Tax-Free Shares Self-Help (2024)

FAQs

How do I get answers to tax questions? ›

You can also call the IRS helpline at 800-829-1040 with your tax questions.

Profits on the sale of shares are recorded in the 'Capital gains' section of your tax return (you may need to use a 'supplementary section to show workings). Your broker's record of share trades or CHESS statements will help you work out how much you paid for shares and what you sold them for.

The primary way the IRS becomes aware of gifts is when you report them on form 709. You are required to report gifts to an individual over $15,000 on this form. This is how the IRS will generally become aware of a gift.

Try the brokerage firm's website to see if they have that data or call them to see if it can be provided. If you are absolutely stumped and have no records showing what you paid for your stocks, our recommendation is you go a website such as bigcharts.marketwatch.com that has historical quotes of stock prices.

Yes. Free help is available when you file taxes online with us. H&R Block provides online product support for a broad range of topics, including: Answers to tax questions.

Free tax preparation is available through the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) sites in many communities. Check your community's newspaper for site locations or call 1-800-829-1040 for more information.

Shares of stock received or purchased through a stock plan are considered income and generally subject to ordinary income taxes. Additionally, when shares are sold, you'll need to report the capital gain or loss. Learn more about taxes, when they're paid, and how to file your tax return.

Any money that you receive from your investments will be added to all your other types of income, including wages, personal pensions and rental income. Depending on all your earnings, you will then be taxed at the bracket that is applicable to you.

If you own shares, you may get income in the form of dividends. Dividends are a portion of the profits made by the company that issued the shares you've invested in. If you have an investment fund that is invested in shares, then you may get distributions that are taxed in the same way as dividends.

For tax year 2022, if the value of the gift is $1,000 or less in a calendar year, it doesn't even count. For tax year 2023, this increases to $17,000. The IRS calls this amount the annual gift tax exclusion. If a married couple makes a gift from joint property, they can each gift up to the annual exclusion.

What is the maximum gift allowed by IRS? ›

You can give up to $16,000 per person (tax year 2022) per year to as many people as you like without those gifts counting against your $12.06 million lifetime gift tax exemption.

Lifetime Gifting Limits

Each individual has a $11.7 million lifetime exemption ($23.4M combined for married couples) before anyone would owe federal tax on a gift or inheritance. In other words, you could gift your son or daughter $10 million dollars today, and no one would owe any federal gift tax on that amount.

According to the IRS, taxpayers need to keep records that show the tax basis of an investment. For stocks, bonds and mutual funds, records that show the purchase price, sales price and amount of commissions help prove the tax basis.

When someone inherits investment assets, the IRS resets the asset's original cost basis to its value at the date of the inheritance. The heir then pays capital gains taxes on that basis. The result is a loophole in tax law that reduces or even eliminates capital gains tax on the sale of these inherited assets.

Stepped-up basis is a tax provision that allows heirs to reduce their capital gains taxes. When someone inherits property and investments, the IRS resets the market value of these assets to their value on the date of the original owner's death.

How much does H&R Block's tax service cost? H&R Block offers a free online tax-filing program that includes simple federal and state tax returns. If you need to upgrade based on your tax situation, you'll pay $55 to $110 to complete a federal return, and $37 for each state tax return.

Its online options make it easy to import tax documents and to look at tax returns from previous years (if you're a returning customer). If you can afford it, H&R Block is a solid option for you. It's also a good choice if you want in-person help from a tax expert.

If the H&R Block tax preparation software makes an error on your return, we will reimburse you for any resulting penalties and interest up to a maximum of $10,000. Terms and conditions apply; see H&R Block's Accurate Calculations Guarantee for details.

IRS Customer Service, Online Live Chat

If you plan to chat with the IRS online, have your information ready for verification. You may be able to get information on your tax refund status or make a one-time payment.

You can designate your paid tax return preparer or another third party to speak to the IRS concerning the preparation of your return, payment/refund issues, and mathematical errors.

What is the best time to call the IRS? ›

A good rule of thumb: Call as early in the morning as possible. Phones are open from 7 a.m. to 7 p.m. (your local time) Monday to Friday, except: Residents of Hawaii and Alaska should follow Pacific time. Puerto Rico hours are 8 a.m. to 8 p.m. local time.

Missing capital gains

If you fail to report the gain, the IRS will become immediately suspicious. While the IRS may simply identify and correct a small loss and ding you for the difference, a larger missing capital gain could set off the alarms.

CGT is charged at the rate of either 10% or 18% for basic rate taxpayers. For higher or additional rate taxpayers, the rate is either 20% or 28%.

Short-Term or Long-Term

Generally, if you hold the asset for more than one year before you dispose of it, your capital gain or loss is long-term. If you hold it one year or less, your capital gain or loss is short-term.

If you wish to repurchase an investment that you have recently sold, over 30 days must elapse between the two transactions in order for you to utilise your CGT exemption or create a loss to offset against other gains realised within the same tax year.

The basic tax rule is that if the employee or director is given shares for free or pays less than the market value of the shares at the time of award a charge to income tax and sometimes national insurance will arise. The tax charge will be the difference between market value and the price paid by the employee.

