Are you reporting everything you need to on your tax returns? The IRS will find out about your reportable events no matter what. Make sure you’re the one to tell them.
What is a reportable event on your tax return?
For individuals, any exchange of money above $5000 or with a paper trail must be reported to the IRS, even if it is not taxable. Always share these events with your tax preparer to make sure you are correctly reporting and paying any necessary taxes.
Reportable vs Taxable Events - what’s the difference?
All taxable events are reportable events, but not all reportable events are taxable. Income that is nontaxable must still be included on your returns. Generally, any income you receive is taxable unless it is specifically exempted by law, or you’ve accurately recorded losses against it. Your tax preparer’s job is to ensure that these are logged as nontaxable.
Are gambling wins a taxable event?
Yes, all gambling income is taxable, even if you ultimately lost more money than you won. You must log and report all of your gambling losses, or you will be considered responsible for paying taxes on everything you won. Casinos and betting apps report their payouts to the IRS, so they will look to you for taxes on the winnings if you don’t report your losses.
Is stock income a taxable event?
YES, any money made off of stocks is taxable income. The federal tax laws require brokerage firms, mutual funds, and other entities to report on Form 1099 all income paid to investors, such as interest and dividends. **Investing apps like Robinhood issue a 1099 to all of their users, whether you’ve seen it or not. (If you didn’t receive it, they don’t have your social security number, but that does not mean you are not responsible for reporting this income.)
Is Student Loan Forgiveness a taxable event?
Sometimes - current tax laws treat forgiven or canceled debt as taxable income, but there are some exceptions. Under the American Rescue Plan Act, student loan debt that is forgiven between Jan. 1, 2021, and Dec. 31, 2025, is not included in federal taxable income. **Student loan forgiveness through the Public Service Loan Forgiveness program is also not federal taxable income. This can vary at the state level however.
How a Tax Planner can help you sort out Reportable and Taxable Events
Get your reportable and taxable income organized now to avoid headaches in the upcoming tax season. Our tax planning services can help you correctly report stock interest and dividends, track gambling wins and losses, prepare for the implications of forgiven or canceled debt, and more. Contact us today to get ahead of tax season stresses.
