Five Common Tax Questions

Tax season often triggers a cascade of questions. Here are five of the most common and their answers.

1. Are the miles earned on my credit card taxable?

Taxation of extras  earned with a credit card – including miles, discounts, even cash back – are not taxable if you had to pay to get them. Other rewards, such as referring a new cardholder, are considered taxable income.

2. Does my employer contribution count towards the 401(k) limit?

Your employer’s matching contributions do not count toward your maximum contribution limit, which is $23,000 for 2024. If you’re 50 or older, you can put away an additional $7,500 (for a total of $30,500) this year.

3. What happens to loans from my retirement account if I change jobs?

When you switch jobs, you must pay back loans borrowed from your employer-sponsored retirement account. If the loan isn’t paid back, the outstanding balance is considered a distribution that is subject to income taxes and an early withdrawal penalty.

4. Do I need to report gifts given to people?

Yes, but only if you give more than $18,000 ($36,000 if married) in 2024 to any one person. The IRS keeps track of gifts you’re allowed to make over your lifetime, which is $13,610,000 in 2024 ($27,220,000 if married). You only need to pay tax on the gifts once you reach the lifetime dollar amount.

5. Do I have to report a loss?

You should report losses on your tax return because you can use them to offset income under certain conditions. Most losses can also be carried forward to future years to offset income.

Do you have a question? Reach out to us. The answer could surprise you!