Generally, any profit you make on the sale of a stock is taxable at either 0%, 15% or 20% if you held the shares for more than a year or at your ordinary tax rate if you held the shares for a year or less. Any dividends you receive from a stock are also usually taxable.

How Does Profit-Sharing Plan Work? Employers make profit-sharing contributions to the plan on behalf of their employees, and these contributions are not taxable income to the employee. The contributions grow tax-deferred, just like contributions to a 401(k) plan.

Can I transfer 100k to my son? ›

For 2022, the annual gift tax exclusion sits at $16,000. This applies per individual. So you can give $16,000 in cash or property to your son, daughter and granddaughter each without worrying about a gift tax. If you and your spouse make a gift jointly, the exclusion is $32,000.

Lifetime Gift Tax Limits

Most taxpayers won't ever pay gift tax because the IRS allows you to gift up to $12.92 million (as of 2023) over your lifetime without having to pay gift tax. This is the lifetime gift tax exemption, and it's up from $12.06 million in 2021.

Your accepting a $25,000 gift requires no special filing with the government. However, if you attempt to deposit it as one lump sum in a bank, you will be required to complete what is known as a “currency transaction report,” a form banks require for all deposits of $10,000 or more.

The gift tax limit is $16,000 in 2022 and $17,000 in 2023. The gift tax rates range from 18% to 40%. The gift giver is the one who generally pays the tax, not the receiver.

The person who makes the gift files the gift tax return, if necessary, and pays any tax. Essentially, gifts are neither taxable nor deductible on your tax return.

Giving Early Can Reduce Estate Taxes

A posthumous bequest to your children goes through a lengthy court proceeding know as probate, and your money might be subject to estate taxes that reduce your children's inheritance. By giving early, you reduce the size of your estate and avoid probate proceedings.

Lenders generally won't allow you to use a cash gift from just anyone to get a mortgage. The money usually must come from a family member, such as a parent, grandparent or sibling. It's also generally acceptable to receive gifts from your spouse, domestic partner or significant other if you're engaged to be married.

Whether your small business focuses on real estate or sold unneeded property during the tax year, a copy of form 1099-S, which is sent to both you and the IRS by the closing attorney or real estate official, reports the gross proceeds from the sale.

Does IRS audit cost money? ›

The cost of an audit can be high

Audits are likely to be costly. IRS data shows that over 90 percent of individual audits result in a tax change. The average additional tax owed is $6,014 for a mail audit and $21,918 for a more intrusive IRS field audit. CP2000s can also be costly.

If you do not report your cost basis to the IRS, the IRS considers your securities to have been sold at a 100% capital gain, which can result in a higher tax liability.

15-day Rule Applies to transfers of cost basis information. For covered securities, the transferring firm has 15 days to transfer cost basis and other required information after the transfer of securities.

While brokerages have cost-basis reporting obligations, it's still important to keep good records of your transactions. Follow these tips: Hold on to trade confirmations showing how much you paid for specific shares or keep track of that information on your own records at home.

There are two main ways to close the stepped-up basis loophole: tax capital gains at death, or replace stepped-up basis with a carryover basis.

The Internal Revenue Service (IRS) chooses to use the fair market value at the time of the benefactor's death to determine the new value of the asset being transferred to help calculate the capital gains taxation of inherited properties.

The IRS telephone number is 1-800-829-1040.

Choose option 2 for “Personal Income Tax” instead. Next, press 1 for “form, tax history, or payment”. Next, press 3 “for all other questions.” Next, press 2 “for all other questions.”

The IRS doesn't have a live customer service chat or text chat option where you can talk to a live agent.

("Intuit"). For Federal tax questions, this service is available at no additional charge in select TurboTax products; otherwise fees may apply. You understand that as part of the Service, an Intuit tax advisor will answer your questions related to U.S. federal tax laws (for individual Form 1040).

How do I challenge an IRS assessment? ›

Use Form 12203, Request for Appeals ReviewPDF, the form referenced in the letter you received to file your appeal or prepare a brief written statement. List the disagreed item(s) and the reason(s) you disagree with IRS proposed changes from the examination (audit).

Visit www.irs.gov/paymentplan for more information on installment agreements and online payment agreements. You can also call us at 1- 800-829-0922 to discuss your options. For information on how to obtain your current account balance or payment history, go to www.irs.gov/balancedue.

Visit the Local IRS Office

But you must remember to book an appointment first. You cannot just go to your local IRS office unexpectedly. Call the IRS at 844-545-5640 and make an appointment early on.

You can call 1-800-829-1040 to get answers to your federal tax questions 24 hours a day.

Senior IRS leadership and a New York state regulator began investigating Intuit and the Free File program. The Federal Trade Commission started investigating Intuit too, looking into the company's allegedly deceptive marketing practices.

If you filed the tax return with TurboTax, you can take advantage of our free audit support options. Our Audit Support Center walks you step-by-step through responding to an IRS notice.

You can directly call on its support number 1-800-446-8848 / (1-605-450-6884) and contact the live agent in real time.