The 8.5-month rule, formally the "recurring item exception" under IRC §461(h), allows accrual-basis businesses to deduct certain accrued expenses in the current tax year, even if economic performance (payment/service receipt) occurs in the following year. It must be paid within 8½ months after year-end, be recurring, and meet the "all-events" test.

What is the IRS 8.5 month rule?

According to the rule, an expense is incurred and deductible in the tax year if it meets the “all-events test” and the economic performance in question occurs within 8½ months after the close of the tax year.

What is the $600 rule in the IRS?

The IRS $600 rule refers to the previous reporting threshold for Form 1099-K, but recent legislation (the OBBBA in 2025) reverted the requirement for payment apps (like Venmo, PayPal) and online marketplaces to report income to over $20,000 AND 200+ transactions, effectively canceling the phased-in $600 rule, although some changes might still happen for 2024/2025 as the IRS figures it out. This means casual sellers and gig workers are generally not getting 1099-Ks for small amounts anymore, but remember, you still must report all taxable income, even without a form, according to IRS.gov.
 

Can I do my taxes if I only worked 2 months?

Yes, you can file taxes - you can always file a tax return - and, depending on how much income you have in total from all sources, you may in fact be required to file.

What is the 2.5 month rule for tax deductions?

Accrual-method taxpayers may deduct compensation in the current tax year if the liability is fixed and determinable at year-end and the taxpayer pays the compensation within 2½ months after year-end.

Most Seniors Haven’t Heard About This New IRS Rule — Big Mistake

What is the 3.5 month rule for taxes?

Under the 3½-month rule, a taxpayer may treat economic performance as occurring with respect to a service liability when payment is made, as long as the taxpayer reasonably expects the person providing the services to provide them within 3½ months after the taxpayer makes the payment.

How to get a $10,000 tax refund?

A $10,000 tax refund usually means you overpaid taxes significantly or qualify for large refundable credits, like the Earned Income Tax Credit (EITC) for low-to-moderate earners (potentially over $8,000) or education credits (American Opportunity up to $1,000, Lifetime Learning up to $2,000). You can also boost refunds by itemizing deductions (like charitable donations, energy credits), adjusting withholdings (W-4), or claiming new deductions like the $6,000 senior deduction (for those 65+) if you qualify, but it's about reducing tax liability, not a guaranteed amount.

How do I avoid a tax audit?

Most taxpayers will do anything they can to avoid tax audits. Filling out an accurate tax return is the best way to avoid an audit. Additionally, you should ensure you double-check your math and only claim legitimate tax deductions. E-filing may also be helpful.

How do you avoid the 22% tax bracket?

To avoid the 22% tax bracket (or any higher bracket), you need to lower your taxable income using strategies like maximizing pre-tax retirement/HSA contributions, strategically harvesting capital losses, deferring income, and making charitable donations, which reduce the amount of income subject to higher rates, rather than changing the entire bracket system for all your income.

What is the IRS $10,000 rule?

The IRS $10,000 rule generally refers to Form 8300, requiring businesses to report cash payments over $10,000 received in a trade or business, to combat money laundering and tax evasion. This applies to single or related transactions within a year, including cash, cashier's checks, money orders, and other cash equivalents, and involves collecting payer info. Banks also report large cash transactions (over $10k) via FinCEN Form 112 (CTR). 

Does IRS forgive after 10 years?

The IRS generally has 10 years to collect tax debt from the assessment date (the Collection Statute Expiration Date or CSED), but this clock can be paused or extended by events like bankruptcy, installment agreements, Offers in Compromise, or being outside the U.S. for extended periods, meaning the debt doesn't always disappear automatically after a decade, especially in cases involving fraud.

What is the IRS 90% rule?

The IRS will not charge you an underpayment penalty if: You pay at least 90% of the tax you owe for the current year, or 100% of the tax you owed for the previous tax year, or. You owe less than $1,000 in tax after subtracting withholdings and credits.

What is the most overlooked tax break?

The most overlooked tax breaks often involve out-of-pocket charitable expenses, like mileage or supplies for fundraisers, student loan interest deductions, energy credits for home improvements, and IRA contributions for non-working spouses, alongside specific deductions for things like jury duty pay turned over to an employer, or unclaimed state tax refunds if you itemized sales tax instead of income tax. These often fall under the radar because they require tracking small expenses or understanding specific eligibility rules beyond just major contributions or standard deductions.

What is the $6000 tax credit?

A new $6,000 tax deduction for seniors (age 65+) was introduced by the One Big Beautiful Bill Act (OBBBA) for tax years 2025-2028, offering up to $6,000 extra income reduction per person ($12,000 for couples) on top of existing deductions, with income phase-outs for higher earners (MAGI over $75k single, $150k joint), reducing taxable income rather than providing a direct $6k refund. 

Are taxpayers getting a $3,000 refund?

Rumors of a universal $ 3000 check from the IRS have gained traction on social media, but these claims are not true. As of 2025, there is no federal program authorizing a new $ 3000 stimulus, rebate, or automatic payment to all Americans.

What happens if a refund is more than $50,000?

Many are wondering if the Income Tax Department delays processing refunds if the refund amount is large, such as over Rs 50,000. According to income tax rules, there is no upper limit on refunds. Whether your refund is Rs 10,000 or Rs 1 lakh or even greater, it will be credited the same way.

What are common tax filing mistakes?

Misspelled names. Likewise, a name listed on a tax return should match the name on that person's Social Security card. Entering information inaccurately. Wages, dividends, bank interest, and other income received and that was reported on an information return should be entered carefully.

How do I maximize my tax refund?

To get a bigger tax refund, you need to either lower your taxable income with deductions (like IRA/HSA contributions, student loan interest, charitable donations) or claim valuable tax credits (like Earned Income Tax Credit, Child Tax Credit) that directly reduce your tax bill, plus you can increase withholdings on your W-4 to "prepay" more tax for a larger refund check. Staying organized, choosing the right filing status, and consulting a tax professional are also key strategies to ensure you claim everything you're eligible for.

Is it better to get a bonus or raise?

One of the most notable differences between bonuses and raises is the duration of the compensation. Bonuses are one-time, short-term financial rewards. A raise is an increase to your current salary for the foreseeable future and provides more long-term benefits.

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