Here are several of the most common tax questions and their answers. But like most things, there can be exceptions. Get the FAQs here!

Common tax questions

What happens to a loan if it’s forgiven? The IRS generally considers the canceled amount as taxable income, unless an exception applies. This means you may have to report the forgiven debt on your tax return and pay income taxes on it. Lenders typically issue a Form 1099-C for canceled debts, which you must include on your tax return.

Are my rewards from a credit card taxable? Taxation of any extras you earn with a credit card is not taxable if you had to pay to get them. This includes miles, discounts, and even cash back. Other rewards that you receive, such as a reward for signing up for a card or referring a new cardholder, are taxable income.

Does my child need to report cash earned from a lemonade stand on their tax return? Yes, the cash your child earned for helping a neighbor is taxable. The IRS doesn’t care if it came from mowing lawns, babysitting, or lemonade stands. To the IRS, earned income is earned income. Your child may not end up owing any income taxes thanks to the single taxpayer standard deduction of $15,000 in 2025. But they’ll still be on the hook for Social Security and Medicare taxes.

Do I really need to report gifts given to people? Yes, but only if you give more than $18,000 ($36,000 if married) in 2025 to any one person. You must report it to the IRS on a gift tax return. That’s because the IRS keeps track of allowable gifts throughout your lifetime, which in 2025 is $13,990,000 ($27,980,000 if married filing jointly). Only after reaching this lifetime dollar amount will you need to make a gift tax payment.

More FAQs

What happens to loans from my retirement account if I change jobs? When you switch jobs, you must pay back any loans borrowed from your employer-sponsored retirement account within a short amount of time. If you do not repay the loan, the outstanding balance becomes a taxable distribution. It also incurs an early withdrawal penalty.

Does my employer contribution count towards the 401(k) limit? Your employer’s matching contributions do not count toward your maximum contribution limit, which for this year is $23,500. If you’re 50 or older, you can sock away an additional $7,500 (for a total of $31,000) this year.

Do I have to report a loss? You may think the IRS does not take an interest in losses you incur, such as when you sell a stock at a loss or if your business loses money. The reality is that you should always report losses on your tax return because you can use them to offset income under certain conditions. In addition, most losses can carry forward to future years to offset income.

When in doubt, always ask for help. Contact our RRBB advisors if you have any questions or for more information.