You got a letter from the IRS — what should you do? Open it and read it carefully; don’t toss it or panic. Most IRS letters and notices concern a specific issue on your federal tax return or account — a correction, a balance due, a request for more information, or a credit question —…
What is the 4% rule, and how do taxes change the picture? The 4% rule is a widely cited retirement rule of thumb: withdraw 4% of your savings in your first year of retirement, then adjust that dollar amount for inflation each year, aiming to make a portfolio last about 30 years. It’s popular because…
Is the Social Security Direct Express card changing — and do you need to do anything? Yes, for one group. The Social Security Administration (SSA) is switching the financial agent that runs its Direct Express prepaid debit card program from Comerica Bank to Fifth Third Bank, following a merger of the two institutions. This affects…
How is income from the 2026 FIFA World Cup taxed across the U.S., Canada, and Mexico? The 2026 FIFA World Cup is co-hosted by three countries, which raises a thorny question: when a national team earns prize money and other compensation, how is that income sourced among the United States, Canada, and Mexico? To avoid…
What federal tax developments landed in early June 2026? Three Treasury/IRS regulatory proposals and a busy week on Capitol Hill. On the regulatory side: (1) proposed regulations under §892 (CC-00349656-26, IR-2026-69) giving sovereign investors transition relief and new applicability dates tied to the December 2025 proposed rules; (2) proposed regulations (REG-103193-26) raising the estate tax…
What is California’s PTE elective tax, and what changed for 2026? The pass-through entity (PTE) elective tax lets a qualifying partnership or S corporation elect to pay a 9.3% entity-level California tax on its owners’ shares of income — and the owners then claim a personal income tax credit for the tax paid on their…
Can you use 401(k) money to pay long-term care insurance premiums without the 10% penalty? Yes — within limits. Under SECURE 2.0 Act §334 (effective for distributions after December 29, 2025), a defined contribution plan may permit “qualified long-term care distributions” under new IRC §401(a)(39). The annual cap is the LEAST of: (1) the amount…
How does FASB ASU 2026-01 change the accounting for PIK dividends on preferred stock? In April 2026, the FASB issued Accounting Standards Update No. 2026-01, Equity (Topic 505): Initial Measurement of Paid-in-Kind Dividends on Equity-Classified Preferred Stock. It fills a gap in U.S. GAAP that had produced diversity in practice. The new rule: an issuer…
What is the California LLC fee, and how do you avoid the 10% penalty? Separate from the $800 annual minimum franchise tax, California imposes a second, income-based “LLC fee” (Revenue & Taxation Code §17942) on every LLC organized, doing business, or registered in California with total California-source income of at least $250,000. The fee is…
Is your side activity a business or a hobby — and why does it matter to the IRS? Under Internal Revenue Code §183 (the “hobby loss” rule), if an activity is NOT engaged in for profit, you cannot deduct its losses against your other income. A real business reports on Schedule C and can deduct…
