Individual Strategies

Should the rich pay more taxes? Are they dodging their equitable responsibility? Or do wealth taxes discourage people from the American dream of trying to get rich? Taxes are what the other guy in America should pay and the rich, with headline exemptions like Warren Buffet and Bill Gates , usually join the chorus of taxpayers who say they don’t want to pay more taxes no matter how much they’re worth. Call the concept one of a fair share or just simply unfair, a national wealth tax continues to ignite debate and legislation. What’s the latest?

Common sense says that filing taxes as early as possible in the year gets an onerous chore off your plate and, chances are, gets your clients’ tax refund into their pockets quicker. Common sense can also be wrong if you need, as most taxpayers do, various tax-reporting forms that can arrive in early spring, if not later. There are also many other reasons you may, or may not want, to file your client’s taxes as early as possible.

Time flies when you’re dealing with taxes. For instance, eight years must have seemed like an epoch when Washington passed the Tax Cuts and Jobs Act of 2017 (TCJA), the biggest federal tax reform in decades and one that altered tax brackets, deductions, and estate planning, to name just a few. Best of all, lawmakers probably thought back then, we won’t have to worry about some of these provisions changing until all the way off in 2026! Except suddenly, we now have less than 26 months to get ready for the end of nearly two dozen TCJA provisions that will happen without action from Congress. That’s barely enough time for some of the planning before what could be one of the biggest groundswell tax years of recent memory.

Considering how soon Halloween comes after October 15, the extended due date for individual returns, having a tax horror story seems really appropriate. The horror story came out on October 24, with the Eleventh Circuit decision in the case of Lee v U.S. Dr. Wayne Lee seemed to have done everything right to be in compliance. His estimates overpaid his taxes every year, and he would let the refund ride into the next year. He hired a CPA to prepare his returns and dutifully signed and sent the CPA Form 8879 IRS e-file Signature Authorization. He did this for his 2014, 2015, 2016, and 2017 returns. Then disaster struck.

Thanks to the Inflation Reduction Act of 2022, the federal government is giving out tens of billions of dollars in tax credits to incentivize taxpayers to purchase electric vehicles. As with any government program, claiming the benefits can be complicated. Since Congress used tax credits to deliver the program, and the personal tax credits are income-limited, tax planning can help a taxpayer who would otherwise not qualify for these benefits. This article will briefly overview the two personal electric vehicle tax credits, followed by several tax planning strategies to unlock these credits for taxpayers who may not otherwise qualify.

Joseph Michael Balint had some really hard luck. He was in prison in Florida from December 17, 2013, through January 6, 2015. Fearful of forfeiting assets, he transferred everything to his wife, Jacqueline, and gave her power of attorney early in his prison term. What he had not planned on was her emptying the retirement accounts and leaving him with the tax tab. His luck turned a bit in Tax Court, as we shall see.

The federal government is there to reduce taxpayer confusion. That, at least, was one point of the reasoning for the recent IRS decision to again postpone a $600 tax-reporting threshold for people paid via third-party settlement networks. Those who made that amount on the likes of eBay and other online sales sites and who received payment via such platforms as PayPal and Venmo will not have that money reported to the IRS for another year. Does this really let taxpayers off the hook? What strategies should you adapt for when the IRS does mandate this reporting?

This year is far from over for tax planning – for some moves, you have even longer – but now’s the time to start looking and acting on your tax tactics given your circumstances and the 2023 you’ve had so far. What you do or don’t do now could save or cost you next April.