Common Tax Questions
During tax season, there are a number of areas that generate questions. Here are five of the most common and their answers. But like most things, there can be exceptions, so if in doubt always ask for help.
During tax season, there are a number of areas that generate questions. Here are five of the most common and their answers. But like most things, there can be exceptions, so if in doubt always ask for help.- Are my miles earned on my credit card taxable? Taxation of any extras you earn with a credit card – including miles, discounts, even cash back – are not taxable if you had to pay to get them. Other rewards that you receive, for example a reward for signing up for a card or for referring a new cardholder, are considered taxable income per the IRS.
- Does my employer contribution count towards the 401(k) limit? Your employer’s matching contributions do not count toward your maximum contribution limit, which for this year is $22,500. If you’re 50 or older, you can sock away an additional $7,500 (for a total of $30,000) this year.
- What happens to loans from my retirement account if I change jobs? When you switch jobs, you must pay back any loans borrowed from your employer-sponsored retirement account within a short amount of time. If the loan isn’t paid back, the outstanding balance is considered a distribution that is subject to income taxes and an early withdrawal penalty.
- Do I really need to report gifts given to people? Yes, but only if you give more than $17,000 ($34,000 if married) in 2023 to any one person. It must be reported to the IRS on a gift tax return. That’s because the IRS keeps track of gifts you’re allowed to make over the course of your lifetime, which in 2023 is $12,920,000 ($25,840,000 if married). Only after reaching this lifetime dollar amount will you need to actually make a gift tax payment.
- Do I have to report a loss? You may think the IRS isn’t interested in losses you incur, such as when you sell a stock at a loss or if your business loses money. The reality is that you should always report losses on your tax return because you can use them to offset income under certain conditions. In addition, most losses can be carried forward to future years to offset income.
Have your own question? Reach out. The answer could surprise you.
Rabalais Business Consulting is Acadiana’s Small Business Survival Specialists firm based in Lafayette, LA, offering specialized business and accounting services to small businesses in the traditional sector.
Our team of highly trained professionals possesses the expertise and experience to provide clients with a comprehensive range of services, including accounting, tax planning and preparation, financial planning, business consulting, and more.
At Rabalais Business Consulting, our primary objective is to help businesses achieve their financial goals by optimizing their financial performance, minimizing their tax liabilities, and protecting their hard-earned wealth. We achieve this by working collaboratively with our clients to develop customized solutions that align with their unique business objectives.
Our approach to business consulting is tailored to the specific needs of each client. We believe that every business is unique, and therefore requires a customized strategy to achieve its goals. We take the time to get to know our clients and their businesses, so that we can identify opportunities for growth, mitigate risks, and develop strategies to optimize their financial performance.
Our team of professionals possess a wealth of knowledge and experience in a variety of industries. We are committed to staying up-to-date with the latest industry trends and regulations, so that we can provide our clients with the most relevant and effective advice and solutions.
At Rabalais Business Consulting, we are passionate about helping our clients achieve their financial objectives. Whether you are a small business owner looking to minimize your tax liabilities or a company seeking to optimize your financial performance, we are here to help.
Thank you for considering Rabalais Business Consulting for your business needs. We look forward to the opportunity to work with you and help your business achieve its full potential.
Rabalais Business Consulting is conveniently located at 209 Rue Louis XIV, Lafayette, LA 70508. Please call us to make an appointment at (337) 981-2579.
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