News & Updates

Many military spouses run businesses or do gig work, and whether it's a side hustle or a major operation, the IRS has tax resources, tools and information to help them keep things running smoothly.

Tax resources on IRS.gov

• Small Business and Self-Employed Tax Center – Available at IRS.gov/smallbiz, this page has resources for taxpayers who file Form 1040 or 1040-SR, Schedules C, E, F or Form 2106, as well as small businesses with assets under $10 million.
  
• Gig Economy Tax Center –The gig economy, also called sharing economy or access economy, is activity where people earn income providing on-demand work, services or goods. Often, it's through a digital platform like an app or website. The Gig Economy Tax Center at IRS.gov/gigeconomy has information for gig workers trying to manage their taxes.
  
• Tax Information for Businesses – Tax information, tools and resources for businesses and self-employed individuals are available at IRS.gov/businesses.
  
• Employer Identification Number – Generally, businesses need an EIN, even if they don't have employees. An EIN – also known as a Federal Tax Identification Number – identifies a business entity. Businesses can apply online at IRS.gov/ein.

Tools to stay on top of tax deadlines and payments

• Online Tax Calendar – The Online Tax Calendar at IRS.gov/taxcalendar, shows due dates and actions for each month. Business owners can see all events or filter them by monthly depositor, semi-weekly depositor, excise or general event types. They can also have calendar reminders sent to their email or import the calendar into their calendar program.
  
• Electronic Federal Tax Payment System – Businesses can pay their federal taxes online or by phone with EFTPS, a free tax payment system, by visiting IRS.gov/eftps.

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Organizations applying for tax-exempt status must be organized and operated exclusively for any of these purposes: charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, or preventing cruelty to children or animals.

Organizations that want to apply for recognition of tax-exempt status under IRC 501(c)(3) will complete and file a Form 1023-series application.

The application process on IRS.gov includes a step-by-step guide explaining how to apply for tax-exempt status.

Here are some key things to know about this process.

• Form 1023-series applications for recognition of exemption must be submitted electronically online at Pay.gov. The application must be complete and include the user fee.
• Some types of organizations don't need to apply for Section 501(c)(3) status to be tax exempt. These include churches and their integrated auxiliaries, and public charities with annual gross receipts normally no more than $5,000.
• Every tax-exempt organization needs an employer identification number (EIN), even if they don't have any employees. An EIN is a nine-digit number the IRS assigns for tax filing and reporting purposes. An organization must include their EIN on the application. Organizations can apply for an EIN online.
• The effective date of an organization's tax-exempt status depends on their approved Form 1023. If they submit this form within 27 months after the month they legally formed, the effective date of the organization's exempt status is the legal date of its formation. If an organization doesn't submit this form within those 27 months, the effective date of its exempt status is the date it files Form 1023.
• An organization that qualifies for tax-exempt status under IRC 501(c)(3) will be classified as a private foundation unless the organization meets the requirements to be treated as a public charity.
• A charitable organization must make certain documents available to the public. These include its approved application for recognition of exemption with all supporting documents and its last three annual information returns. See Publication 557, Tax Exempt Status For Your Organization for additional information on public inspection requirements.

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When couples separate or divorce, the change in their relationship status affects their tax situation. The IRS considers a couple married for tax filing purposes until they get a final decree of divorce or separate maintenance.

Update tax withholding

When a taxpayer divorces or separates, they usually need to update their proper tax withholding by filing with their employer a new Form W-4, Employee's Withholding Certificate. If they receive alimony, they may have to make estimated tax payments. Taxpayers can figure out if they're withholding the correct amount with the Tax Withholding Estimator on IRS.gov.

Tax treatment of alimony and separate maintenance

• Amounts paid to a spouse or a former spouse under a divorce decree, a separate maintenance decree or a written separation agreement may be alimony or separate maintenance for federal tax purposes.
• Certain alimony or separate maintenance payments are deductible by the payer spouse, and the recipient spouse must include it in income.

