The value of Bitcoin and other cryptocurrencies has undoubtedly seen better days. But there’s a small silver lining — if you sold crypto at a loss in 2022, you might be able to save on your tax bill this year. What is the definition of cryptocurrency? Cryptocurrency differs from traditional currency, like the U.S. dollar, because it doesn’t have any intrinsic value. It is a decentralized currency, meaning it isn’t issued by an authority such as the government but instead distributed by a peer-to-peer network. This allows crypto investors to trade their coins almost instantly without relying on a payment processor as the middleman. Cryptocurrency generally exists on a blockchain platform — a shared public ledger that records crypto transactions. Its value is highly volatile and depends on various factors, like the supply and demand of a particular digital currency. How does the IRS define cryptocurrency? For tax purposes, the IRS defines cryptocurrency as a digital asset and tre...
Updated for tax year 2022 If you frequently drive your car for business purposes, you know how car expenses can quickly add up. And it’s not just the cost of gas, which fortunately has gone down from its high a few years ago. Every time you drive your car, you use oil, weaken your brake pads, clog up your air filter and wear down your tires – the list goes on and on. All of this wear and tear on your vehicle for business purposes ultimately requires more servicing, plus your car depreciates in value. You may even pay more in car insurance when you drive your car more miles. Fortunately, there is a silver lining. When it comes time to file your taxes, your car expenses can also help lower your tax bill if you can deduct them as a business expense. Here’s how to make sure you get the deductions you deserve. 1. Understand the standard mileage rate vs. actual expenses You can deduct your vehicle expenses in one of two ways. You can track all your car expenses, including gas, oil, ...
There are very few tax breaks available for low-income adults who don’t have children. Thankfully, some important changes were made to the Earned Income Tax Credit (EITC) last year, making this vital tax benefit available to many more Americans. Wondering if you might qualify to claim this fully refundable tax credit in 2021? Read on to find out! What is the Earned Income Tax Credit? The EITC is a refundable tax credit for individuals and families with low to moderate incomes. Beginning in tax year 2021, this credit has expanded to working adults age 19 or older (including seniors 65 and older), regardless of whether or not they have children. Previously, this tax credit was available to individuals aged 25-64 without dependents. The new rules for tax year 2021 allow more childless people to qualify for the credit. How much is the EITC? The Earned Income Credit amount was temporarily expanded for 2021, allowing qualified childless taxpayers to claim a credit of up to $1,502 on...
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