Everyday Law & Life

Do You Have to Pay Taxes on Cryptocurrency in the U.S.? IRS Rules Explained Cryptocurrency is exciting, volatile, and — yes — taxable. If you bought, sold, staked, or even received crypto as a gift, you might owe taxes to the IRS. Let’s break down when and how crypto is taxed in the United States. 💸 Is Crypto Considered Income or Property? The IRS classifies cryptocurrency as property , not currency. This means crypto transactions are generally subject to capital gains tax , not income tax — unless you're paid in crypto. 📊 Taxable Events You may owe taxes if you: Sell crypto for fiat (USD, etc.) Exchange one crypto for another Use crypto to buy goods or services Receive crypto as payment for work Earn rewards via staking or mining 📝 These events must be reported on IRS Form 8949 and Schedule D 🧮 How Is It Taxed? Short-term gains (held <1 year): taxed at ordinary income rate (10%–37%) Long-term gains (held >1 year): taxed at ca...

Who Qualifies as a Dependent on Your Tax Return in the U.S.? Claiming a dependent on your tax return can lead to major savings — including credits, deductions, and even lower tax brackets. But who actually qualifies? Let’s walk through the IRS rules and common scenarios to determine who you can legally claim as a dependent. 👶 Two Types of Dependents The IRS defines two main types: Qualifying Child Qualifying Relative Each has different rules. 🧒 1. Qualifying Child Requirements: Relationship : Your child, stepchild, sibling, or their descendant Age : Under 19 (or under 24 if a full-time student) Residency : Must live with you more than half the year Support : Cannot have provided more than half of their own support Joint return : Cannot file jointly with a spouse (unless only to claim refund) 👴 2. Qualifying Relative Requirements: Doesn’t have to live with you (if a listed relative) Gross income < $4,700 (2023 limit, adjusted annua...

Do U.S. Citizens Have to Report Foreign Bank Accounts? FBAR & FATCA Explained If you're a U.S. citizen with money in a foreign bank account, you might be wondering: Do I have to report it to the IRS? And what are the penalties if I don’t? The answer: Yes, and it can get serious. Let’s break down your responsibilities under FBAR and FATCA — and how to stay compliant. 💼 What Is FBAR? FBAR stands for Foreign Bank Account Report . If you have $10,000 or more (total across all foreign accounts) at any point during the year, you must file FinCEN Form 114 . Not filed with IRS — submitted to FinCEN Due by April 15 (automatic extension to October) 🌍 What Is FATCA? FATCA = Foreign Account Tax Compliance Act Requires reporting of foreign financial assets over certain thresholds Filed using IRS Form 8938 Thresholds vary: $50,000 (single, living in U.S.) $200,000 (married, living abroad) ⚠️ What Happens If You Don’t File? Penalties can ...

When Does Debt Expire in the U.S.? Understanding the Statute of Limitations If you’ve ever had an old debt come back to haunt you, you may have wondered: Can they still collect on this? Can I be sued? In the U.S., debt doesn't technically "expire," but the Statute of Limitations (SOL) determines how long a creditor can sue you. 🕒 What Is the Statute of Limitations on Debt? The statute of limitations is a legal time limit for a creditor to file a lawsuit to collect a debt. Once it expires, they can no longer legally sue you — but they can still try to collect. 📅 How Long Is the Time Limit? It depends on: The type of debt The state you live in Debt Type Typical SOL Range Credit card debt 3–6 years Personal loans 3–10 years Medical bills 3–6 years Auto loans 4–6 years Mortgage debt Up to 10 years 📍 Always check your state's laws — they vary widely. ⚠️ Important: The Clock Can Restart The SOL resets if you: ...

Top Tax Deductions for Self-Employed People in the U.S. If you’re self-employed, taxes can be a major headache — but they don’t have to be. The U.S. tax code offers a variety of deductions that can reduce your tax burden and help you keep more of your hard-earned money. Let’s break down the most valuable deductions for freelancers, gig workers, and small business owners. 💡 1. Home Office Deduction If you work from home, you may be able to deduct a portion of: Rent or mortgage interest Utilities Internet & phone Repairs and maintenance Must be exclusively and regularly used for business. 🚗 2. Vehicle and Mileage Expenses If you use your car for business: You can deduct mileage ($0.655/mile in 2023) Or actual expenses (gas, maintenance, depreciation) Keep detailed logs — the IRS is strict. 📱 3. Business-Related Technology Deduct: Laptops Phones Software subscriptions (Zoom, QuickBooks, Canva, etc.) If it’s used for your bu...

Is an HSA Really Worth It? Pros, Cons, and Tax Benefits Explained Health Savings Accounts (HSAs) are often praised as one of the best tax-advantaged tools available in the U.S. — but are they really worth it for everyone? Let’s take a deep look into how HSAs work, who can benefit the most, and the potential downsides you should know before opening one. 💼 What Is an HSA? An HSA (Health Savings Account) is a tax-advantaged savings account that allows you to set aside money pre-tax for qualified medical expenses. You can only contribute if you have a High-Deductible Health Plan (HDHP). ✅ Key Tax Benefits Tax-deductible contributions (Even if you don’t itemize deductions) Tax-free growth Earnings and interest grow without being taxed Tax-free withdrawals When used for qualified medical expenses 🔁 Known as a “triple tax advantage” 📊 2024 Contribution Limits $4,150 for individuals $8,300 for families +$1,000 catch-up for age 55+ 🔍 What Can ...

How Much Money Can You Give Your Child Without Paying Taxes in the U.S.? If you’re planning to give your child a large sum of money — for college, a house, or just a head start in life — you might be wondering: Will the IRS tax it? Let’s break down how gift taxes work in the U.S. and what you need to know to give wisely. 🎁 What Is the Gift Tax? The gift tax is a federal tax applied when one person gives money or property to another without receiving anything in return . But don’t panic — there are generous exemptions , and most people never end up paying this tax. ✅ Annual Gift Tax Exclusion (2024) You can give up to $18,000 per year per person without any tax or reporting . Married couples can combine their exclusions → $36,000 per child per year Applies to cash, checks, stocks, property, or other assets 📝 No IRS Form 709 required if you're under the limit. 💼 What If You Exceed the Limit? You don’t pay tax right away. Instead: You file IRS Form...