Jane F Smith CPA

06/02/2026

Is that activity just a hobby or a business?

Many people have hobbies - things they enjoy doing in their spare time - and some even make a little extra money from them. However, there’s a difference between a hobby and a business, especially how each is treated when it comes to filing taxes.
Businesses operate to make a profit while hobbies are for pleasure or recreation. Here are some common questions people should ask themselves when deciding if what they’re doing is a hobby or business. No single thing is the deciding factor.

Questions to help taxpayers decide if they have a hobby or business

Is there an intent to make a profit?
If the activity makes a profit, how much is it?
Can they expect to make a future profit from the appreciation of the assets used in the activity?

Do they depend on income from the activity for their livelihood?
Are any losses due to circumstances beyond their control or are the losses normal for the startup phase of their type of business?
Are operations adjusted to improve profitability?

Is the activity carried out like a business with complete and accurate books and records kept?

Do the taxpayers and their advisors have the knowledge needed to carry out the activity as a successful business?

Taxpayers should review all the factors to make the best decision. Regardless of the decision, if they’re paid through payment apps for goods and services during the year, they may receive an IRS Form 1099-K for those transactions. These payments are taxable income and must be reported on federal tax returns.

Additionally, if they received payment in the form of digital assets, they may also get a Form 1099-DA. Whether taxpayers have a hobby or run a business, good recordkeeping throughout the year will help when they file taxes.

06/01/2026

Taxpayers can now view and submit Trump Account elections in their IRS Individual Account
IR-2026-68, May 28, 2026

WASHINGTON — The Internal Revenue Service today announced new features in IRS Individual Accounts that allow taxpayers to view and submit Trump Account elections, making it easier to invest in these tax-advantaged accounts.

Through IRS Individual Account, taxpayers can securely access their tax information and complete common tasks online, including:

View the latest submission status of their Form 4547, Trump Account Election(s), including next steps.
Submit Form 4547, Trump Account Election(s), electronically.
“These new features reflect our continued focus on transforming the IRS into a digital-first agency that delivers a faster, more seamless experience for taxpayers and provides a new tax-advantaged investment account for children to save for college, retirement, and building generational wealth,” said IRS Chief Executive Officer Frank J. Bisignano. “By expanding the IRS Individual Account to include this new status, we are providing taxpayers with this tool in addition to features for managing their tax accounts, tracking important transactions, and completing key actions quickly and securely.”

Taxpayers benefit from greater transparency through real-time visibility into the Trump Account election process. Electronic submissions also improve accuracy, speed up processing times, and reduce delays associated with paper forms.

Trump Account election
Through the One, Big, Beautiful Bill, enacted on July 4, 2025, Trump Accounts allow parents, guardians, and other authorized individuals to establish a new type of individual retirement account for their children.

An account can be established for a child who has not reached age 18 by the end of the calendar year in which the election is made and who has a valid Social Security number.

A one-time $1,000 pilot program contribution from the Department of the Treasury is available for eligible children born between Jan. 1, 2025, and Dec. 31, 2028, who are U.S. citizens with a valid Social Security number. The IRS continues to provide updates and additional information about the tax benefits under the One, Big, Beautiful Bill. For details, see One, Big, Beautiful Bill Provisions on IRS.gov.

05/28/2026

IRS to offer Saturday hours at Taxpayer Assistance Centers May 30

IR-2026-67, May 27, 2026

WASHINGTON — The Internal Revenue Service today announced it will offer Saturday hours at select Taxpayer Assistance Centers on May 30.

TACs will be open from 9 a.m. to 4 p.m. to provide in-person assistance on a range of tax issues.

During this one-day event, TACs in multiple states, the District of Columbia, and Puerto Rico will offer many of their regular services. The IRS encourages taxpayers to visit IRS.gov/SaturdayHours ahead of time to confirm participating locations and available services before heading to an office.

TACs will offer most of their typical services during these hours. However, they will not accept cash payments. The IRS plans to continue offering these Saturday service opportunities through June.

The IRS Taxpayer Assistance Center (TAC) hosts special Saturday help events. Check back frequently for updated information on event dates and locations. Availability can change without notice.

05/21/2026

Homeowners should review any tax benefits for homeownership

The year is nearly half over which makes it a good time to remind homeowners and future homeowners to review their eligibility for any tax deductions, programs and housing allowances. If eligible, these tax benefits could help with some of the common costs of being a homeowner.

