When the tax laws changed in 2018, most people no longer had to use the itemized deductions (Schedule A), but found it easier and more beneficial to just use the standard deduction.  Generally, I find that there is a small minority that still itemize.  They usually have a lot of property taxes, large amounts mortgage interest and give a generous amount to charities (such as tithing 10% to their church).

What most people don't know about is that you can use your charitable giving to control the amount of taxes you pay in a particular year.  For example, you can bunch donations into a single year that you usually giver over several years.  On the other hand, if you are expecting to have more income next year, then you'd want to defer some charitable donations and instead make them the following year.

One of the biggest tax pains in the last two decades in the tax preparation world has been when two separated or divorced parents both try to claim the same child - regardless of who had the right to.  You see, the IRS doesn't care what a separation or divorce decree says.  They got tired of reading them to make determinations.   So they came us with the custodial parent rules.

Because they don't trust United States persons resident abroad and green card holders to pay their taxes, the IRS has issued final regulations on required income tax withholding for certain types of retirement distributions. These regulations apply to distributions from deferred compensation plans (such as 401(k)s), IRAs, and commercial annuities.

Under the final regulations, mandatory income tax withholding requirements for periodic distributions (§3405(a)) or non-periodic distributions (§3405(b)) depend on the payee’s residence address given to the payor.

I'm always amazed each tax season that people don't really know how the profits and losses from stock sales (capital gains) are taxed at the federal level, much less the state level.  Depending on your income, they can be taxed at three different rates: 0%, 15%, or 20%.

Each year the IRS also unveils the new income tax thresholds that determine each rate. reflecting adjustments for inflation. Here are the new limits for 2025, (which will apply to tax returns you'll normally file in 2026) could have significant implications for taxpayers, particularly those with investment income.

So, let's break down the new numbers and compare them to the 2024 thresholds.

For 2025, the long-term capital gains tax rates (for assets held for one year and a day or more) remain at 0%, 15%, and 20%, but when you qualify for them has changed.

The US Supreme Court recently ruled in a case called Polselli v. IRS, that the IRS can sometimes secretly probe bank records without notice to taxpayers. Under an existing statute, the IRS can also without notice request and examine bank records of people who don't even owe it money - like friends, family, and associates of a taxpayer who does owe the IRS.

This dispute began when a taxpayer (Remo Polselli) owed more than $2 million in taxes to the IRS.

One of subjects that seems to come up when doing people's taxes and I see that they have changed jobs that had retirement plans is: What did you do with your retirement plan at your previous employer?

I have also found it amazing how many people have not even thought about it, or know what their options are.  So, here is a short primer on your options.

#1 - 401(k) rollover: Keep you savings with your previous employer's plan

The IRS can take the fun out of just about anything.  Case in point:  Last week, baseball phenom Shohei Ohtani became the first major league player to start the “50-50 club” by hitting 50 home runs and stealing 50 bases in a single season.   And when he did that, one lucky fan in Miami caught the 50th home run ball and walked away with it even though he had the opportunity to give it to the Dodgers. No one yet knows whether the lucky fan will keep the ball or sell it. Should he decide to sell it , it could be worth hundreds of thousands, or even more than a million dollars. With these numbers, the ball could come with a huge tax bill.

The IRS has finally released the final regulations on how brokers have to report the of sales and exchanges of digital assets.  The new regulations apply to broker transactions starting in 2025, for Forms 1099-DA, Digital Asset Proceeds from Broker Transactions that will be issued in January of 2026.