annually on foreign financial accounts if balances exceed a threshold amount. The question raised is whether these balances include cryptocurrencies. The Financial Crimes Enforcement Network may change the rules to specifically include these digital currencies. But instructions to FinCEN Form 114 for 2020, which is due April 15, 2021 (with an automatic [...]
It’s not a penalty despite being called one. That’s what the Tax Court said when a 42-year old worker who took a distribution from the New York State pension plan. She reported the distribution of $9,026 but didn’t pay the 10% penalty, arguing it was not a mere addition to tax, but a penalty requiring [...]
Teachers who are not reimbursed for the cost they incurred after March 12, 2020, for personal protective equipment, disinfectant, and other supplies to prevent the spread of COVID-19 in the classroom can deduct it up to $250 (Rev. Proc. 2021-15). If two teachers are married filing jointly, they can claim a total write-off of up [...]