Stay informed on the latest tax news and developments, including legislation and rule changes, for effective tax planning and compliance.
IRS Advisory: You must record all income, including that from the gig economy, the service sector, and sources that are digital or international
The IRS reminds taxpayers of their tax obligations for reporting income from the gig economy, service industry tips, digital asset transactions, and foreign sources. The gig economy refers to providing on-demand work, services, or goods, often via a digital platform. Such income is taxable and must be reported, regardless of the form of payment or information return received. Service industry tips, whether received in cash or non-cash form, are also taxable income and must be reported separately. Digital asset transactions must also be reported using Form 8949, with capital gain or loss and tax reported on Schedule D or Form 709. Worldwide income of US citizens and resident aliens is subject to US income tax, even if earned from foreign sources, and must be reported. Taxpayers may qualify for tax benefits such as the Foreign Earned Income Exclusion or the Foreign Tax Credit, which reduce US tax liability. However, these tax benefits are only available if an eligible taxpayer files a US income tax return.
8 new members have joined the Taxpayer Advocacy Panel, which is working to improve IRS taxpayer services. It is looking for civic-minded volunteers to apply for the group's 2019 membership
The Internal Revenue Service (IRS) has added eight new members to its Taxpayer Advocacy Panel (TAP) for 2023, expanding the number of active volunteers to 63. The panel provides a platform for grassroots concerns to be raised to the IRS and works to improve taxpayer services in areas where the public interacts most frequently with the tax authority. Applicants are sought from all states to fill vacancies for 2024, and federal advisory committees must have a balanced representation of viewpoints, particularly among underrepresented groups such as Native Americans and non-tax professionals.
Connecticut Child Tax Credit testimony is heard by the finance committee
Connecticut lawmakers are considering a proposal to establish a permanent child tax credit in the state. The proposed bill seeks to help low and middle-income families cope with Connecticut’s high cost of living and inflationary pressures. The current bill proposes making Connecticut’s 2022 child tax rebate, which returned $250 per child for families earning less than $210,000 per year, a permanent tax credit. The American Rescue Plan temporarily increased the federal child tax credit to upwards of $3,600 per child. Supporters of the proposal argue that the child tax credit should be built into the tax filing system and not require applications in the future. Connecticut Comptroller Sean Scanlon has proposed a higher tax credit of $600 per child, which he describes as his “biggest passion”. However, with Governor Ned Lamont proposing an income tax reduction for families earning less than $150,000 and increasing the Earned Income Tax Credit, getting all the tax decreases and credits through will likely require a balancing act. While Connecticut has been enjoying budget surpluses the last several years, built on federal COVID dollars and increased income, sales, and business tax revenues, Republicans have been pushing for tax decreases in the face of budget surpluses to help alleviate inflation pressures on Connecticut residents.
