The tax implications of being a winner
- ByPolk & Associates
- Aug, 08, 2019
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If you’re lucky enough to be a winner at gambling or the lottery, congratulations! But be aware there are tax consequences. You must report 100% of your winnings as taxable income. If you itemize deductions, you can deduct losses but only up to the amount of winnings. You report lottery winnings as income in the year you actually receive them. In the case of noncash prizes (such as a car), this would be the year the prize is received. With cash, if you take the winnings in annual installments, you only report each year’s installment as income for that year. These are just the basic rules. Contact us with questions. We can help you minimize taxes and stay in compliance with all requirements.
The IRS is targeting business transactions in bitcoin and other virtual currencies
- ByPolk & Associates
- Aug, 08, 2019
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More businesses are accepting bitcoin and other virtual currency payments, and the IRS is taking notice. The agency just announced it is sending letters to taxpayers who potentially failed to report income and pay tax on virtual currency transactions or didn’t report them properly. The letters urge taxpayers to review their tax filings and, if appropriate, amend past returns to pay back taxes, interest and penalties. By the end of August, more than 10,000 taxpayers will receive these letters. The names of the taxpayers were obtained through IRS compliance efforts. Contact us if you have questions about virtual currency or if you receive a letter from the IRS about possible noncompliance.