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Client Update Newsletter: April 2024

If it seems like our tax code is complicated and confusing, well, it’s sort of true.

And Congress keeps adding to this complexity with what seems like an ever-growing list of what is and is not taxable. With the April filing deadline right around the corner, this month’s newsletter has a fun quiz to test your knowledge about what our tax code says is subject to income taxes.

There are also some great tips to help keep your plethora of passwords under control, ideas to help steer clear of common household accidents, and digital skills for today’s kids.

As always, feel free to pass this information on to anyone that may find it useful and call if you have any questions or concerns.


Annual Tax Quiz - Is It Taxable?

Annual Tax Quiz Is It Taxable imageThe IRS seems to always have a surprise up its sleeve for the unsuspecting taxpayer. Here's a fun True or False quiz to test your knowledge of what's taxable. Enjoy!

  • If a thief steals someone’s property, he owes tax on the value of the stolen property.
  • True. But don't expect the person whose property was stolen to issue a Form 1099. Tax instructions tell you to list this as stolen property on your tax return. This part of the tax code is what famously put gangster Al Capone behind bars.
  • Scholarships are never taxable.
  • False. If you get scholarship money to cover tuition, fees and books, you pay no taxes. But if your scholarship also covers room and board, travel and other expenses, that portion of the award is taxable. Students who get financial aid in exchange for work must also pay tax on that money even if they use it to pay tuition.
  • Minor gambling winnings are not taxable.
  • False. When lady luck smiles on you, the tax collector typically doesn’t. While virtually all gambling winnings are deemed taxable income, not all winnings are reported to the IRS. The IRS requires reporting of winnings at various thresholds depending on the game: $1,200 or more from bingo or slot machines, or more than $5,000, minus the wager, from a poker tournament. If reported, the payer will issue you a Form W-2G and report what you won to the IRS. The practical nature of keeping track of and claiming this minor income is a different matter entirely.
  • If you lose your job and start collecting unemployment benefits, the IRS will cut you a tax break.
  • False. The IRS considers unemployment income to be a replacement for your regular income, and is therefore taxable. (During the pandemic, the IRS was legislated to make this unemployment tax-free, but this was only for a limited time.) The good news is that not all states do the same.
  • If someone forgives an amount of money that you owe them, you typically have to pay taxes on that amount.
  • True. Debt cancelled or otherwise discharged for less than what you owe – credit cards, mortgages, loans and so on – is generally taxable income per the IRS. Exceptions can include student loans, debts discharged in bankruptcy, or amounts in specific mortgage foreclosures as defined in a special tax law. The creditor may send you a federal Form 1099-C in the amount of the cancelled debt, which means the money also gets reported to IRS.
  • An agreement between two small businesses to get free hair cuts in exchange for mowing a lawn is not taxable.
  • False. When you exchange services in lieu of cash in a formal arrangement, the fair market value of the goods and services are fully taxable. You should get an IRS Form 1099-B or the like showing the value of cash, property, services, credits or other items that you received from the barter. On the positive side, any expenses you incurred to hold up your end of a deal are typically deductible as a business expense.

Password Madness: Tips to Keep Your Growing List Under Control

Password Madness Tips to Keep Your Growing List Under Control imageWhen it comes to keeping your online accounts safe, strong passwords that nobody can guess are an essential tool. Many struggle, though, with password fatigue because you need to have a password for…well, everything. And then you need to change these passwords every several months!

While most of us understand the need for strong passwords to protect our confidential information, it doesn't make password madness any easier to handle. Here are some tips to try and make your password process a little bit less stressful.

Use these steps to make your password madness easier to handle and your online accounts safer from online thieves.

Tips to Help Steer Clear of Common Household Accidents

When it comes to avoiding household accidents, an ounce of prevention is often worth a pound of cure. Fortunately, just knowing about some of the most common household perils is a solid first step to avoiding them completely.

Here's a look at several of the most common accidents that occur at home and several tips to prevent these scenarios before they occur.

Tips to Help Steer Clear of Common Household Accidents imageHousehold Accident #1: Slips and Falls

Accidental falls are the most common type of accident for Americans at home, according to the National Library of Medicine at the National Center for Biotechnology Information. The Center also says that many falls are associated with age and overcrowding. In other words, older individuals are most likely to fall and hurt themselves, while improper housing design and accessibility also played a role.

Prevention Tip: With many accidental falls happening during the evening and early morning hours according to the National Library of Medicine, consider the installation of lightning in and around the higher-risk areas of your home, like stairways and halls. Also consider removing tripping hazards such as area rugs and other clutter in heavy traffic areas.

Household Accident #2: Cuts

Accidental cuts are also common in the home, with many taking place during food preparation. Improper use of knives and the use of dull knives that don't work properly are some of the biggest contributing factors.

Prevention Tip: Avoid cuts during food preparation by keeping knives sharp and storing them in a cutting block when not in use. Always use a cutting board, and never walk around with a knife in your hand. When giving a knife to someone, agree to a key word before letting go of the knife. A common one is say thank you when you have received the knife. Also review kitchen prep videos for safe hints in cutting food.

Household Accident #3: Poisoning

Poisoning is the leading cause of accidental deaths at home, according to the National Safety Council (NSC). While adults can accidentally ingest dangerous substances, children are especially at risk if they have access to unlocked cabinets and drawers.

Prevention Tip: Keep cabinets that contain harmful chemicals, and both prescription and non-prescription drugs, secure with a lock and key. Also install smoke and carbon monoxide detectors, and test them once a month. And poisons related to fire can be managed by having an escape plan. Visit for more fire safety tips.

Household Accident #4: Drowning

Among children under the age of 15, drowning is the second leading cause of preventable death according to the NSC. The Centers for Disease Control also reports that 4,000 drowning deaths take place within American homes every year, and that more children ages 1 to 4 die from drowning than from any other cause.

Prevention Tip: Always supervise children and others who cannot swim when near bodies of water. Also consider building fences that fully enclose pools. Other preventative tips include the use of a life jacket, learning CPR, and avoiding alcohol before and during time spent in the water. Also remember that children can drown in as little as one inch of water, often happening quickly and silently. So use the buddy system when around water and never leave the little ones in a bath tub without an adult present.

You can prevent many home accidents and injuries by staying vigilant and being knowledgeable about the risks that exist.

Digital Skills for Today's Kids

Digital Skills for Todays Kids imageThe digital revolution is changing the way we think about necessary skills. Being so interconnected digitally, navigating technology, and understanding the basics about how it’s built and how it’s intended to be used is more important than ever for the next generation.

Here are several of the top tech skills for kids to consider learning that will help them thrive both now as students and in the future when they enter the workforce.

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