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Federal and state excise taxes are for specific goods, services, and activities, such as fuel, tobacco, alcohol, airline tickets, and more.

If your business is subject to excise tax, you must file a Form 720, Quarterly Excise Tax Return, to report the tax. You must also file this form every quarter. The due dates as of 2022 are April 30 for Q1, July 31 for Q2, October 31 for Q3, and January 31 for Q4.

You can electronically file Form 720. Each industry may have its forms (ex: Form 2290, Heavy Highway Vehicle Use Tax).

* 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.gov⁵

Footnotes and Sources

5. ^{IRS.gov, August 1, 2022}

A positive start to a new earnings season and late-week hopes for a near-term easing in Fed rate hikes lifted investors’ spirits and powered stocks to gains for the week.

The Dow Jones Industrial Average jumped 4.89%, while the Standard & Poor’s 500 advanced 4.74%. The Nasdaq Composite index added 5.22% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, gained 1.66%.^1,2,3

Earnings, Fed Spark Rally

The stock market narrative shifted last week from Fed interest rate hikes (a persistent drag on investor sentiment) to corporate earnings, which boosted investor enthusiasm with better-than-expected results. Stocks surged in the first two days of trading on the strength of positive earnings surprises, aided by a modest pullback in bond yields and news that the U.K. was scrapping its tax cut plans.

Mid-week, stocks surrendered some gains on a stronger U.S. dollar and rising bond yields. But on Friday, comments by a Fed official that hinted at a possible relaxation in Fed rate hikes sent stocks soaring to close out a good week.

Better Than Expected

Investors were approaching the new earnings season with a fair amount of trepidation amid an environment of higher interest rates and a slowing economy. The concern has been that poor earnings may drag stock prices lower from current levels.

Early earnings results have provided investors with mostly positive surprises. With 88 companies comprising the S&P 500 index reporting, 75% reported profits above analysts’ expectations, well above the 66% long-term average.⁴

Footnotes and Sources

1. ^{The Wall Street Journal, October 21, 2022}
2. ^{The Wall Street Journal, October 21, 2022}
3. ^{The Wall Street Journal, October 21, 2022}
4. ^{Refinitiv, October 20, 2022}

You might hire employees and independent contractors for similar work, but there are important differences in how they are classified. Here are a few questions to consider:

• Does the company have the right to control what the worker does and how the worker does the job?
• Does the business direct or control the financial and business aspects of the worker’s job?
• Are the business aspects of the worker’s job controlled by the payer?
• Are there written contracts or employee-type benefits such as a pension plan, insurance, and vacation pay?
• Will the relationship continue, and is the work performed a key aspect of the business?

Correctly classifying your workers is essential to avoid issues with taxes or 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, August 2, 2022}

Stocks were mixed last week amid wide intra- and inter-day price swings, as technology shares bore the brunt of the downdraft.

The Dow Jones Industrial Average gained 1.15% for the week. Meanwhile, the Standard & Poor’s 500 slipped 1.55%, and the Nasdaq Composite index dropped 3.11%. The MSCI EAFE index, which tracks developed overseas stock markets, lost 2.48%.^1,2,3

Breathtaking Volatility

An above-consensus consumer inflation number sent stocks tumbling in early Thursday trading before inexplicably surging higher in a stunning reversal that saw the Dow Jones Industrial Average rally 1,500 points from its intraday low. Before reversing, stocks had touched levels last seen in 2020. Friday surrendered much of the previous day’s gains, sending stocks mostly lower for the week.⁴

The stock market began the week on a volatile note, with the Nasdaq hitting a two-year low. Recession fears and new export controls may limit U.S. companies from selling advanced semiconductor chips and related manufacturing equipment to China.⁵

Sticky Inflation

September’s inflation reports provided little evidence that inflation was moderating meaningfully. The Producer Price Index’s first report on inflation showed a 0.4% increase in supplier prices over August and an 8.5% increase 12 months ago. While down from August’s 8.7% rise, it was higher than market expectations.⁶

