Mountain high Tax & Bookkeeping Inc

09/22/2026

Caring for a family member or relative? Understand the special tax rules

Family members who are paid to take care of a loved one may have tax responsibilities. This depends on whether they are considered an employee or provide their services as their own business.

Let’s go over the special rules of being a family caregiver.

When a caregiver is considered an employee
A caregiver is someone who performs in-home services for elderly or disabled individuals. Generally, they are considered an employee and the person being cared for is considered the employer. This could make them responsible for employment taxes. However, there are some cases when the employer may not owe employment taxes. Some examples are when the caregiver is:

Their spouse
Their child under the age of 21
Their parent, unless an exception applies
An employee who is under the age of 18 at any time during the year, unless an exception applies
It’s important to know that even if they don’t owe employment taxes, they are still required to report the caregiver’s compensation on Form W-2. See Table 1, “Do You Need to Pay Employment Taxes” on page 5 of Publication 926, Household Employer's Tax Guide, for more information.

When a caregiver isn’t considered an employee
Sometimes, caregivers aren’t considered employees, but they are still required to report the compensation as income on their Form 1040 or 1040-SR. They may also be required to pay self-employment tax depending on the facts and circumstances.

Here are some examples of when a family member caregiver typically wouldn’t owe a self-employment tax:

If a family member caregiver is paid by an insurance company to take care of their spouse. The taxpayer would still be required to report the income though.
If a family member caregiver received income from a state agency to care for their grandchildren so their daughter could work. Again, the taxpayer would still be required to report any income.
When self-employment tax may apply
If the caregiver is engaged in a trade or business providing care services, they would be required to pay self-employment tax. For example:

A caregiver received income from a state agency to care for their grandmother, and they operate a sole proprietorship adult day-care business for multiple clients, including their grandmother, in their home. The taxpayer would owe self-employment tax since the taxpayer is engaged in a trade or business of providing care giving services as a sole proprietor operator of an adult day care. The taxpayer must report the full amount of the payment as income on both Schedule C and Schedule SE.

09/14/2026

Estimated taxes aren’t just for the self-employed

Typically, people who are self-employed pay their federal income tax by making estimated tax payments. However, they aren’t the only ones that may need to pay estimated tax. Federal income tax is a pay-as-you-go tax. Which means the tax must be paid as income is earned or received during the year. The two ways federal taxes are paid are either through withholding or estimated tax.

Taxpayers who receive income from sources not subject to withholding or don’t have enough withheld, may have to make estimated tax payments. The next estimated tax payment due date is Sept. 15. Let’s take a closer look at who may have to pay estimated tax to ensure they are meeting their tax obligations.

Who may pay estimated tax
Self-employed individuals typically pay their tax this way. Even if a taxpayer isn’t self-employed, they still may have to pay estimated tax if they receive income from sources such as:

Interest
Dividends
Alimony
Capital gains
Royalties
Rents
Prizes and awards
Generally, individuals, including sole proprietors, partners, and S corporation shareholders, must make estimated tax payments if they expect to owe tax of $1,000 or more when their return is filed. Estimated tax is used to pay not only income tax but other taxes such as self-employment tax and alternative minimum tax.

Ways to pay
Taxpayers can pay online, use Form 1040-ES and pay by mail, or by phone. Additionally, individuals can pay through their IRS Individual Online Account, where they can also see their payment history and other tax records.
Businesses can now make most common business tax payments, including estimated taxes and federal tax deposits, through their Business Tax Account or Direct Pay for businesses.

Most taxpayers who make estimated tax payments pay on a quarterly basis. However, they can also be made weekly, bi-weekly, monthly, etc. if they have paid enough in by the end of the quarter. Visit IRS.gov/payments to view all the options. For additional information, refer to Publication 505, Tax Withholding and Estimated Tax.

Avoid penalties
Taxpayers who didn’t pay enough tax during the year, either through withholding or by making estimated tax payments, may have to pay a penalty. Generally, the IRS can figure this penalty for them.

Knowing the requirements and paying on time is key to avoiding any penalties.

Make payments, view your account or apply for a payment plan with the IRS.

09/10/2026

Taxpayers have the right to retain representation

When working with the IRS, all taxpayers have the right to retain an authorized representative of their choice to act on their behalf. For taxpayers who can’t afford representation, they have the right to seek assistance from a Low Income Taxpayer Clinic. This is one of the ten fundamental rights of all taxpayers in the Taxpayer Bill of Rights.

