Tag Archives: taxes

US Treasury finalizes crypto rules to prevent tax evasion

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While people who own and sell cryptocurrency have always had to pay taxes on their earnings, a new rule finalized by the US Treasury Department can ensure that they're paying the proper amount on their sales. The new rule will require cryptocurrency platforms like exchanges and payment processors to report their users' transactions to the Internal Revenue Service. According to The Wall Street Journal, authorities are hoping that the measure can deter tax evasion, seeing as the IRS would know exactly how much a taxpayer owes. 

At the same time, the rule will make it much easier for people for declare their earnings because their brokers will now have to provide them with a 1099 form. The IRS released a draft form of 1099-DA (Digital Asset Proceeds From Broker Transaction) made especially to track crypto transactions last year and will make the final version available soon. To note, the rule sets a threshold of $10,000 to report on transactions involving stablecoin, which are cryptocurrencies that track fiat money like the US dollar. 

"[I]nvestors in digital assets and the IRS will have better access to the documentation they need to easily file and review tax returns,” Aviva Aron-Dine, the Treasury’s acting assistant secretary for tax policy, said in a statement. “By implementing the law’s reporting requirements, these final regulations will help taxpayers more easily pay taxes owed under current law, while reducing tax evasion by wealthy investors.”

The new rule will only apply to platforms that take possession of digital assets, such as Coinbase or Binance. It doesn't cover decentralized ones, which will have to comply with a separate rule that's expected to be finalized later this year. Brokers will have to start reporting sales proceeds on digital assets in 2026 for all transactions accomplished in 2025, which means crypto traders are still on their own for 2024. 

This article originally appeared on Engadget at https://www.engadget.com/us-treasury-finalizes-crypto-rules-to-prevent-tax-evasion-143051676.html?src=rss

The IRS is making its free Turbo Tax alternative permanent

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The United States notoriously makes tax filing stressful and expensive thanks to greed, the tax lobby and the idea that basically nothing should be free (fun stuff!). However, there's a little glimmer of hope, as the IRS is making Direct File, its free digital tool announced in late 2023, permanent. According to the US Department of the Treasury, a Direct File pilot program saved 140,000 individuals an estimated $5.6 million in filing costs for the 2024 tax session. 

Not only is the program here to stay (with the current government, at least), but its access is expanding. Taxpayers in 12 states could use Direct File this year, but the tool will be available in all 50 states and Washington DC starting with the 2025 filing season. The Treasury reports that Direct File users approved of the tool, with 90 percent of the 11,000 taxpayers surveyed rating the system "excellent" or "above average."  

Right now, the free TurboTax alternative only works for taxpayers with simple filings like a W-2 or standard deduction. However, the Treasury plans to "expand the reach and tax scope" it offers in the coming years. Despite this expansion, it will be up to states whether they want to participate in the program. 

This article originally appeared on Engadget at https://www.engadget.com/the-irs-is-making-its-free-turbo-tax-alternative-permanent-142055378.html?src=rss

The IRS is making its free Turbo Tax alternative permanent

Posted on by

The United States notoriously makes tax filing stressful and expensive thanks to greed, the tax lobby and the idea that basically nothing should be free (fun stuff!). However, there's a little glimmer of hope, as the IRS is making Direct File, its free digital tool announced in late 2023, permanent. According to the US Department of the Treasury, a Direct File pilot program saved 140,000 individuals an estimated $5.6 million in filing costs for the 2024 tax session. 

Not only is the program here to stay (with the current government, at least), but its access is expanding. Taxpayers in 12 states could use Direct File this year, but the tool will be available in all 50 states and Washington DC starting with the 2025 filing season. The Treasury reports that Direct File users approved of the tool, with 90 percent of the 11,000 taxpayers surveyed rating the system "excellent" or "above average."  

Right now, the free TurboTax alternative only works for taxpayers with simple filings like a W-2 or standard deduction. However, the Treasury plans to "expand the reach and tax scope" it offers in the coming years. Despite this expansion, it will be up to states whether they want to participate in the program. 

This article originally appeared on Engadget at https://www.engadget.com/the-irs-is-making-its-free-turbo-tax-alternative-permanent-142055378.html?src=rss

You can try the IRS alternative to Turbo Tax in 12 states today

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April is just around the corner, so if you're not stressed about filing taxes yet, it's likely coming any day now. Thanks to the lovely (read: horrible) tax lobby and the politicians who take their money, the headache taxes bring is as American as apple pie. The IRS is attempting to simplify things a bit with a Direct File tool, a free digital program that provides step-by-step guidance for taxpayers submitting their returns, The Associated Press reports. The IRS first announced this tool was on its way back in October.

To clarify, yes, even this development still requires filing your taxes and determining how much you owe (why tell us when we can just guess?), but it should be a more straightforward process and save you some money. However, it's far from open for all. The IRS pilot program is available to residents of 12 states and only those with a simple tax situation — we're talking basic W-2s and standard deductions here. Other potentially eligible reporting includes SSA-1099 Social Security income, the Child Tax Credit and student loan interest. The IRS has a complete list of eligibility requirements and a tool to check if you qualify.

Direct File is available to residents of Florida, Nevada, New Hampshire, South Dakota, Texas, Wyoming, Washington, Arizona, California, Massachusetts, and New York. The last four also require state tax returns, so their residents who use Direct File will be directed to tools for filing those once they are finished. Alaska was initially in the mix but has seemingly been dropped since last year's statement.

This article originally appeared on Engadget at https://www.engadget.com/you-can-try-the-irs-alternative-to-turbo-tax-in-12-states-today-125757658.html?src=rss