Computer on Wheels

01/28/2026

Parents remember if your baby was born in 2025, apply for this free $1000 savings program.

Trump Accounts provide eligible American children with tax-advantaged investment accounts courtesy of President Donald J. Trump.

01/22/2026

Strict IRS home office requirements

The IRS applies strict standards to determine whether a home office qualifies for a deduction. First, the space must be used exclusively for business purposes. Any personal use, such as a shared dining area or guest room, disqualifies the deduction. Second, the use must be regular, meaning the space is consistently used as the main place of business or for meeting clients or patients. Occasional or convenience-based use does not meet IRS criteria. These requirements often prevent many remote workers from qualifying, even if they work from home full time.

09/19/2023

Avoiding identity theft scammers posing as the IRS

Imitation may be the sincerest form of flattery, but when scammers pose as the IRS it means trouble for taxpayers. Identity thieves may contact taxpayers through fraudulent calls, emails, texts or social media messages pretending to be the IRS. Here are tips to help taxpayers know when the IRS is contacting them.

Letters and notices
A letter or notice is usually the first way the IRS will contact a taxpayer. When a taxpayer receives a suspicious letter or notice, they can check to see if it’s really the IRS:

Log in to their secure IRS Online Account to see if a copy of the notice or letter is in their file.
Review common IRS letters and notices at the Understanding Your IRS Notice or Letter page on IRS.gov.
Contact IRS customer service directly to authenticate it, if they weren’t able to authenticate in their online account.
Verify that any collection notice from a private collection agency has the same Taxpayer Authentication Number as the Notice CP40 the taxpayer received from the IRS. Taxpayers can visit Private Debt Collection Frequently Asked Questions to learn more about verifying a private collection agency.
Phone calls
After first mailing a notice or letter to a taxpayer, IRS agents may call to confirm an appointment or discuss items for a scheduled audit. Taxpayers should know that:

The IRS doesn’t leave pre-recorded, urgent or threatening messages. Scammers will tell victims that if they do not call back, a warrant will be issued for their arrest. Anyone making threats is a scammer.
Private collection agencies contracted by the IRS may call taxpayers to collect certain outstanding inactive tax liabilities, but only after the taxpayer and their representative have received written notice.
The IRS and its authorized private collection agencies will never ask a taxpayer to pay using any form of pre-paid card, store or online gift card. Taxpayers can review the IRS payments page at IRS.gov/payments for all legitimate ways to make a payment.
Email, text and social media
The IRS doesn't first contact taxpayers by email, text message or social media channels to request personal or financial information. Some common electronic scams that thieves use are:

Sending phishing emails to taxpayers.
Posing as an IRS social media account to contact taxpayers about a fake bill or refund.
Texting taxpayers about fake “tax credits” or "stimulus payments."
These messages will often direct taxpayers to click fraudulent links they claim are IRS websites or other online tools. Again, the IRS will mail a letter or notice before calling or emailing, and it will never contact a taxpayer by social media or text message.

In person visits
The IRS recently ended most unannounced visits to taxpayers by agency revenue officers. Ending these unannounced visits to taxpayers will improve overall safety for taxpayers and IRS employees.

Make payments, view your account or apply for a payment plan with the IRS.

07/31/2023

Tax considerations for people who are separating or divorcing

When couples separate or divorce, the change in their relationship status affects their tax situation. The IRS considers a couple married for tax filing purposes until they get a final decree of divorce or separate maintenance.

Update tax withholding
When a taxpayer divorces or separates, they usually need to update their proper tax withholding by filing with their employer a new Form W-4, Employee's Withholding Certificate. If they receive alimony, they may have to make estimated tax payments. Taxpayers can figure out if they’re withholding the correct amount with the Tax Withholding Estimator on IRS.gov.