Rules related to dependent children and support

Generally, the parent with custody of a child can claim that child on their tax return. If parents split custody fifty-fifty and aren't filing a joint return, they'll have to decide which parent claims the child. If the parents can't agree, taxpayers should refer to the tie-breaker rules in Publication 504, Divorced or Separated Individuals. Child support payments aren't deductible by the payer and aren't taxable to the payee.

Not all payments under a divorce or separation instrument – including a divorce decree, a separate maintenance decree or a written separation agreement – are alimony or separate maintenance. Alimony and separate maintenance doesn't include:

• Child support
• Noncash property settlements – whether in a lump-sum or installments
• Payments that are your spouse's part of community property income
• Payments to keep up the payer's property
• Use of the payer's property
• Voluntary payments

Child support is never deductible and isn't considered income. Additionally, if a divorce or separation instrument provides for alimony and child support and the payer spouse pays less than the total required, the payments apply to child support first. Only the remaining amount is considered alimony.

Report property transfers, if needed

Usually, if a taxpayer transfers property to their spouse or former spouse because of a divorce, there's no recognized gain or loss on the transfer. People may have to report the transaction on a gift tax return.

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The summer months are a popular time to buy or sell a house. New homeowners should put reviewing the tax deductions, programs and housing allowances they may be eligible for on their move in to-do list.

Deductible house-related expenses

Most home buyers take out a mortgage loan to buy their home and then make monthly payments to the mortgage holder. This payment may include several costs of owning a home. The costs the homeowner can deduct are:

• state and local real estate taxes, subject to the $10,000 limit
• home mortgage interest, within the allowed limits

Taxpayers must itemize their deductions to deduct home ownership expenses.

Non-deductible payments and expenses

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 home ownership. 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. An MCC is issued only for a new mortgage for the purchase of a main home.

Homeowners Assistance Fund

The Homeowners Assistance Fund program provides financial assistance to eligible homeowners for paying certain expenses related to their principal residence to prevent mortgage delinquencies, defaults, foreclosures, loss of utilities or home energy services and also displacements of homeowners experiencing financial hardship after Jan. 21, 2020.

Minister's or 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.

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Many people requested an extension to file their tax return after the usual April deadline. These filers have until Oct. 16, 2023, to complete and file their tax return. The IRS suggests that those who already have the forms and information they need file now – there's no advantage to waiting until the deadline and filing now saves the worry that they may miss the deadline.

There are a few things extension filers should know as they get ready to file.

File by the deadline

Extension filers should file and pay any balance due by Monday, Oct.16, 2023.

Many taxpayers can use IRS Free File

Many taxpayers can e-file their tax return for free through IRS Free File. The program is available on IRS.gov through October 16. E-filing is easy and safe, and it's the most accurate way for people to file their taxes. Filing electronically can also help taxpayers determine their eligibility for many valuable tax credits.

Taxpayers get their refund faster by choosing direct deposit

Anyone due a refund should request direct deposit to get their tax refund electronically deposited into their financial account.

IRS offers payment options for taxpayers with a balance due

Those who owe taxes and can't pay their balance in full should pay as much as they can to reduce interest and penalties for late payment. The IRS has options for people who can't pay their taxes, including applying for a payment plan on IRS.gov. Taxpayers can view payment options or check their account balance online.

Extension filers should request missing or incorrect documents directly from employer or other payers

If a taxpayer is waiting to file because they're missing a form like a W-2 or 1099, they should contact their employer, payer or issuing agency and request a copy of the missing or corrected document. If they still can't get the forms, they may need to use Form 4852 as a substitute.

Taxpayers who didn't file in April and didn't request an extension should still file as soon as possible

Anyone who did not request an extension by this year's April 18 deadline should file and pay as soon as possible. This will stop additional interest and penalties from adding up. There is no penalty for filing a late return for people who are due a refund

Some members of the military have different deadlines

Special deadline exceptions may apply for certain military service members and eligible support personnel in combat zones. The Department of Defense's MilTax online tax software is available to service members and their families, regardless of income.

Taxpayers in disaster areas may have more time to file

Taxpayers living in an area impacted by a recent natural disaster may have an automatic extension of time to make various tax payments. Visit Tax Relief in Disaster Situations on IRS.gov for more information.

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