What taxpayers can expect:

Taxpayers may select someone to represent them in an interview. This could be an attorney, certified public accountant, or enrolled agent.
Any attorney, CPA, enrolled agent, enrolled actuary or other person permitted to represent a taxpayer before the IRS, who's not disbarred or suspended from practice before the IRS, may submit a written power of attorney to represent a taxpayer before the IRS.
Taxpayers who retain representation don't have to attend with their representative unless the IRS formally summons them to appear.
In most situations, the IRS must suspend an interview if the taxpayer requests to consult with a representative.
Taxpayers have the right to seek assistance from a Low Income Taxpayer Clinic if they can't afford representation. They can find a LITC near them by visiting the Low Income Taxpayer Clinics page or by calling the IRS toll-free at 800-829-3676.
LITCs are independent from the IRS and the Taxpayer Advocate Service. These clinics represent individuals whose income is below a certain level and who need to resolve tax problems with the IRS. LITCs can represent taxpayers in audits, appeals and tax collection disputes before the IRS and in court. In addition, LITCs can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Services are offered for free or for a small fee.

09/04/2026

How taxpayers can reconstruct records after a disaster

Some taxpayers may need to reconstruct vital records that were lost in a disaster. Having these records is important for tax purposes, federal assistance or insurance reimbursement. Here are a few steps people who were affected by a disaster can take if they need to obtain their lost records.

Replace tax records
A recent tip explained the different types of tax transcripts and how to get them. The most common type needed after a disaster loss is a tax return transcript. Taxpayers can:

Register to use Individual Online Account to view, print, or download their transcript(s)
Order a transcript by mail or call the automated phone transcript service at 800-908-9946. This typically takes between 5 to 10 calendar days for delivery.
Request by submitting Form 4506-T, Request for Transcript of Tax Return.
Financial and bank records
Credit card companies and banks often provide users with access to past statements.

Reconstruct personal property records
Photos, videos, canceled checks, receipts can help establish the value of damaged or lost property. They can also check online sources to help determine fair market value.

Real property records

Property documents: Contact the title or escrow company or bank that handled the purchase of the home or other property for copies of the records.
Home improvements: Get in touch with the contractors who did the work and ask for statements to verify the work and cost. They can also get written descriptions from friends and relatives who saw the house before and after any improvements.
Inherited property: Check court records for probate values. If a trust or estate existed, taxpayers can contact the attorney who handled the trust.
No records: People with no records available should check the county assessor's office for old records that might address the value of the property.
Vehicle records
Vehicle owners can research the current fair-market value for most vehicles. Resources are available online and at most libraries. They can also contact the dealer where the car was purchased and ask for a copy of the contract.
Taxpayers in a disaster area may now see personalized messages in their IRS Individual Online Account. The messages highlight tax relief, including extended filing and payment deadlines as well as a link to other disaster assistance information. They can also find news about disaster tax relief specific to their area on the Around the nation page of IRS.gov.

08/27/2026

What taxpayers should know about IRS third party authorizations

Taxpayers can give a third party the authority to help with federal tax matters. Depending on the type of authorization, this could be a family member or friend, or a tax professional, attorney or business.

There are different types of third-party authorizations with specific roles assigned. Additionally, taxpayers who want to have a third party represent them must formally grant them permission to do so.

Different types of third-party authorizations:

Power of Attorney – Allows someone to represent a taxpayer when resolving tax matters with the IRS. With this authorization, the representative must be an individual authorized to practice before the IRS and Form 2848, Power of Attorney and Declaration of Representative must be completed. A POA can do several things, such as:
Represent, advocate, negotiate and sign on behalf of the taxpayer
Argue facts and the application of law
Receive tax information for the matters and tax years/periods specified by the taxpayer
Receive copies of IRS notices and communications
Tax Information Authorization – Appoints a person to review or receive a taxpayer's confidential tax information for the type of tax for a specified period using form 8821.
Third Party Designee – Designates a person on the taxpayer's tax form to discuss that specific tax return and tax year with the IRS.
Oral Disclosure – Authorizes the IRS to disclose the taxpayer's tax info to a person the taxpayer brings into a phone call or meeting with the IRS about a specific tax issue.
Revoking a third-party authorization
A taxpayer can choose to revoke any authorization at any time.

Power of Attorney stays in place until the taxpayer revokes the authorization or the representative withdraws it.
Tax Information Authorization stays in effect until it is revoked by the taxpayer or the designee withdraws it.
Third Party Designee generally expires one year from the due date of the tax return, not counting extensions.
Oral disclosure, unless it’s stated otherwise, is automatically revoked once the conversation has ended. If the taxpayer wants additional oral disclosure exceeding the original request, a new authorization will be required.