Tax treatment of alimony and separate maintenance

Amounts paid to a spouse or a former spouse under a divorce decree, a separate maintenance decree or a written separation agreement may be alimony or separate maintenance for federal tax purposes.
Certain alimony or separate maintenance payments are deductible by the payer spouse, and the recipient spouse must include it in income.
Rules related to dependent children and support
Generally, the parent with custody of a child can claim that child on their tax return. If parents split custody fifty-fifty and aren't filing a joint return, they'll have to decide which parent claims the child. If the parents can’t agree, taxpayers should refer to the tie-breaker rules in Publication 504, Divorced or Separated Individuals. Child support payments aren't deductible by the payer and aren't taxable to the payee.

Not all payments under a divorce or separation instrument – including a divorce decree, a separate maintenance decree or a written separation agreement – are alimony or separate maintenance. Alimony and separate maintenance doesn’t include:

Child support
Noncash property settlements – whether in a lump-sum or installments
Payments that are your spouse's part of community property income
Payments to keep up the payer's property
Use of the payer's property
Voluntary payments
Child support is never deductible and isn't considered income. Additionally, if a divorce or separation instrument provides for alimony and child support and the payer spouse pays less than the total required, the payments apply to child support first. Only the remaining amount is considered alimony.

Report property transfers, if needed
Usually, if a taxpayer transfers property to their spouse or former spouse because of a divorce, there’s no recognized gain or loss on the transfer. People may have to report the transaction on a gift tax return.

07/20/2023

Tax to-dos for newlyweds to keep in mind

Anyone saying “I do” this summer should review a few tax-related items after the wedding. Big life changes, including a change in marital status, often have tax implications. Here are a few things couples should think about after they tie the knot.

Name and address changes
People who change their name after marriage should report it to the Social Security Administration as soon as possible. The name on a person's tax return must match what is on file at the SSA. If it doesn't, it could delay any tax refund. To update information, taxpayers should file Form SS-5, Application for a Social Security Card. The form is available on SSA.gov, by calling 800-772-1213 or at a local SSA office.

If marriage means a change of address, the IRS and U.S. Postal Service need to know. To do that, people should send the IRS Form 8822, Change of Address. Taxpayers should also notify the postal service to forward their mail by going online at USPS.com or by visiting their local post office.

Double-check withholding
After getting married, couples should consider changing their withholding. Newly married couples must give their employers a new Form W-4, Employee's Withholding Allowance within 10 days. If both spouses work, they may move into a higher tax bracket or be affected by the additional Medicare tax. They can use the Tax Withholding Estimator on IRS.gov to help complete a new Form W-4. Taxpayers should review Publication 505, Tax Withholding and Estimated Tax for more information.

Filing status
Married people can choose to file their federal income taxes jointly or separately each year. For most couples, filing jointly makes the most sense, but each couple should review their own situation. If a couple is married as of December 31, the law says they're married for the whole year for tax purposes.

06/14/2023

Tax considerations when selling a home

Many people move during the summer. Taxpayers who are selling their home may qualify to exclude all or part of any gain from the sale from their income when filing their tax return.

When selling a home, homeowners should think about:

Ownership and use
To claim the exclusion, the taxpayer must meet ownership and use tests. During the five-year period ending on the date of the sale, the homeowner must have owned the home and lived in it as their main home for at least two years.

Gains
Taxpayers who sell their main home for a capital gain may be able to exclude up to $250,000 of that gain from their income. Taxpayers who file a joint return with their spouse may be able to exclude up to $500,000. Homeowners excluding all the gain do not need to report the sale on their tax return unless a Form 1099-S was issued.

Losses
Some taxpayers experience a loss when their main home sells for less than what they paid for it. This loss is not deductible.

Multiple homes
Taxpayers who own more than one home can exclude the gain only on the sale of their main home. They must pay taxes on the gain from selling any other home.

Reported sale
Taxpayers who don't qualify to exclude all of the taxable gain from their income must report the gain from the sale of their home when they file their tax return. Anyone who chooses not to claim the exclusion must report the taxable gain on their tax return. Taxpayers who receive Form 1099-S, Proceeds from Real Estate Transactions, must report the sale on their tax return even if they have no taxable gain.