Deductible house-related expenses
Taxpayers must itemize their deductions to deduct homeownership expenses. Most home buyers take out a mortgage to buy their home, and their mortgage lender may bundle other home-related costs.
The costs the homeowner can deduct are:

State and local real estate taxes, subject to a $40,000 limit or $20,000 if married filing separately
Home mortgage interest, within the allowed limits
Homeowners can't deduct any of the following items:

Insurance including fire and comprehensive coverage and title insurance
The amount applied to reduce the principal of the mortgage
Wages paid to domestic help
Depreciation
The cost of utilities, such as gas, electricity or water
Most settlement or closing costs
Forfeited deposits, down payments or earnest money
Internet or Wi-Fi system or service
Homeowners’ association fees, condominium association fees or common charges
Home repairs

Mortgage Interest Credit
The Mortgage Interest Credit helps people with lower income afford homeownership. Those who qualify can claim the credit each year for part of the home mortgage interest paid. A homeowner may be eligible for the credit if they were issued a qualified Mortgage Credit Certificate from their state or local government.

Ministers and military housing allowance
Ministers and members of the uniformed services who receive a nontaxable housing allowance can still deduct their real estate taxes and home mortgage interest. They don't have to reduce their deductions based on the allowance.

05/15/2026

Eligible taxpayers may be able to resolve tax debt through an offer in compromise

There are options available to taxpayers if they can’t pay their tax debt in full or if doing so would cause financial hardship. One of them is called an offer in compromise. Factors such as income, expenses, asset equity and ability to pay are considered when a taxpayer applies for this option.

What’s an offer in compromise
This is an agreement between a taxpayer and the IRS that settles a tax debt for less than the full amount owed.

The goal is a compromise that's in the best interest of both the taxpayer and the IRS. The OIC application requires a fee of $205 and an initial payment. Qualifying low-income taxpayers don't have to pay either the fee or the initial payment. Taxpayers should review the instructions for Form 656-B, Offer in Compromise, to see if they meet the qualifications to have these initial costs waived.

Who’s eligible
Taxpayers can use the Offer in Compromise Pre-Qualifier Tool to check their eligibility to file an OIC and prepare a preliminary proposal. Individual taxpayers can make OIC payments online through their Individual Online Account. Eligible taxpayers who use Business Tax Account can now make their OIC payments through BTA. However, they can’t apply or submit an offer through BTA.

Review the Offer in Compromise Booklet
Eligible taxpayers should download and review the latest version of the OIC Booklet to avoid processing delays. This booklet covers everything a taxpayer needs to know about submitting an OIC including:

Eligibility
Costs to apply
Application process
Forms
Beware of “OIC mills”
“OIC mills” are aggressive or misleading marketing schemes that often overpromise results and charge high fees to taxpayers who don’t qualify for an OIC. They’re also on the 2026 IRS Dirty Dozen List. Taxpayers can check OIC eligibility using free IRS tools to avoid high-pressure sales tactics. For assistance filing an OIC from a legitimate representative, taxpayers are encouraged to check for a licensed enrolled agent or a reputable accountant in their area.

05/13/2026

Tax relief for taxpayers impacted by wildfires in Southeast Georgia and Winter Storm Fern in Tennessee

The IRS announced tax relief for individuals and businesses in parts of Southeast Georgia that were affected by wildfires and straight-line winds that began on Apr. 18, 2026. These taxpayers now have until Aug. 20, 2026, to file various federal individual and business tax returns and make tax payments. Following the disaster declaration issued by the State of Georgia, individuals and households that reside or have a business in Clinch, Echols, and Brantley counties qualify for tax relief. The same relief will be available to any other counties added later to the disaster area. The current list of eligible localities is available on the Tax relief in disaster situations page on IRS.gov.

The IRS also updated the previous announcement for individuals and businesses impacted by Winter Storm Fern in Tennessee. The relief has been expanded to taxpayers in ALL 95 counties in the state of Tennessee. Tennessee taxpayers now have until June 8, 2026, to file various federal individual and business tax returns and make tax payments.

The IRS automatically identifies taxpayers located in the covered disaster areas and applies filing and payment relief. Affected taxpayers who reside or have a business located outside the covered disaster areas should call the IRS Special Services toll-free number at 866-562-5227 to request this tax relief. Tax practitioners in the covered disaster areas, who maintain records necessary to meet a filing or payment deadline for taxpayers located outside the disaster areas, may contact the IRS Special Services; if the practitioner maintains the necessary records of ten or more clients, please refer to Bulk requests from practitioners for disaster relief for additional guidance.

05/12/2026

Got mail from the IRS? Don’t toss it

Some taxpayers may get mail from the IRS. It’s important that they open any mail they receive and read it carefully.

Most letters or notices are about federal tax returns or tax accounts. Each notice will outline the specific issue and include steps the taxpayer needs to take. A notice may reference changes to a taxpayer's account, taxes owed, a payment request or a specific issue on a tax return or credit.