08/26/2026

Tax transcripts: Know the different types and how to get them

Taxpayers may need to access their tax records or transcripts for many different reasons. It could be needed for filing a tax return, applying for a mortgage or loan, to name a couple of reasons.

There are several different kinds of tax transcripts available to taxpayers for free. Here’s what’s available, what they are and how they can be obtained.

What are the different transcript types?

Tax return transcripts show most line items from the taxpayer’s original Form 1040-series tax return, along with any forms and schedules, but doesn't show any changes made after the original return was filed. It’s available for the current and three prior tax years and is often used for life events such as mortgages or financial aid.
Tax account transcripts show basic information such as filing status, taxable income, and payment types. Unlike the tax return transcripts, this one will show changes made after the original return was filed and is generally available for the current and nine prior tax years.
Record of account transcripts combine the tax return and tax account transcripts above into one complete transcript. This transcript is available for the current and three prior tax years.
Wage and income transcripts show data from information returns we receive such as Forms W-2, 1098, 1099, and 5498. The transcript will only display information return documents that have been filed with the IRS which may not reflect all the information return documents issued to the taxpayer. This transcript is available for the current and nine prior tax years.
Verification of non-filing letter states the IRS has no record of a processed Form 1040-series tax return as of the date of the request. It doesn't indicate whether the taxpayer was required to file a return for that year. This letter is available after June 15 for the current tax year or anytime for the prior three tax years.
Ways to get transcripts

Register to use Individual Online Account to view, print, or download all transcript types listed above.
Order a transcript by mail or call the automated phone transcript service at 800-908-9946. This typically takes between 5 to 10 calendar days for delivery.
Request any transcript listed above by submitting Form 4506-T, Request for Transcript of Tax Return.
A transcript isn't a photocopy of a taxpayer’s actual return. If a copy of the original return is needed, they can submit Form 4506, Request for Copy of Tax Return. Refer to the form for the processing time and fee.

08/21/2026

What employers need to know about the enhancements to the Paid Family and Medical Leave Tax Credit

Employers, including small businesses, that provide paid family and medical leave to their employees may be eligible for an employer tax credit. Several enhancements have been made to this credit under the Working Families Tax Cuts.

Here’s an overview of the employer credit for Paid Family and Medical Leave, including the recent changes.

What is the employer credit for PFML?

Employers who meet the requirements can claim a general business tax credit from 12.5% to 25% of wages paid to qualifying employees for up to 12 weeks of family and medical leave per taxable year.

Employers can offer up to 12 weeks of paid family and medical leave to employees for the following reasons:

Having a baby, adopting or fostering a child
Taking care of their own serious health condition or for their spouse, child, or parent
Dealing with a situation of a close relative who is a member of the Armed Forces and on covered active duty
Taking care of a close relative who is seriously ill or an injured covered servicemember
Key enhancements:

The credit is now permanent.
Expanded eligibility: Employers can claim the credit for employees with six months of service and for part-time employees working 20 hours or more per week.
Expanded coverage: Employers can claim the credit for insurance premiums paid to provide leave, or wages paid during leave.
State and local mandates: Employers can count leave provided under state or local mandates toward the eligibility for this federal tax credit, but not toward the credit calculation.
Ways to claim the credit

Employers can claim the credit using one of these methods:

New premium-based: Based on qualifying premiums the employer paid for PFML insurance policies
Wage-based: Based on the wages paid while the employee is on PFML
Learn more about each method in Notice 2026-28. It compares the two methods, addresses how to allocate the qualifying premiums, and how to elect between the premium method and the wage method.

08/06/2026

How to request help with the IRS Independent Office of Appeals

As highlighted earlier this week in the Taxpayer Bill of Rights feature, taxpayers have the right to appeal a decision in an independent forum. If a taxpayer disagrees with an IRS determination, they can ask the Independent Office of Appeals to review their case. Appeals operates separately from the IRS office that made the original determination and provides a fair and unbiased review of the applicable tax matter.

Here's what taxpayers need to know to appeal their case:

Requesting an Appeal
Taxpayers who meet the criteria to request an appeal must do so in writing.

