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What is tip income and can I deduct it?
Contributed by: AndyS, FreeTaxUSA Agent, Tax Pro The One Big Beautiful Bill Act (OBBBA) introduced a potentially valuable tax break: eligible taxpayers can now deduct up to $25,000 in qualifying tip income. But there’s a catch—not every tip counts, and the rules come with a few important limitations. So, how can you…
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What if I forgot to take a Required Minimum Distribution (RMD)?
Contributed by: Henry, FreeTaxUSA Agent, Tax Pro Did you miss an RMD? Maybe you overlooked the deadline, misunderstood the rules, or changed custodians. There are several common reasons why you might take too little or miss a required distribution altogether. If this applies to you, you’ll want to act quickly to correct…
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Figuring step-up basis for jointly owned home sales
Contributed by: BreeS, FreeTaxUSA Agent Selling a home after the death of a co-owner can raise important tax questions. Is the gain taxable, and if so, how much? Generally, the gain from a sale is calculated by subtracting the cost basis from the sales price. This Community article discusses how basis gets a step-up for…
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What happens if I contribute too much to my 401(k)?
Contributed by: WrenD, FreeTaxUSA Agent, Tax Pro A 401(k) retirement plan is a common way to save for retirement and enjoy tax benefits. However, contributing too much can create unforeseen tax issues. This article explains what happens if you overcontribute to a 401(k), how it affects your taxes, and what you can do to…
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How do capital gains and losses affect my tax return?
Contributed by: TriciaD, FreeTaxUSA Agent, Tax Pro Capital gains and losses play a significant role in determining your tax liability. Whether you’re selling stocks, real estate, or other investment assets, understanding how these transactions are taxed can help you plan smarter and potentially reduce your tax bill. We’ll…
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What is income in respect of the decedent, and how is it reported?
Contributed by: PhillipB, FreeTaxUSA Agent, Tax Pro When a loved one passes away, there’s a lot to manage — including figuring out which tax returns need to be filed. FreeTaxUSA only handles Form 1040, which covers the final tax return for the decedent as well as any individual tax returns for beneficiaries. However, it’s…
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How is FMLA income reported?
Contributed by: AnthonyS, FreeTaxUSA Agent, Tax Pro Are you wondering how to report the income you received while taking time off under the Family and Medical Leave Act (FMLA)? The way this income is reported depends on where it comes from and how it’s paid. Example Alex took parental leave after having a baby. Some of the…
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What is the Rule of 55?
Contributed by: AndyS, FreeTaxUSA Agent, Tax Pro You may have heard that if you take out your retirement money before you turn 59 ½, you must pay a 10% penalty. But did you know there's a special rule called the Rule of 55 (see Separation from service) that lets you get your retirement money a bit earlier without the 10%…
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How do I report a loss from a cryptocurrency scam?
Contributed by: LynR, FreeTaxUSA Agent, Tax Pro Cryptocurrency is an exciting and relatively new investment platform. As with all investments, there are risks, including potential for scams and fraudulent activities and you may become the victim of a cryptocurrency scam. Generally, a financial loss can be a tax deduction,…
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How do I report cryptocurrency losses from bankrupt exchanges or worthless coin?
Contributed by: LynR, FreeTaxUSA Agent, Tax Pro As the usage of cryptocurrency and other digital assets continues to grow, the IRS is continually issuing guidance on reporting transactions along with gains and losses from these transactions. Unfortunately, some cryptocurrencies or exchanges fail or go bankrupt leaving a…