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The Internal Revenue Service said Tuesday it is giving special relief to support leave-based donation programs as a way of assisting victims of Hurricane Harvey.   The programs are similar to ones offered by the IRS in the aftermath of Hurricane Katrina in 2005, Hurricane Sandy in 2012, the Ebola outbreak in West Africa in 2014, and Hurricane Matthew and severe flooding in Louisiana in 2016.   Under such...

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What is 'Schedule K-1'?   Schedule K-1 is a tax document used to report the incomes, losses and dividends of a partnership. The Schedule K-1 document is prepared for each individual partner and is included with the partner’s personal tax return. An S corporation reports activity on Form 1120S, while a partnership reports transactions on Form 1065.     BREAKING DOWN 'Schedule K-1'   While not filed with an individual partner’s tax...

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If the Trump administration's America First budget plan for 2018 ever gets approved as proposed, anyone claiming the Earned Income Tax Credit (EITC) or the Child Tax Credit (CTC) would face a new requirement: They must have a Social Security number and be legally authorized to work in the U.S.   Critics howl that this would deny refundable tax credits to low-income immigrants.   But U.S. citizens and legally...

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The Internal Revenue Service has many free products available for small businesses to help them understand and comply with the law. Products ranging from online calculators, printable calendars, step-by-step guides and a series of educational webinars are all available on IRS.gov.   Federal law requires most employers to withhold federal taxes from their employees' wages. IRS tools can help small businesses understand some of the requirements for withholding, reporting,...

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The IRS is warning a new set of Individual Taxpayer Identification Number holders that their numbers are set to expire at the end of 2017, and that they’ll need to renew them before they next file a return.   In the second year of the renewal program, the IRS has made changes to make the process smoother for taxpayers. The renewal process for 2018 is beginning now,...

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A proposal to gut California’s tax collection agency sits on Gov. Jerry Brown’s desk, but the state is already moving forward with parts of the overhaul, which would shift 90 percent of the agency’s responsibilities to two new state departments.   The drastic changes to the state Board of Equalization coincide with a state Department of Justice criminal investigation into allegations board members may have misused public...

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The IRS’s first-time abatement penalty waiver (FTA), although introduced 12 years ago, is infrequently used by qualifying taxpayers. An FTA can be obtained for a failure-to-file, failure-to-pay, or failure-to-deposit penalty.   A taxpayer may claim an FTA for only a single tax period. To qualify, taxpayers must not have been assessed any other penalties of a “significant amount” on the same type of tax return within the...

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If you have some type of IRA, the financial institution acting as custodian or trustee must give you – and the IRS – an information return each year. The form, called IRS Form 5498, IRA Contribution Information, resembles Form W-2 for reporting wages. It contains information about IRA contributions, rollovers, Roth IRA conversions and required minimum distributions (RMDs).     The Basics   Reporting applies for traditional IRAs; it also...

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Partnerships do not pay tax on their profits; their partners do. Partnerships are pass-through entities that report their income, deductions, credits and other items to partners so that partners can then enter their share of this information on their personal tax returns. The partnership, as well as an entity treated as a partnership for federal income tax purposes, uses Form 1065, U.S. Return of Partnership...

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