Review the information. If the mail is about a changed or corrected tax return, the taxpayer should review the information and compare it with the original return. If the taxpayer agrees, they should make notes about the corrections on their personal copy of the tax return and keep it for their records. Typically, a taxpayer will need to act only if they don't agree with the information, if the IRS asked for more information or if there’s a balance due.

Take any requested action. This may include making a payment. The IRS and authorized private debt collection agencies do send letters by mail. Taxpayers can also view digital copies of select IRS notices by logging into their IRS Online Account. The IRS offers several options to help taxpayers struggling to pay a tax bill. Taking prompt action could minimize additional interest and penalty charges.

Reply only if needed. Taxpayers don't need to reply to a notice unless specifically told to do so. If a taxpayer needs to call the IRS, they should use the number in the upper right-hand corner of the notice and have a copy of their tax return and letter.

Let the IRS know of a disputed notice. If a taxpayer doesn't agree with the IRS, they should follow the instructions in the notice to dispute what the notice says. The taxpayer should include information and documents for the IRS to review when considering the dispute.

Keep the letter or notice for their records. Taxpayers should keep notices or letters they receive from the IRS for three years from the date the tax return was filed. These include adjustment notices.

Watch for scams.
The IRS will never contact a taxpayer using social media. The first contact from the IRS usually comes in the mail.

05/07/2026

National Small Business Week: Tools for business owners and entrepreneurs

Being a small business owner or entrepreneur can be a heavy lift sometimes. Fortunately, there’re several tools and resources that can help them manage their tax responsibilities efficiently. National Small Business Week 2026, is an opportunity to highlight some of the improvements and technology available to enhance the taxpayer experience.

Business Tax Account
Business Tax Account is a secure, centralized platform that allows authorized users to:

View tax balances
Make payments including Offer in Compromise for eligible users
See payment history
Download select digital notices
View eligible transcripts, such as payroll and income
Request a tax compliance check
See the business name and address on file with the IRS
BTA recently expanded access to millions more users. The organizational types that can access BTA are sole proprietorships, partnerships, S corporations, C corporations, federal, state, and local governments, Indian tribal governments, and tax-exempt organizations. For more information or to learn about eligibility requirements to use BTA, visit www.irs.gov/businessaccount.

Information Returns Intake System
IRIS is a modernized system that lets taxpayers e-file information returns for tax years 2022 and later as well as file a correction and request automatic extensions.

Digital and mobile-friendly forms
Certain IRS forms are available for taxpayers to easily complete and submit from their computer, cell phone or tablet. This gives taxpayers a safe and fast way to electronically engage with IRS. For forms that require signatures, they need an IRS Individual Account to complete the mobile friendly forms.

IRS Secure Messaging
It’s a way for taxpayers and authorized representatives of a taxpayer/business to directly interact with IRS representatives. Taxpayers can submit electronic documentation quickly and securely and reduce or eliminate the need to call or mail documents. Secure messages can be sent to you by IRS representatives.

04/30/2026

It’s not too early to start planning for next year: Check withholding now

Even though the tax filing deadline for tax year 2025 passed a couple weeks ago, it’s not too early to start planning for next filing season. Planning now can help taxpayers avoid surprises next year. One action that can be taken is checking for proper tax withholding.

What is withholding?
Taxpayers need to pay their tax as they receive their income, and they do this through withholding. For employees, “withholding” refers to the federal income tax portion of each paycheck that an employer takes out for tax purposes. It can also be the amount from earnings self-employed people and others voluntarily set aside to pay their estimated taxes.

How taxpayers can check their withholding
The IRS Tax Withholding Estimator is a free, easy-to-use tool that helps workers and retirees estimate the amount of federal income tax to withhold from their paychecks now for the taxes they will owe next year.

The estimator reflects the changes to credits and deductions under the One, Big, Beautiful Bill. This includes the deductions for tips, overtime, car loan interest and enhanced deduction for seniors. It also accounts for updates tied to family-related credits, homeownership, and charitable giving.

What are the benefits of using the IRS Tax Withholding Estimator?
By using the estimator, taxpayers can manage their estimates based on any personal life change, such as buying a home, changing jobs, having a child or changing their marital status.

For people who recently completed their 2025 tax return, the IRS advises using the IRS Tax Withholding Estimator to consider all income sources such as full-time wages, side jobs and any sale of services or goods.

By adjusting tax withholding, taxpayers can:

Prevent owing money and potential penalties at tax time
Adjust withholding to increase take-home pay instead of waiting for a refund
What else taxpayers need
For an effective tax withholding estimate, taxpayers will need certain documents including:

All income statements, including their spouse’s if filing jointly
Data from other sources of earnings
Their most recent income tax return