Bipartisan Passage and Intent In December of 2020, the U.S. Senate passed the Corporate Transparency Act (CTA) with a veto-proof majority. This bill was supported by the Trump White House and had earlier passed the House with strong majorities. This bill was bipartisan. President Trump signed the bill during his first term. The CTA was passed because the Treasury Department wanted more tools in place to fight money laundering. The Treasury Department believes that a lot of money laundering is done through shell companies. Shell companies are legal entities—generally an LLC or a corporation—which exist primarily on paper and have…

Suppose you’re in your forties, earning over $250,000 a year and dreaming of an early retirement, congratulations. In that case, you’re in a prime position to make strategic moves to supercharge your wealth and minimize your tax burden. This decade is all about maximizing your earnings, shielding assets from taxes and setting yourself up for a smooth glide into financial independence. Extra credit for also prioritizing your happiness and health along the way. Let’s dive into the nine steps that will make money more fun and your future more fabulous! 1. Max Out Retirement Accounts (And Beyond!) Your 401(k) and…

Well, folks, we did it. Or more accurately, they did it. Our nation’s Certified Public Accountants (and other tax return preparers)—those brave souls fluent in the ancient language of Schedule Cs and 1099s—have once again made it through tax season with their sanity mostly intact and only minimal crying in supply closets. Let us take a moment to thank these unsung heroes of April now that many of them have returned to their office following a two week vacation. While the rest of us were panicking over whether that dog-walking side hustle counted as self-employment (it does), CPAs were calmly…

In this episode of Tax Notes Talk, Tax Notes Capitol Hill reporters Cady Stanton and Katie Lobosco outline Congress’s progress on drafting the tax-focused reconciliation bill and the obstacles still remaining. Tax Notes Talk is a podcast produced by Tax Notes. This transcript has been edited for clarity. David D. Stewart: Welcome to the podcast. I’m David Stewart, editor in chief of Tax Notes Today International. This week: The bill is due. With many of the Tax Cuts and Jobs Act provisions scheduled to sunset at the end of 2025, all eyes have been on Congress’s progress toward a tax…

The tax treatment of legal settlements has spawned large volumes of tax cases, and most end up coming out in the IRS’s favor, so it pays to know what you are up against. If you make claims for emotional distress, your damages are taxable. But if you claim the defendant caused you to become physically sick, those damages can be tax free. On the other hand, if it was emotional distress that caused you to be physically sick, that is taxable. It seems highly artificial, but the order of events and how you describe them matters to the IRS. Compensation…

The Additional Child Tax Credit can provide taxpayers up to $1,700 per qualifying child in 2025 as a refundable credit. The ACTC not only reduces the amount of tax owed but can also result in a refund from the IRS if the credit exceeds the tax liability. Non-refundable credits can only reduce a taxpayer’s tax bill to zero. Refundable credits, like the ACTC, can generate a payment if the credit is greater than the amount of tax owed. For U.S. citizens and resident aliens living abroad, claiming the ACTC is complicated by Internal Revenue Code Section 911, which governs the…

When Congress extended the Victims of Terrorism Tax Relief Act of 2001 to include astronauts, they probably weren’t thinking of Katy Perry. In fact, it’s safe to say they imagined solemn, uniformed heroes, not pop stars in custom jumpsuits singing “What a Wonderful World” from the edge of the Earth’s atmosphere. Yet, here we are, in 2025: Katy Perry has gone to space, and the internet—and, somehow, the U.S. Tax Code—are not quite sure how to handle it. The Astronaut Tax Forgiveness After the September 11 attacks, Congress passed the Victims of Terrorism Tax Relief Act, which, among other things,…

President Donald Trump has continued to suggest tariffs could substantially reduce or take the place of income taxes. This time he has targeted Americans earning less than $200,000 per year for relief. If that sounds like political alchemy—turning economic policy lead into tax policy gold—that’s because it is. Tariffs Are Just Taxes in Disguise Setting aside the sheer logistical impossibility of financing the federal government through tariffs alone, it is unclear what exactly would be achieved. Even if we assume, against all empirical evidence, that the numbers pencil out—factories immediately booming, jobs multiplying, and tariff revenue flowing—it simply means the…

Product classification may sound like an obscure, back-office task that only concerns customs officials or tax accountants. But in reality, it is a cornerstone of tax and customs compliance for businesses of all shapes and sizes, whether they sell goods, services, or both. Accurate classification ensures that the right tax rates, duties, and exemptions are applied, helping companies avoid costly errors, audits, and penalties. When we think about product classification, we often picture long spreadsheets filled with codes like “HS 8471.30” or “HTSUS 0101.21.” These codes come from global systems such as the Harmonized System (HS) and its regional versions,…

Roundup weed killer has faced an avalanche of lawsuits from gardeners, farmers and homeowners who claim that their use of the product gave them cancer. Many lawsuits have gone to trial, and many have also been settled. The way taxes apply to Roundup and similar legal recoveries might surprise you. If a plaintiff is being awarded damages for a serious illness like cancer, how could the IRS consider it to be taxable income? Fortunately, the tax code is clear that compensatory damages for personal physical injuries or physical sickness are free of tax. This rule is embedded in section 104…