U.S. crypto fans are not happy with the White House proposal to institute a 30 percent crypto mining tax. They are not alone. European Union (EU) members have agreed to crack down on crypto tax evasion by having member states share digital holdings data. The Directive on Administrative Cooperation (DAC8) introduced last December is a crypto-tax framework that would increase surveillance of crypto exchanges, marketplaces, and other crypto-related services. This latest EU crypto effort aims to increase tax transparency in crypto assets and to combat tax evasion and avoidance. Approval of DAC8 which could generate additional tax revenue of around... Read more →
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Meanwhile, even crypto-mining-friendly Texas is exploring ways to limit such operations' heavy use of the Lone Star State's power grid. Austin Technology Council Texas is known for many things. Now, two of them, cryptocurrency mining and hot summers, are colliding. The Lone Star State has become a major hub for bitcoin miners. Many operations set up shop here because of the state has vast spaces needed for the operations. Then there's Texas' mostly independent power grid, which has few connections to the rest of the country. This has allowed Texas to avoid federal oversight. And don't forget Texas' demand response... Read more →
Photo by Alesia Kozik The devil is in the details, especially when it comes to taxes. That's why the Internal Revenue Service today updated its almost decade-old guidance on cryptocurrency. Specifically, the IRS clarified that while Uncle Sam doesn't consider crypto as a currency, other jurisdictions do. In its Notice 2014-21, the IRS stated that digital currencies were not legal tender. Nine years later, however, the IRS acknowledges that other countries have officially recognized Bitcoin as legal tender. "Thus, the sentence in the background section of Notice 2014-21 stating that virtual currency does not have legal tender status in any... Read more →
White House Budget video screenshot. Full video is available at Facebook and Twitter. The Biden Administration released its fiscal year 2024 budget today (March 9, 2023). Thanks to previews from President Joe Biden, there are no surprises as far as taxes. "I want to make it clear I'm going raise some taxes," Biden to told a group in Virginia Beach, Virginia, who gathered Feb. 28 to hear about healthcare. "Many of you are billionaires out there. You're going to stop paying at 3 percent. Not a joke." The president's promise was put in writing today with the issuance by the... Read more →
If you dabbled, or more, in innovative financial assets like crypto in 2022, then one of the most important lines on your 2022 tax return shows up early. The section just below where you enter your (and, if married filing jointly, your spouse's) name, the Internal Revenue Service asks: At any time during 2022, did you: (a) receive (as a reward, award, or payment for property or services); or (b) sell, exchange, gift, or otherwise dispose of a digital asset (or a financial interest in a digital asset)? (See instructions.) See more tax forms and more about them at 2022's... Read more →
We're just a couple of weeks into this new year, and I've received three 1099s and a donation thank-you letter. I am not alone. Official tax forms and statements are filtering into mail boxes, both curbside and electronic, across the country. The exact tax-related documents differ from taxpayer to taxpayer, but we all share one thing. We need them in order to accurately fill out annual tax returns. They include W-2 forms for folks with wage-paying jobs, 1099-NECs for freelancers, and 1099-MISC and DIV documents for those who have investment earnings. It is, after all, called an income tax. But... Read more →
Merry Monday Holiday After Christmas on Sunday. Happy Boxing Day. Joyous End-of-Year Tax Tasks to Complete Week. Yep, the start of the last week of 2022 has a lot of identities. But it's that last designation that you need to pay close attention to, since the end of the tax year is critical when it comes to many tax moves. Here are eight you need to consider and, if they apply to you, complete by Dec. 31 — or actually by Friday, Dec. 30, in some cases since it's the last business day of 2022. 1. Take your required minimum... Read more →
The sports arena in Miami bore the FTX name until the cryptocurrency exchange filed for bankruptcy. (Photo by 350z33 via Wikipedia Commons) Even before the FTX meltdown, cryptocurrency operations were in regulators' and legislators' sights. Now more, worldwide, are calling for added government attention to the sector. European Central Bank (ECB) President Christine Lagarde has called regulation and supervision of crypto an "absolute necessity." Gary Gensler, chair of the U.S. Securities and Exchange Commission (SEC), in a Yahoo Finance interview today said his agency already has the authority it needs to oversee the crypto industry. But he also noted that... Read more →
Photo by Guneet Jassal on Unsplash It's December! Are you ready for all the decorating and shopping and cooking and parties and tax moves to make? Yep, tax actions need to be added to your already very long holiday to-do list. You only have 31 days to take advantage of some Internal Revenue Code provisions that could save you money. That's always a welcome gift from Uncle Sam, but especially at this time of year. Plus, if you take relevant tax steps sooner in the month, you'll also free up time for more traditional festivities. So let's get to it.... Read more →
Is your retirement plan on target? Maybe not, thanks (no thanks!) in part to the COVID pandemic and inflation. People have been, understandably, more focused of late on meeting daily living expenses than saving for the future. Such financial concerns likely are partially responsible for the results of a new retirement savings report from Fidelity. The Boston-based investment company found that the average 401(k) balance declined for the third straight quarter. It dipped below the six-figure mark, coming in at $97,200. That's 23 percent lower than a year ago. The average individual retirement arrangement (IRA) balance also dropped. The average... Read more →