The subsequent release of the Consumer Price Index showed consumer prices rising 0.4% in September and 8.2% year-over-year. More troubling was core inflation (excludes energy and food prices), which gained 0.6% in September and registered an increase of 6.6% from a year ago–the biggest 12-month increase since August 1982.⁷

Footnotes and Sources

1. ^{The Wall Street Journal, October 14, 2022}
2. ^{The Wall Street Journal, October 14, 2022}
3. ^{The Wall Street Journal, October 14, 2022}
4. ^{CNBC, October 13, 2022}
5. ^{CNBC, October 10, 2022}
6. ^{CNBC, October 12, 2022}
7. ^{CNBC, October 13, 2022}

A powerful two-day stock rebound cemented a positive week for investors as a new trading month began.

The Dow Jones Industrial Average rose 1.99%, while the Standard & Poor’s 500 added 1.51%. The Nasdaq Composite index increased 0.73% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, gained 3.42%.^1,2,3

Stocks Start Strongly 

Stocks opened the week posting their best two-day rally since March 2020, as the U.K. prime minister’s decision to reverse a tax cut proposal that had upended financial markets the previous week lifted investors.⁴

Falling yields further lifted investor enthusiasm, as did new economic data indicating a cooling economy. Losses in the last two days erased much of the gains as concerns about higher rates and recession once again moved front and center. The selling pressure was due to a stream of hawkish comments by Fed officials and labor market data that suggested the Fed would likely stick with its rate-hike plans.

A Mixed Labor Picture

Employment-related reports offered conflicting signals on the state of the labor market. In a sign of cooling, the number of open jobs in August fell 10%, while a subsequent report from Automated Data Processing (ADP) showed continued labor market strength. ADP reported private employers added a higher-than-anticipated 208,000 jobs in September, and annual wages rose 7.8% from a year ago.^5,6

Jobless claims rose to 219,000, up from the previous week’s 190,000 and in line with 2019’s average. September’s employment report showed that employers added 263,000 jobs–slightly lower than expectations. The combination of new hiring and lower labor force participation led to a drop in the unemployment rate to 3.5%.^7,8

Footnotes and Sources

1. ^{The Wall Street Journal, October 7, 2022}
2. ^{The Wall Street Journal, October 7, 2022}
3. ^{The Wall Street Journal, October 7, 2022}
4. ^{CNBC, October 3, 2022}
5. ^{The Wall Street Journal, October 4, 2022}
6. ^{CNBC, October 5, 2022}
7. ^{The Wall Street Journal, October 6, 2022}
8. ^{CNBC, October 7, 2022}

If you have a legal agreement with your child’s other parent regarding custody, you likely have questions about claiming the child on your tax return and what credits (if any) for which you are eligible.

It may help if you research the Child Tax Credit as well. The parent who claimed the Child Tax Credit for a qualifying child the previous year may have received the advance child tax credit payments the following year. That means that “an eligible parent who did not receive advance payments for a qualifying child will be able to claim the full amount of the child tax credit for that child on a 2022 tax return even if the other parent received advance child tax credit payments.”

* 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.gov⁴

Footnotes and Sources

4. ^{IRS.gov, February 23, 2022}

Rising recession fears and uncertainty in the bond and currency markets sent stocks to new 2022 lows last week.

The Dow Jones Industrial Average declined 2.92%, while the Standard & Poor’s 500 slumped 2.91%. The Nasdaq Composite index fell 2.69%. The MSCI EAFE index, which tracks developed overseas stock markets, lost 1.94%.^1,2,3

A Tumultuous Week                                                                                                 

U.S. stocks were under pressure all week due to recession concerns and unsettled trading in the bond and currency markets. This stress followed economic steps out of the U.K. During the previous week, the Bank of England (BOE) raised interest rates, and its prime minister announced unfunded tax cuts that the markets interpreted as inflationary.

U.S. bond yields rose early last week, sending stocks lower until Wednesday’s rally following news that the BOE would buy U.K. government bonds. U.S. stocks resumed their descent the following two days to close out a disappointing week, month, and third quarter.