They must complete the written request and mail it to the IRS office that sent the letter with their appeal rights. The IRS office that receives the request will attempt to resolve the disputed tax issues. If that office can't resolve the issues, they will forward the case to Appeals.
It is important that taxpayers do not send their requests directly to Appeals; this will only delay the process and may prevent Appeals from considering the case.
Generally, once a case is received in Appeals, an Appeals officer will contact the taxpayer via letter and will propose a conference date for the appeal to be heard.
If a taxpayer hasn't heard about their appeal and it's been more than 120 days, taxpayers can contact the IRS office they worked with last for a status update.
What to expect during the Appeals conference

Appeals conferences may be completed by phone, in person, mail or by video. Taxpayers may choose which type of conference they prefer.
Taxpayers can use secure digital tools to send and receive documents quicker. Learn more on the What to expect from Appeals FAQs.
If the taxpayer submits new information that was not reviewed by the original IRS office, Appeals may send the case back to that office review. Appeals will not raise new issues or reopen issues agreed to by the taxpayer or the IRS, except in cases of potential fraud.
During the conference, the Appeals officer reviews the facts, law, and information provided by both the taxpayer and the IRS. The reasons for the decision and the taxpayer’s available options will be explained. Usually, an appeal ends in one of these ways:
IRS position upheld: If the facts and law support the IRS’s position.
In taxpayer’s favor: If the facts and law support the taxpayer's position or courts have ruled in favor of taxpayers in similar cases.
Compromise: If the facts or law are unclear, or courts have made different rulings in similar cases, the Appeals officer may suggest a compromise. In this case, the taxpayer may pay part of the tax that is due.

07/28/2026

Keep an eye out for common charitable contributions scams

Scammers have been known to take advantage of people’s kindness and generosity. Whether it’s creating a fake charity or encouraging the use of inaccurate estimates for donated property, taxpayers should be aware and proceed with caution.

Let’s explore these common scams and schemes around charitable donations that were part of the 2026 Dirty Dozen list.

Fake charities
After a disaster or tragedy, scams of all kinds often increase. A common one is when fraudsters create fake charities to collect donations and personal information. A few things to keep in mind before donating:

Verify if the organization is a qualified tax-exempt organization. Donations to individuals are not deductible. Taxpayers can use the Tax Exempt Organization Search tool on IRS.gov to verify whether an organization is eligible to receive tax-deductible contributions.
Taxpayers who give money or goods to a charity may be able to claim a deduction on their federal tax return if they itemize deductions. Taxpayers who don’t itemize still may be able to deduct cash contributions. It’s important to know donations only count if they go towards a qualified tax-exempt organization according to the IRS.
Keep receipts and documentation of all donations, whether cash or other property.
Non-cash charitable contribution schemes
This scheme isn’t directly related to disasters but is still one that taxpayers need to be mindful of. Some schemes involve inflated appraisals of donated property such as syndicated conservation easements, art, or other assets. If a taxpayer donates property or goods, they need to keep good records and accurately document the fair market value. Don’t be tempted by promises to eliminate or substantially reduce tax liability.

Reporting a suspected scam
Taxpayers and tax professionals can report suspected tax fraud, scams, identity theft, or other tax-related wrongdoings to the IRS. Tips can be submitted confidentially using a smartphone, tablet, or computer at IRS.gov/submitatip. It consolidates IRS fraud-reporting options into one location and routes tips to the appropriate IRS office. If a taxpayer thinks their tax identity has been compromised, they should visit IRS.gov/idtheft for steps to protect their account.

Identity Protection PIN (IP PIN) frequently asked questions.

07/21/2026

Types of major life events and how they can affect filing

There are several kinds of major life events that can affect a taxpayer’s filing requirements, tax benefits and withholding. It could be marriage, welcoming a new child, divorce, or loss of a loved one- all of these can impact their tax situation. Here are some common life events and an overview of their effects.

Marriage
Getting married may affect a taxpayer's filing status, tax withholding and eligibility for certain tax benefits. Newly married couples should report any name change to the Social Security Administration and any address change to the U.S. Postal Service, employers and the IRS. They should also review their tax withholding and update their W-4 with their employer, if needed.

Birth or adoption of a child
A new child may make taxpayers eligible for tax benefits, including the Child Tax Credit, Adoption Credit or Child and Dependent Care Credit. There are individual eligibility requirements for each type of credit. The parent’s or taxpayer must have a valid Social Security number along with the child, to apply.

Divorce or legal separation
Getting divorced or legally separated affects filing status, tax withholding, who can claim dependents, and eligibility for certain credits and deductions. Changes to income, withholding and filing status may require taxpayers to update their Form W-4.

Death of a spouse or family member
The death of a spouse or loved one can affect filing requirements and status. In general, a final individual income tax return of a deceased person should be filed the same way if the person were alive. All income must be reported up to the date of death along with the claiming of any eligible credits or deductions.

After any major life event, taxpayers should review their withholding, update their personal information and keep important records. IRS online tools and resources at IRS.gov can help taxpayers understand how these changes may affect their taxes and prepare them for the next filing season.