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How are clergy wages reported to the IRS and taxed on your return?
Contributed by: PhillipB, FreeTaxUSA Agent, Tax Pro The income, Social Security, and Medicare tax situation for members of the clergy is very different from the tax situation of average employees. Members of the clergy have the following major differences: Clergy wages are exempt from Social Security and Medicare tax…
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What is an employee stock ownership plan (ESOP)?
Contributed by KeriC, FreeTaxUSA Agent, Tax Pro An Employee Stock Ownership Plan, or ESOP, allows employees to own stock in the company without having to purchase shares. The company contributes its stock (or money to buy stock) into an ESOP trust, which holds the shares for employees. This is done over time, allowing…
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Can I write off a loan that didn’t get paid back?
Contributed by: KristineS, FreeTaxUSA Agent, Tax Pro If you loaned money to a friend, family member, or other personal acquaintance with the understanding they’d pay it back, and then they didn’t, you likely have a non-business bad debt. While this might affect the relationship in a bad way, it might also affect your tax…
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Reporting Employee Stock Options
Contributed by KeriC, FreeTaxUSA, Tax Pro Employee stock options and employee stock purchase plans (ESPP) can be used by employers as a form of compensation or as a benefit. Stock options and ESPPs can involve giving highly valued employees a certain amount of stock after a specified period of time at little to no cost or…
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What is a wash sale on Form 1099-B and how do I report it?
Contributed by: Henry, FreeTaxUSA Agent, Tax Pro If you sell capital assets (such as stocks and bonds), then you should receive Form 1099-B at the end of the year from your brokerage. This form reports the sales proceeds and may include a “wash sale loss disallowed” amount: Let’s look at what that means and how it needs to…
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How to enter a 1099-S from the sale of an inherited home
Contributed by: Henry FreeTaxUSA Agent, Tax Pro The sale of an inherited home is a significant event that comes with its own set of tax implications and requirements. Understanding how to correctly enter Form 1099-S from a sale is crucial for accurate tax reporting and compliance. Information required to report the sale…
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Reporting crypto currency transactions
If you buy and sell cryptocurrency as an investment, you’ll likely have capital gains or losses that need to be reported on your tax return. FreeTaxUSA will help you with your reporting requirements. Before you begin, make sure you have all your transactions and/or statements at hand. This may be from a crypto tax service…
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Why is my Social Security being taxed?
Contributed by KeriC, FreeTaxUSA Agent, Tax Pro Are you age 67 and ready to start drawing Social Security income? Perhaps you’re at least 62 and ready to start receiving income now. Regardless of your age, there’s one important fact that you should know about Social Security benefits and taxes. Every year the IRS reminds…
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What are the tax implications of changing jobs?
Contributed by: CoryF, FreeTaxUSA Agent, Tax Pro Congratulations on Your New Job! As you change jobs, understanding the tax implications will help you avoid some common tax mishaps. Make sure that you know how to handle the following tax items with your employer: Properly completing your W-4 Receiving tax forms Taking full…
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What does the number or letter in Box 7 of my Form 1099-R mean?
Box 7 is the distribution code that identifies the type of distribution received. The following are the codes and their definitions: 1 - Early distribution, no known exception (in most cases under age 59 1/2) 2 - Early distribution, exception applies (under age 59 1/2) 3 - Disability 4 - Death 5 - Prohibited transaction 6…