Tax Tips

Individuals, companies, corporations, partnerships, associations, trusts, and estates must report cash transactions of more than $10,000. These cash payments can include jewelry sales, a gift from a family member, an overseas purchase, or any other cash transaction. You also need to report cash payments received in one lump sum, in two or more related payments within 24 hours, or as part of a single transaction or two or more transactions in the previous year.

All you need to do is file Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business. The form requires information about the giver and receiver of the cash, a description of the transaction, and information about any other parties involved.

*This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov⁶

Footnotes and Sources

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There are some essential tips to remember if you work as a gig worker, someone who takes temporary work through one or more employers:

• All income from these sources is taxable, regardless of whether you receive information returns; this includes both full-time and part-time work and if you’re paid in cash.
• As a gig worker, you must be correctly classified as an employee or an independent contractor; this can depend on where you live, even for the same services.

Lastly, it’s important to remember to pay the correct amount of taxes on this income throughout the years to avoid owing when you file. Because gig employees don’t have an employer withholding taxes from their paychecks, they can either submit a new W-4 and have their employer withhold more from their paycheck (if they have another job as an employee) or make quarterly estimated tax payments throughout the year.

*This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov⁹

Footnotes and Sources

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Let’s outline who the Internal Revenue Service (IRS) defines as a qualifying person under this care credit:

• A taxpayer’s dependent who is under the age of 13 when the care is provided.
• A taxpayer’s spouse who is physically or mentally unable to care for themselves and lived with the taxpayer for more than half the year.

In addition to spouses and dependents, the credit may also cover someone who is mentally or physically unable to care for themselves and lived with the taxpayer for six months; this is the case if that person was the taxpayer’s dependent or if they would have been the taxpayer’s dependent except for one of the following:

• The qualifying person received a gross income of $4,700 or more.
• The qualifying person filed a joint return.

If filing jointly, the taxpayer or spouse could be claimed as a dependent on someone else’s return.

*This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov⁹

Footnotes and Sources

9. ^{IRS.gov, May 8. 2024}

 

The first thing to consider is alimony payments. Alimony payments paid under a divorce or separation instrument are deductible by the payer, and the recipient must include it in income. Alimony is not subject to tax withholding, so increasing the tax paid during the year may be necessary to avoid a penalty.

The next thing to consider is IRA contributions. A divorce agreement by the end of the tax year means taxpayers can’t deduct contributions made to a former spouse’s traditional IRA. They can only deduct contributions made to their own traditional IRA.

Once you reach age 73, you must begin taking RMDs from a traditional IRA in most circumstances. Withdrawals from traditional IRAs are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty.

*This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov¹

Footnotes and Sources

1. ^{IRS.gov, May 8. 2024}

There’s no better time to check your withholding status and make sure your paycheck accurately reflects the taxes you should be paying. These paycheck checkups are a great practice when something happens in your life that may change your tax status, such as getting married or getting divorced, having a baby, getting a new job, or getting a raise or promotion at work. You can also adjust your withholding status if you want to change the tax withheld due to other circumstances.

Other factors can also be checked during your paycheck checkup, such as how much you contribute to your health insurance retirement plan. These expenses can also impact your tax liability.

*This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov⁸

Footnotes and Sources

8. ^{IRS.gov, May 8. 2024}

Starting a new business? There are some tax tips to know to get yourself moving in a positive direction something like that the Internal Revenue Service (IRS) shares for new business owners:

Choose the proper business structure: The form of business determines which income tax return a business taxpayer needs to file. The most common business structures are a sole proprietorship, a partnership, a corporation, an S corporation, and an LLC.

Apply for an Employer Identification Number (EIN): An EIN is used to identify a business.

*This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov⁶

Footnotes and Sources

6. ^{IRS.gov, May 8, 2024}

The Internal Revenue Service (IRS) shared guidelines that tax pros should follow to protect taxpayer data, but these principles are sound for everyone to practice.

Anti-virus software: This software scans computer files for malicious software or malware on the device. Anti-virus vendors find new issues and update malware daily. Always install the latest software updates on your computer.

Two-factor authentication: Two-factor authentication adds an extra layer of protection beyond just a password. Not only do you enter your username and password, but you also enter a security code that the service provider can send to another device for extra protection.

Drive encryption: Drive encryption transforms sensitive data into unreadable code that unauthorized people cannot decipher easily, so only the authorized person can access the data.

*This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov⁹

Footnotes and Sources

9. ^{IRS.gov, May 8, 2024}

If you’re looking for a way to give back to your community and help people with low-to-moderate incomes, consider applying to volunteer with the Volunteer Income Tax Assistance or Tax Counseling for the Elderly programs. These programs offer free tax help to senior citizens, persons with disabilities, and those who speak limited English to understand their tax situations.

Here are some of the perks of being a VITA or TCE volunteer:

• Flexible hours: Generally, volunteers contribute 3-5 hours per week. Some sites are open all year, but most programs are open from January to April.
• Convenience: Thousands of VITA and TCE sites are set up in neighborhoods across the country, so it’s convenient to volunteer at a location close to home. These locations are usually community centers, libraries, schools, and malls.
• No experience needed: You don’t have to be a tax pro to volunteer because all volunteers receive special training and can serve in various roles.

*This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov⁶

Footnotes and Sources

6. ^{IRS.gov, May 8. 2024}

If an organization wants to apply for tax-exempt status under Section 501(c)(3), it starts by filling out a Form 1023-series application. It must submit a complete application and the user fee. Organizations also need their employer identification number to complete the application. Generally, an organization that is required to apply for recognition of exemption must notify the Internal Revenue Service (IRS) within 27 months from the date of formation.

Some organizations (including churches or public charities whose annual gross receipts are less than $5,000) may not need to apply for 501(c)(3) status to be tax-exempt. When the IRS determines an organization qualifies for exemption under Section 501(c)(3), it will also be classified as a foundation unless it is a public charity.

*This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov⁷

Footnotes And Sources

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Here are a few facts about credits and deductions that can guide you through your year-round tax preparation:

• Taxable income remains after someone subtracts any eligible deductions from their adjusted gross income, including the standard deduction. Some taxpayers may itemize their deductions to reduce their adjusted gross income.
• The Tax Cuts and Jobs Act changed itemized deductions. In comparing these changes, many individuals accustomed to itemizing may find it more beneficial to take the standard deduction.
• Generally, if a taxpayer’s itemized deductions are more significant than their standard deduction, they should itemize. Depending on the situation, some taxpayers may even be required to itemize.

Taxpayers can subtract tax credits from the total amount of tax they owe. To claim a credit, taxpayers should keep records demonstrating their eligibility. Some major tax credits include the child tax credit, the child and dependent care credit, the American opportunity credit or lifetime learning credit, and the earned income tax credit.

*This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov⁸

Footnotes and Sources

8. ^{IRS.gov, March 1, 2023}