IRS RELEASES GUIDANCE ON HOW TO REPORT BITCOIN TRANSACTIONS Bitcoin, and other virtual currency, is to be treated like property for tax purposes similar to stock transactions. Notice 2014-21 was released by the IRS this week to clarify the reporting requirements on transactions involving virtual currency. In some environments, virtual currency operates like “real” currency — i.e., the coin and paper money of the United States or of any other country that is designated as legal tender, circulates, and is customarily used and accepted as a medium of exchange in the country of issuance — but it does not have legal tender status in any jurisdiction. The notice provides that virtual currency is treated as property for U.S. federal tax purposes. General tax principles that apply to property transactions apply to transactions using virtual currency. Among other things, this means that: Wages paid to employees using virtual currency are taxable to the employee, must be reported by an employer on a Form W-2, and are subject to federal income tax withholding and payroll taxes. Payments using virtual currency made to independent contractors and other service providers are taxable and self-employment tax rules generally apply. Normally, payers must issue Form 1099. … Read More
Several incidents over the past couple of months have been directed at tax professionals from unhappy clients. In Chicago Heights, Illinois a Liberty Tax preparer pulled a gun on a customer’s boyfriend who police said threatened to beat him up during a dispute over fees. The boyfriend, 34, has reportedly been charged with assault after confronting the preparer over $500 in additional fees that his girlfriend was charged for her return. The preparer did possess a valid gun license. A 53-year-old man is accused of choking an H & R block employee in Kirkwood, Missouri. The client was enraged about his “tax situation.” Police told news outlets that the assailant knocked the Block employee to the ground and is now charged with misdemeanor assault. The Block worker reported minor injuries but did not require hospital treatment. Another incident involved gunfire and beatings in the Detroit office of Tax City Tax Service. A 19-year-old local man became enraged after the woman he was in the office with couldn’t get her refund in cash. Four people were shot in the scuffle.
Health and Human Services (HHS) Secretary Kathleen Sebelius told the House Ways and Means Committee on March 12 that the Obama administration has no plans to delay the Patient Protection and Affordable Care Act’s individual mandate or its tax penalty for those who fail to enroll in coverage by the end of March. As of February 25, 2014, the Marketplaces had enrolled four-million individuals. “New premium tax credits and rules ensuring fair premium rates are making private coverage more affordable for consumers,” Sebelius told lawmakers. Sebelius also announced that those individuals who have faced a delayed enrollment period in the health exchanges through no fault of their own would still be eligible for the premium tax credit. Check out Healthcare.gov for more information on enrollment.
In a recent CNN interview, NSTP member Isaac McRae, EA addressed the issue of newlyweds and their tax filing status. “Marriage is defined by your filing status at the end of the year,” said licensed tax practitioner Isaac McRae. “You have the option of married filing jointly, or married filing separately, which is much different from filing as a single individual, or head of household individual.” Click here for the complete interview.