Mortgage debt
Generally, taxpayers must report forgiven or canceled debt as income on their tax return. This includes people who had a mortgage workout, foreclosure or other canceled mortgage debt on their home. Taxpayers who had debt discharged, in whole or in part on a qualified principal residence can't exclude that debt from income unless it was discharged before January 1, 2026, or a written agreement for the debt forgiveness was in place before January 1, 2026.

Possible exceptions
There are exceptions to these rules for some individuals, including persons with a disability, certain members of the military or intelligence community and Peace Corps workers.

More information:
Selling Your Home, Publication 523
Canceled Debts, Foreclosures, Repossessions, and Abandonments (For Individuals), Publication 4681
How Do I Report the Debt Forgiven on My Residence Due to Foreclosure, Repossession, Abandonment, or Because of a Loan Modification or Short Sale?

06/06/2023

Business travelers should check out these deductions before hitting the road

Many people travel for their job – some for an occasional conference and some travel year-round. Whatever their time on the road, business travelers should know how and when to deduct business travel expenses.

What to know about tax deductions for business travel
Business travel deductions are available for certain people who travel away from their home or main place of work for business reasons. A taxpayer is traveling away from home if they are away for longer than an ordinary day's work and they need to sleep in a location other than their home to meet the demands of their work while away.

Travel expenses must be ordinary and necessary. They can't be lavish, extravagant or for personal purposes. Employers can deduct travel expenses paid or incurred during a temporary work assignment if the assignment is less than one year.

Travel expenses for conventions are deductible if attending them benefits the business. There are special rules for conventions held outside of North America.

Deductible travel expenses include:

Travel by plane, train, bus or car between home and a business destination
Fares for taxis or other types of transportation between an airport or train station and a hotel, or from a hotel to a work location
Shipping of baggage and sample or display material between regular and temporary work locations
Using a personally owned car for business
Lodging and meals
Dry cleaning and laundry
Business calls and communication
Tips paid for services related to any of these expenses
Other similar ordinary and necessary expenses related to the business travel
Taxpayers can find more about the rules for travel deductions with Publication 463, Travel, Gift, and Car Expenses.

Self-employed individuals or farmers with travel deductions

Self-employed people can deduct travel expenses on Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship).
Farmers can deduct travel expenses on Schedule F (Form 1040), Profit or Loss From Farming.
Travel deductions for Armed Forces reservists
Members of a reserve component of the Armed Forces of the United States can claim a deduction for unreimbursed travel expenses paid during the performance of their duty. These travel expenses must be for travel more than 100 miles away from their home.

Recordkeeping is important
It’s easier to prepare a tax return with organized records. Taxpayers should keep records such as receipts, canceled checks and other documents that support a deduction.

05/31/2023

Issue Number: Tax Tip 2023-74
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The IRS alerts taxpayers of suspected identity theft by letter

Scammers sometimes use stolen Social Security numbers to file fraudulent tax returns and collect refunds. To prevent this, the IRS scans every tax return for signs of fraud. If the system finds a suspicious tax return, the IRS reviews the return and sends a letter to the taxpayer letting them know about the potential ID theft. The IRS won’t process the suspicious tax return until the taxpayer responds to the letter.

The IRS may send these identify fraud letters to taxpayers:

Letter 5071C, Potential Identity Theft with Online Option: This tells the taxpayer to use an online tool to verify their identity and tax return information. If the taxpayer didn’t file, they can let the IRS know with the online tool.
Letter 4883C, Potential Identity Theft: This tells the taxpayer to call the IRS to verify their identity and tax return information. If the taxpayer didn’t file, they can call the Taxpayer Protection Program hotline number on the letter.

Letter 5747C, Potential Identity Theft In Person Appointment: This tells the taxpayer to verify their identity and tax return information in person at a local Taxpayer Assistance Center. If the taxpayer didn’t file, they can call the Taxpayer Protection Program hotline number on the letter.

Letter 5447C, Potential Identity Theft Outside the U.S.: This tells the taxpayer to use an online tool or to call the IRS to verify their identity and tax return information. If the taxpayer didn’t file, they can let the IRS know with the online tool.
Taxpayers should follow the steps in the letter
The identity theft letter will tell the taxpayer the steps they need to take. Taxpayers should follow those steps to resolve the matter with the IRS.