Some of my grandmother's paintings, known as the main Vera Gallery in our house. (Photo by Kay Bell) The hubby and I are art fans, primarily of painted works. That's why almost all of our vacations include a visit to our destinations' museums. Our appreciation of a piece hanging on a wall is why most of our rooms are adorned by framed artworks. Most are signed limited edition print versions of our favorite painters' works. But we also have some originals of a few notable artists, as well as works that are more sentimental but just as lovely, like the... Read more →
Right now, a lot of folks are thinking they should have been like Larry. The Larry they wished they'd emulated is Larry David, known for his curmudgeonly television character. He tweaked that persona to become a naysayer on several inventions that, per the commercial's Super Bowl debut, changed the world. The television ad for FTX crypto exchange advised viewers, "Don't be like Larry" and instead invest in digital currency via the company. On Friday, Nov. 11, FTX filed for bankruptcy following reports that between $1 billion to $2 billion of FTX customer funds disappeared. Continuing crypto troubles: This is just... Read more →
Getting your tax ducks in a row takes on a different meaning in November. But whatever bird you choose for the metaphor, make some time this month to complete tasks that will prevent tax turkeys. (Photo by Mohan Nannapaneni) November, the eleventh and penultimate month of the year, is like everything else in life. As a deadline nears, the end of 2022 in this case, the number of tasks to tackle grows. A lot. During these next 30 days we have holidays, both official like Thanksgiving and Veterans Day, and unofficial like National Doughnut Appreciation Day on 11/5, and which... Read more →
Plus a look at how higher costs of living affect capital gains, youngsters' investment earnings, gifts, and more. Image via Giphy Them that got, are them that get. Not only is that a lyric (and theme) from a fabulous Ray Charles song, it's a good synopsis of the current estate tax law, especially with 2023 inflation adjustments. Many of the current wealth-related tax provisions help the richest among us stay that way. But some of them can help all of us, regardless of our income level, increase our relative wealth. And, as reviewed in this Part 6 of the ol'... Read more →
Cryptocurrency continues to make inroads into our daily lives, including our taxes. On Sept. 1, Colorado officially became the first U.S. state to allow its residents to pay their state taxes in bitcoin. It's a pretty safe assumption that those Centennial State residents who pay state taxes with bitcoin also will be forthcoming at the federal level when it comes to their digital assets. But for those who are less transparent, the Internal Revenue Service is stepping up its efforts to know about and collect on crypto transactions. Legal action against hidden crypto: Last week, the IRS obtained a so-called... Read more →
Photo by Karolina Grabowska I have money in the stock market. When I was a younger investor, I checked my assets a lot. Like almost every day. Then I realized that was just going to make me crazy(ier), so I shifted to a monthly review of where my holdings were. Now I just check quarterly. Most of the reason for my reduction in the frequency of my equity evaluations is that I'm at that part of my life where my holdings are pretty much set for my fast-approaching retirement years. The good news is that the recent market dive, while... Read more →
If you believe cryptocurrency has democratized financial services and leveled the financial playing field, then have we got a deal for you. And by deal, we mean scam. That's a major finding of recently released U.S. Department of Treasury report, which also wants regulators to take more action against crypto fraud and scammers. The report, Crypto-Assets: Implications for Consumers, Investors, and Businesses, is in response to President Joe Biden's March 9 Executive Order 14067, which, directed Treasury (among other agencies) to examine ways to "ensure responsible development of digital assets." That's going to take a multi-agency effort, according to Treasury,... Read more →
Some on Capitol Hill want to make it easier for you to use your Bitcoin and other cryptocurrencies to make small, every day purchases. The 2022 election year legislative calendar might be working against them, but Congressional fans of cryptocurrency still are looking at ways to make it more appealing to mass consumers. On July 26, two Senate Banking Committee members, including the committee's top Republican, introduced the Virtual Currency Tax Fairness Act. The bill, cosponsored by Ranking Member Sen. Pat Toomey (R-Pennsylvania) and Sen. Kyrsten Sinema (D-Arizona) would, in part, make small personal virtual currency transactions for goods and... Read more →
Photo by Karolina Grabowska Cryptocurrencies are going through a rough patch, at least as far as the investment world is concerned. But devotees of the virtual assets insist they are here to stay, and that general acceptance of digital currency as payments for retail purchases is on the way. A recent survey seems to support that position. Widespread retail crypto payments expected soon: A majority of U.S. retailers expect digital currency payments to be the norm in the next five years, according to a study released last month by Deloitte in collaboration with PayPal. The study's poll in December 2021... Read more →
U.S. Department of the Treasury building, Washington, D.C. On March 9, President Joe Biden signed an executive order calling for a study of digital currencies. Advocates of regulating digital assets immediately pounced on the order. They viewed it as a bureaucratic move that would delay what they see as necessary government oversight of the expanding digital financial world. They were partially right. Even though the order, titled "Ensuring Responsible Development of Digital Assets," directed agencies across the federal government to produce reports on digital currencies and consider new regulations, not much has happened, at least publicly. Until now. The Treasury... Read more →