Detroit has announced it will become the largest municipality in the US to allow residents to pay taxes using cryptocurrencies when it rolls out a new PayPal-managed payment platform in 2025. The initiative hopes to spur technological innovation and foster economic growth—but may come with risks. The city’s leaders hope this strategy will modernize Detroit’s municipal services and improve the city’s financial inclusivity, particularly for unbanked residents. While Detroit’s plans are forward-thinking, they may come with more risks than rewards. The initiative brings with it numerous potential downsides, ranging from environmental concerns to dependence on third-party platforms, and high transaction…

The European Union’s “VAT in the Digital Age” (ViDA) reform package, approved by the ECOFIN Council on November 5, 2024, is set to bring major updates to the EU VAT system. For businesses outside the EU, ViDA’s impact will depend largely on their level of engagement within the EU market. Companies without supply chains or physical operations in the EU will see minimal impact. However, those involved in cross-border sales of goods or services or operating certain online platforms within the EU will face more extensive changes, requiring swift updates to their billing and accounting systems. ViDA reform package, introduced…

This is a published version of our weekly Forbes Tax Breaks newsletter. You can sign-up to get Tax Breaks in your inbox here. On a call last week, I suggested that we might not know the election results by the weekend–it turns out that I was wrong (mostly). The Associated Press projected just after 5:30 a.m. Wednesday that Donald Trump would return to the White House after winning Tuesday’s presidential race. And while there are still votes left to count, it’s clear that the Republicans have won the Senate (52 to 44 as of this writing) and likely the House…

The question of whether Bitcoin and other cryptocurrencies should be subject to capital gains taxation has been bandied about for years, but has found renewed interest since former President Trump won a second term. The typical argument for capital gains treatment being inappropriate for cryptocurrencies is an assumption, in contravention of current tax policy, that they are currencies—and that currencies are not subject to capital gains tax. This is partly true, but not for the reasons proponents think, as profits from currency exchanges are by default taxed as ordinary income under Internal Revenue Code (IRC) Section 988. This would mean…

What is an IRS audit?An IRS audit is an examination or review of your information and accounts to ensure you’re reporting things correctly, following the tax laws, and that your reported tax amount is correct. In other words, the IRS is simply double-checking your numbers to make sure you don’t have any discrepancies in your return.Sometimes state tax authorities do audits, too. If you’re telling the truth, and the whole truth, you needn’t worry. Nothing is inherently sinister about an IRS audit or state audit. However, people who are consciously cheating the system do have reason to be concerned.Why the…

State income tax rates receive relatively little attention compared with federal income taxes, but they can still put a large dent in your wallet. How large depends on the amount you earn, as well as where you live and work. Here’s how it works, and a list of state tax rates across the U.S.What is a state income tax?A state income tax is a tax on income earned in that state. It is similar to a federal income tax, but state income tax generally funds state budgets rather than the federal government. Some states have a progressive tax, while others…

In 2024 and 2025, there are seven federal income tax rates and brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Taxable income and filing status determine which federal tax rates apply to you and how much in taxes you’ll owe that year.The federal tax rates will remain the same through the end of 2025 as a result of the Tax Cuts and Jobs Act of 2017. However, the IRS can adjust income thresholds that inform those tax brackets each year to reflect the rate of inflation. 2024 tax brackets and income tax ratesThe 2024 tax brackets apply to income…

TaxAct is less well known among tax software providers, but it offers quality online software that generally costs less than TurboTax or H&R Block.It may not be as fancy in some ways, but you can add screen sharing access with a tax pro, and the data-entry process is similar to other providers. And TaxAct’s prices are competitive. Jump to: Full review.Generous tech support hours, including weekend help.Xpert Assist upgrade includes unlimited help and a final review of your return.Free version of the program charges for a state return.Full TaxAct reviewTaxAct’s pricesTaxAct’s products are generally less expensive than similar products from…

TurboTax is generally pricier than everything else out there. Confident filers may not need all the bells and whistles that most TurboTax online products offer, but some people may find the streamlined program and the availability of human help worth the extra cost. We’ve long praised TurboTax for its design and user experience. Jump to: Full review.Full TurboTax reviewHandy tools and features that help minimize manual input.Generous tax pro support that includes a final review if you upgrade.Expensive compared with other tax software.The free version is limited in what it can handle.TurboTax pricingTurboTax has a lot going for it, but…

If you need cash while waiting for your income tax refund, some tax preparation services — like Jackson Hewitt, H&R Block and TurboTax — offer tax refund loans.Tax refund loans, also called “refund advances,” let you access your refund early. The tax preparation company lends you money that is repaid with your tax return. Some loans are zero interest, while others include interest if you want the funds before 2024. Tax preparers typically require borrowers to file their taxes with them, which can come with a fee. In paying a tax preparer just to get the advance, you’re basically paying…