Victims of identity theft can find more resources on reporting and recovering from ID theft with the Federal Trade Commission: identitytheft.gov.

If the taxpayer received an IRS identity theft letter, they don’t need to file an identity theft affidavit
If taxpayers need to give the IRS a heads up that they’re a victim of identity theft or that they think they may be a victim, they can file Form 14039, Identity Theft Affidavit. If a taxpayer has already received an IRS letter about identity theft, they don’t need to file an affidavit.

More information:
Identity Theft Central
How IRS ID Theft Victim Assistance works

05/23/2023

An Identity Protection PIN helps shield taxpayers from tax-related identity theft

Identity Protection PINs stop identity thieves from filing fraudulent tax returns. Taxpayers who participate in this program are assigned a six-digit number that they use to prove their identity when they file their federal tax return. The IRS’s Identity Protection PIN is an added layer of security for taxpayers. In the recent past, the Electronic Tax Administration Advisory Committee called the IP PIN, “The number one security tool currently available to taxpayers from the IRS.”

How to request an IP PIN

After a taxpayer verifies their identity, the Get an IP PIN tool allows people with a Social Security number or individual taxpayer identification number to request an IP PIN online. Taxpayers should review the identity verification requirements before they try to use the Get An IP PIN tool.

Tax pros should advise clients affected by identity theft to request an IP PIN. Even if a thief has already filed a fraudulent tax return, an IP PIN could prevent the taxpayer from being a repeat victim of tax-related identity theft.

Additional information about IP PINs

An IP PIN is valid for one year. For security reasons, new IP PINs are generated each year. Some participants will receive their IP PIN in the mail, while others will have to log in to the Get an IP PIN tool to see their current IP PIN.
Enrolled taxpayers can log back in to the Get an IP PIN tool to see their current IP PIN.
Taxpayers with an IP PIN must use it when filing any federal tax returns during the year, including prior year tax returns or amended returns.
IP PIN users should share their number only with the IRS and their tax preparation provider. The IRS will never call, email or text a request for the IP PIN.
Taxpayers can get an IP PIN now for 2023. The IRS will issue new IP PINs starting in January 2024.
Taxpayers who can't validate their identity online can still get an IP PIN

Taxpayers who can't validate their identity online and whose income is below a certain threshold can file Form 15227, Application for an Identity Protection Personal Identification Number. The 2023 threshold is $73,000 for individuals or $146,000 for married filing jointly.

Once the IRS receives the form, a representative will call the taxpayer at the phone number they provided to validate their identity. Once verified, the taxpayer will get an IP PIN in the mail, usually within four to six weeks.

Taxpayers who can't validate their identity online or by phone, those who are ineligible to file a Form 15227, or are having or technical difficulties can make an appointment at a Taxpayer Assistance Center. They will need to bring one current government-issued picture ID and another identification document to prove their identity. Once verified, the taxpayer will get an IP PIN in the mail, usually within three weeks.

05/16/2023

Installing solar panels or making other home improvements may qualify taxpayers for home energy credits

Homeowners who make improvements like replacing old doors and windows, installing solar panels or upgrading a hot water heater may qualify for home energy tax credits. They should know what these credits can do for them – and be careful of exaggerated claims companies trying to get their business may make.

There are two tax credits to help defray costs for homeowners making energy efficient improvements to their primary or secondary residence. In some cases, renters may also be able to claim specific costs. Landlords can’t use these credits for improvements made to any homes they rent out.

