19 Jan 2022
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Help Safeguard your Personal Information by Filing your 2021 Tax Return Early

Roger Rossmeisl, CPA
Individual Tax Briefs
Help Safeguard Your Personal Information by Filing your 2021 Tax Return Early

The IRS announced it is opening the 2021 individual income tax return filing season on January 24. (Business returns are already being accepted.) Even if you typically don’t file until much closer to the April deadline (or you file for an extension until October), consider filing earlier this year. Why? You can potentially protect yourself from tax identity theft — and there may be other benefits, too. How tax identity theft occurs In a tax identity theft scheme, a thief uses another individual’s personal information to file a bogus tax return early in the filing season and claim a fraudulent refund. The actual taxpayer discovers the fraud when he or she files a return and is told by the IRS that it is being rejected because one with...

11 Jan 2022
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How Will Revised Tax Limits Affect Your 2022 Taxes?

Roger Rossmeisl, CPA
Individual Tax Briefs
How Will Revised Tax Limits Affect Your 2022 Taxes?

While Congress didn’t pass the Build Back Better Act in 2021, there are still tax changes that may affect your tax situation for this year. That’s because some tax figures are adjusted annually for inflation. If you’re like most people, you’re probably more concerned about your 2021 tax bill right now than you are about your 2022 tax situation. That’s understandable because your 2021 individual tax return is generally due to be filed by April 18 (unless you file an extension). However, it’s a good idea to acquaint yourself with tax amounts that may have changed for 2022. Below are some Q&As about tax amounts for this year. I have a 401(k) plan through my job. How much can I contribute to it? For 2022, you can contribute up...

05 Jan 2022
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Are You Eligible for a Medical Expense Tax Deduction?

Roger Rossmeisl, CPA
Individual Tax Briefs
Are You Eligible for a Medical Expense Tax Deduction?

You may pay out a bundle in out-of-pocket medical costs each year. But can you deduct them on your tax return? It’s possible but not easy. Medical expenses can be claimed as a deduction only to the extent your unreimbursed costs exceed 7.5% of your adjusted gross income. Plus, medical expenses are deductible only if you itemize, which means that your itemized deductions must exceed your standard deduction. Qualifying costs include many items other than hospital and doctor bills. Here are some items to take into account in determining a possible deduction: Insurance premiums. The cost of health insurance is a medical expense that can total thousands of dollars a year. Even if your employer provides you with coverage, you can deduct the portion of the premiums you...

05 Jan 2022
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Tax Obligations of Gig Workers

Roger Rossmeisl, CPA
Individual Tax Briefs
Tax Obligations of Gig Workers

The number of people engaged in the “gig” or sharing economy has grown in recent years. In an August 2021 survey, the Pew Research Center found that 16% of Americans have earned money at some time through online gig platforms. This includes providing car rides, shopping for groceries, walking dogs, performing household tasks, running errands and making deliveries from a restaurant or store. There are tax consequences for the people who perform these jobs. Basically, if you receive income from an online platform offering goods and services, it’s generally taxable. That’s true even if the income comes from a side job and even if you don’t receive an income statement reporting the amount of money you made. Traits of gig workers Gig workers are those who are independent...

27 Dec 2021
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Do You Qualify for the Student Loan Interest Deduction?

Roger Rossmeisl, CPA
Individual Tax Briefs
Do You Qualify for the Student Loan Interest Deduction?

If you’re paying back college loans for yourself or your children, you may wonder if you can deduct the interest you pay on the loans. The answer is yes, subject to certain limits. The maximum amount of student loan interest you can deduct each year is $2,500. Unfortunately, the deduction is phased out if your adjusted gross income (AGI) exceeds certain levels, and as explained below, the levels aren’t very high. The interest must be for a “qualified education loan,” which means a debt incurred to pay tuition, room and board, and related expenses to attend a post-high school educational institution, including certain vocational schools. Certain postgraduate programs also qualify. Therefore, an internship or residency program leading to a degree or certificate awarded by an institution...

17 Dec 2021
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Year-End Tax Strategies for Stock Market Investors to Consider

Roger Rossmeisl, CPA
Individual Tax Briefs
Year-End Tax Strategies for Stock Market Investors to Consider

Year-end is a good time to plan to save taxes by carefully structuring your capital gains and losses. Consider some possibilities if you have losses on certain investments to date. For example, suppose you lost money this year on some stock and have other stock that has appreciated. Consider selling appreciated assets before December 31 (if you think their value has peaked) and offsetting gains with losses. Long-term capital losses offset long-term capital gains before they offset short-term capital gains. Similarly, short-term capital losses offset short-term capital gains before they offset long-term capital gains. You may use up to $3,000 ($1,500 for married filing separately) of total capital losses in excess of total capital gains as a deduction against ordinary income in computing your adjusted gross income...

17 Dec 2021
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How are Court Awards and Out-of-Court Settlements Taxed?

Roger Rossmeisl, CPA
Individual Tax Briefs
How are Court Awards and Out-of-Court Settlements Taxed?

Awards and settlements are routinely provided for a variety of reasons. For example, a person could receive compensatory and punitive damage payments for personal injury, discrimination or harassment. Some of this money is taxed by the federal government, and perhaps state governments. Hopefully, you’ll never need to know how payments for personal injuries are taxed. But here are the basic rules — just in case you or a loved one does need to understand them. Under tax law, individuals are permitted to exclude from gross income damages that are received on account of a personal physical injury or a physical sickness. It doesn’t matter if the compensation is from a court-ordered award or an out-of-court settlement, and it makes no difference if it’s paid in a...

14 Dec 2021
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3 Ideas That May Help Cut Your Year-End Tax Bill

Roger Rossmeisl, CPA
Individual Tax Briefs
3 Ideas that May Help Cut Your Year-End Tax Bill

If you’re starting to worry about your 2021 tax bill, there’s good news — you may still have time to reduce your liability. Here are three quick strategies that may help you trim your taxes before year-end. 1. Accelerate deductions/defer income. Certain tax deductions are claimed for the year of payment, such as the mortgage interest deduction. So, if you make your January 2022 payment in December, you can deduct the interest portion on your 2021 tax return (assuming you itemize). Pushing income into the new year also will reduce your taxable income. If you’re expecting a bonus at work, for example, and you don’t want the income this year, ask if your employer can hold off on paying it until January. If you’re self-employed, you can...

07 Dec 2021
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New Digital Asset Reporting Requirements are Coming

Roger Rossmeisl, CPA
Individual Tax Briefs, Technology
New Digital Asset Reporting Requirements are Coming

The Infrastructure Investment and Jobs Act (IIJA) was signed into law on November 15, 2021. It includes new information reporting requirements that will generally apply to digital asset transactions starting in 2023. Cryptocurrency exchanges will be required to perform intermediary Form 1099 reporting for cryptocurrency transactions. Existing reporting rules If you have a stock brokerage account, whenever you sell stock or other securities, you receive a Form 1099-B after the end of the year. Your broker uses the form to report transaction details such as sale proceeds, relevant dates, your tax basis and the character of gains or losses. In addition, if you transfer stock from one broker to another broker, the old broker must furnish a statement with relevant information, such as tax basis, to the...

ROGER ROSSMEISL, CPA

Kho & Patel CPAs
160 E. Arrow Highway
San Dimas, CA 91773

(714) 325-0442
roger@khopatel.com

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