Taxpayers Must Be Aware of Complex Rules Governing Crypto Holdings and Non-Traditional Income

Tax season can be a daunting experience for many individuals, especially those who have non-traditional sources of income. According to the IRS, about 90% of taxpayers opt for the standard deduction, but there are certain situations that may require itemizing expenses.

One such situation is the reporting of crypto holdings and gambling winnings. Mark Steber, chief tax information officer at Jackson Hewitt Tax Service, explains that even small wins, such as a dollar or less, can be considered taxable income.

The rules governing gaming and prediction markets are equally complex. 'There's no de minimus rule,' says Steber. 'If you have income from these activities, you must report it on your tax return.' Additionally, the IRS requires taxpayers to net their wins and losses, which can lead to confusion under the new rules.

Another area that may require attention is student loans. Taxpayers with student debt may be eligible for a $2,500 deduction if they have made payments on their loans. It's essential to note that this deduction is not automatic and requires careful planning.