The Bank of England Acts

Global bond and currency markets have been volatile recently due to global central bankers raising interest rates to combat inflation. Developments in the U.K. took center stage last week when the BOE announced it would be buying long-dated U.K. government bonds. Upending the financial markets was the previous week’s announcement of tax cuts by the country’s new prime minister, a step many investors viewed as counterproductive to the BOE’s inflation-fighting efforts.

The BOE’s decision to begin temporary purchases of government bonds was well-received by capital markets, sending U.K. bond yields lower and boosting U.K. stock prices in the immediate aftermath.

Footnotes and Sources

1. ^{The Wall Street Journal, September 30, 2022}
2. ^{The Wall Street Journal, September 30, 2022}
3. ^{The Wall Street Journal, September 30, 2022}

The educator expense deduction allows eligible teachers and administrators to deduct part of the cost of technology, supplies, and training from their taxes. In this case, an “eligible educator” is a taxpayer that is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide. They must work at least 900 hours a year at a school that provides elementary or secondary education.

In 2022, educators can deduct up to $300 of trade or business expenses not reimbursed by their employer, a grant, or another source. Some examples of covered expenses include:

• Professional development course fees
• Books
• Supplies
• Computer equipment
• Other classroom equipment
• Personal protective equipment (masks, disinfectant, etc.)

* 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, February 24, 2022}

Last week, Fed Chair Powell said the U.S. would not tame inflation without economic pain. This week heightened recession fears and sent stocks broadly lower.

The Dow Jones Industrial Average dropped 4.00%, while the Standard & Poor’s 500 lost 4.65%. The Nasdaq Composite index fell 5.07% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, declined 3.05%.^1,2,3

Yields Surge, Stocks Tumble

Last week’s meeting of the Federal Open Market Committee (FOMC) proved unsettling for the financial markets. It wasn’t only the widely expected announcement of another rate hike but a more hawkish message that rates may be heading higher for longer than anticipated. Fed officials indicated that any policy change might be further off than investors had contemplated.

The latest rate hike caused bond yields to rise, with two-year and ten-year Treasury note yields touching levels not seen in over a decade. Global central banks moved in tandem with the Fed, as the Bank of England, Swiss National Bank, and Norway’s Norges Bank, among others, also hiked rates.^4,5

Another Rate Hike

In its effort to cool inflationary forces, the Federal Reserve raised interest rates by 0.75% last week—the third consecutive rate increase of that size. Projections by FOMC members suggested that interest rates may increase by as much as 1.25 percentage points before year-end.⁶

The FOMC also projects that unemployment will rise to 4.4% by December 2023. This projection is up from its current level of 3.7%, and that core inflation will be 4.5% by year-end. In June, Fed officials projected core inflation would be at 4.3% by year-end. They also indicated that interest rates may reach as high as 4.6% in 2023, without any rate cut likely until 2024.⁷

Footnotes and Sources

1. ^{The Wall Street Journal, September 23, 2022}
2. ^{The Wall Street Journal, September 23, 2022}
3. ^{The Wall Street Journal, September 23, 2022}
4. ^{The Wall Street Journal, September 22, 2022}
5. ^{CNBC, September 22, 2022}
6. ^{The Wall Street Journal, September 21, 2022}
7. ^{CNBC, September 21, 2022}

The IRS currently translates important and helpful tax information in seven languages, including:

• Spanish
• Chinese (Traditional)
• Chinese (Simplified)
• Korean
• Russian
• Vietnamese
• Haitian Creole

Some multilingual resources include The Taxpayer Bill of Rights, important filing information, e-file resources, forms and publications, and the IRS2Go mobile app.

For access to information in these languages, taxpayers can click on the English dropdown tab in the top menu bar on the IRS.gov home page. The dropdown will list the other languages a taxpayer can choose to view IRS.gov pages. In addition, the IRS also offers interpreter services in more than 350 languages.

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

Tip adapted from IRS.gov⁷

Footnotes and Sources

7. ^{IRS.gov, March 16, 2022}