Tax Update

The tax deadline to submit 2021 tax returns and payments (or an extension to file) is Monday, April 18, 2022 for both the IRS and California Franchise Tax Board. Taxpayers requesting an extension will have until Monday, October 17, 2022 to file their extended tax returns. Similar to last year, the first quarter estimated tax payment for 2022 will be due April 18, 2022.

In recent news, the Build Back Better Act has passed the House of Representatives but hit a number of roadblocks in the Senate.  The outlook for passage of the entire bill looks bleak so recent thoughts are that the proposed bill may be broken up into smaller bills in order to improve chances of passing.  This bill has gone through many revisions so we are monitoring the situation and will update you if anything gets passed.

With cryptocurrency investments becoming easier to obtain and utilize, the IRS is focused on the tracking and taxation of such transactions. Due to the complex nature of cryptocurrency, it is important for taxpayers to keep track of their acquisitions, including the date and value of acquisition, to ensure accurate reporting.  From an income tax perspective, any time cryptocurrency is exchanged for cash, other cryptocurrency, or goods and services, it is considered a sale which requires reporting on a tax return.  At this time, a sale of cryptocurrency at a loss is not subject to wash sale rules so there are opportunities for planning and coordination with other capital gains.  We recommend you reach out to your DKC representative if you have any questions about cryptocurrency, as it is a complex subject and tax rules are constantly changing.

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