Energy Efficient Home Improvement Credit
Taxpayers can claim the Energy Efficient Home Improvement Credit only for improvements, additions or renovations to an existing home. It doesn’t apply to newly constructed homes. Qualifying costs may include:

Exterior doors, windows, skylights and insulation materials.
Central air conditioners, water heaters, furnaces, boilers and heat pumps.
Biomass stoves and boilers.
Home energy audits.
The amount of the credit taxpayers can take is a percentage of the total improvement expenses in the year of installation:

2022: 30%, up to a lifetime maximum of $500.
2023 through 2032: 30%, up to a maximum of $1,200 annually. Biomass stoves and boilers have a separate annual credit limit of $2,000 annually with no lifetime limit.
Residential Clean Energy Credit
Taxpayers can also claim the Residential Clean Energy Credit for qualifying costs for either an existing home or a newly constructed home. Qualifying costs may include:

Solar, wind and geothermal power generation equipment.
Solar water heaters.
Fuel cells.
Battery storage.
The amount of the credit taxpayers can take is a percentage of the total improvement expenses in the year of installation:

2022 to 2032: 30%, no annual maximum or lifetime limit.
2033: 26%, no annual maximum or lifetime limit.
2034: 22%, no annual maximum or lifetime limit.
To claim these credits, taxpayers should file Form 5695, Residential Energy Credits, with their tax return.

04/05/2023

Understand digital asset reporting and tax requirements

All taxpayers filing 2022 tax year Forms 1040 and 1040-SR must check a box indicating whether they received digital assets as a reward, award or payment for property or services or disposed of any digital asset that was held as a capital asset through a sale, exchange or transfer.

Examples of digital assets transactions include:

A sale of digital assets.
The receipt of digital assets as payment for goods or services provided.
The receipt or transfer of digital assets for free, without providing any consideration, that does not qualify as a bona fide gift.
The receipt of new digital assets as a result of mining and staking activities.
The receipt of new digital assets as a result of a hard fork.
An exchange of digital assets for property, goods or services.
An exchange or trade of digital assets for another digital asset(s).
Any other disposition of a financial interest in digital assets.
Reporting digital assets transactions

If the “yes” box is checked, taxpayers must report all income related to their digital asset transactions.

Taxpayers should use Form 8949, Sales and other Dispositions of Capital Assets, to figure their capital gain or loss and report it on Schedule D (Form 1040), Capital Gains and Losses.

If the transaction was a gift, they must file Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return.

If individuals received any digital assets as compensation for services or disposed of any digital assets they held for sale to customers in a trade or business, they must report the income as they would report other income of the same type. For example, they would report W-2 wages on Form 1040 or 1040-SR, line 1a, or inventory or services on Schedule C.

03/30/2023

All income is taxable, including gig economy and tip income

It’s important for taxpayers to file a federal tax return that has a complete and correct reporting of their income – which may mean including income from sources other than regular wages from an employer. Income from gig economy activities and tip income are two common sources of such income.

Gig economy earnings are taxable
The gig economy is activity where people earn income providing on-demand work, services or goods, such as selling goods online, driving a car for deliveries or renting out property. This income is often received through a digital platform like an app or website.

Taxpayers must report income earned from the gig economy on a tax return, even if the income is:

From part-time, temporary or side work.
Paid in any form, including cash, property, goods or digital assets.
Not reported on an information return form like a Form 1099-K, 1099-MISC, W-2 or other income statement.
For more information taxpayers should visit the gig economy tax center page of IRS.gov.

Reporting service industry tips
People who work in restaurants, salons, hotels and similar service industries often receive tips for the customer service they provide. Tips are generally taxable income, and it's important for people working in these areas who regularly receive tips to understand the requirements on reporting tips.

Tips are optional cash or noncash payments customers make to employees.

Cash tips include those received directly from customers, electronically paid tips distributed to the employee by their employer and tips received from other employees under any tip-sharing arrangement. All cash tips must be reported to the employer, who must include them on the employee's Form W-2, Wage and Tax Statement.
Noncash tips are those of value received in any medium other than cash, such as: tickets, passes or other goods or commodities a customer gives the employee. Employees don’t report noncash tips to their employer, but they must report the value of them on a tax return.
Any cash tips the employee didn't report to the employer must be reported separately on Form 4137, Social Security and Medicare Tax on Unreported Tip Income, to include as additional wages with their tax return. The employee must also pay the employee share of Social Security and Medicare tax owed on those tips.
Employees don't have to report tip amounts of less than $20 per month per employer. For larger amounts, employees must report tips to the employer by the 10th of the month following the month they received the tips.