12/23/25 Newsletter

Merry Christmas and happy holidays from the team at TaxStache!

This week’s lineup:

• 🎁 Charitable Giving: Most donations earn warm fuzzies, not tax breaks.

• 🏡 Adult Child Returns Home: Claiming them depends on strict IRS tests.

• 👻 Haunted by Your Ex’s Taxes: Joint returns follow you, even after divorce.

• 📉 Martha Stewart’s Market Mistake: A well-timed stock sale and a bad lie sent her to prison.

Personal Finance

🎁 Charitable Giving and the IRS

It happens all the time. It’s Saturday. The closet gets cleared out, and suddenly there’s a mountain of clothing that can only be described as “aggressively 2014.” Everything gets bagged up, dropped at the local donation center, and a small slip of paper is handed over.

That little receipt goes into the glove compartment, and the warm glow sets in. “Doing good,” the thought goes. “And getting a tax deduction.”

Then tax season rolls around, and that same slip gets presented with confidence. At that moment, someone on our team gets the joyless job of pouring cold, bureaucratic reality on the warm fuzzies.

That receipt for “three bags of men’s clothes”? Wonderful gesture, worth nothing on a tax return.

The culprit isn’t generosity. It’s the 2017 tax overhaul.

The Great Wall of the Standard Deduction

Before 2018, lots of taxpayers itemized deductions. Mortgage interest, unlimited state and local taxes, and charitable gifts all got tallied up.

Then the Tax Cuts and Jobs Act arrived and unleashed a massive standard deduction. For 2025:

• Single: $15,750

• Married Filing Jointly: $31,500

These are large, automatic deductions that require no receipts. Taxpayers can either take the standard deduction or itemize. Never both.

Which means charitable gifts only matter tax-wise if total itemized deductions rise above that $15,750 or $31,500 threshold. For about 90 percent of Americans, they don’t. The standard deduction wins every time.

Generosity still counts. Just not on Form 1040.

Want the rules for itemizers and charitable strategies? Keep reading →

Money Moves

🏡 When Your Adult Child Moves Back Home

Having your adult child move back home is a mix of emotions. There's the comfort of having them under your roof again, the rediscovery of old routines, and maybe a little less space in the refrigerator.

But once everyone settles in, a new reality emerges: your finances have changed, and so has your tax return.

It can feel awkward to bring up money, but figuring out the tax implications is critical for both you and your child. Here's a practical guide to the most common questions that come up when you have a "boomerang kid."

The Big Question: Can You Claim Them as a Dependent?

Before you can figure out any of the tax breaks, you have to answer one question. Does your adult child legally qualify as your dependent? The IRS has a multi-part test. It's not about feelings, it's about the facts.

Want the dependent tests and tax rules? Keep reading →

IRS Survival Guide

👻 When Your Ex’s Taxes Haunt You

Your divorce was finalized years ago. You’ve moved on. Then, a letter arrives from the IRS. It says you owe $25,000 in back taxes from a joint return you filed five years ago because your ex had a rather ... creative approach to reporting income.

To make matters worse? You have no idea where your ex even is.

Welcome to the special hell of joint and several liability. But before you panic, know this: you have options.

Joint and Several Liability: The Thing Nobody Warns You About

When you sign a joint tax return, you are both "jointly and severally" liable for the entire tax bill, plus any interest and penalties. This means the IRS can legally collect the full amount from either of you, regardless of who earned the income or made the mistake.

And yes, even after you’re divorced, you are still responsible for those joint returns.

Your divorce decree means nothing to the IRS. They don’t care what it says about your ex being responsible. They will collect from whoever is easiest to find.

When Your Ex Vanishes

The situation becomes a true nightmare when your ex is nowhere to be found. In these cases, the IRS can and will take collection action against you for a debt your ex created. This can include:

• Filing tax liens against your property.

• Issuing levies against your bank accounts.

• Seizing your future tax refunds.

Want the three IRS relief options? Keep reading →

Retirement Planning Made Easy

Building a retirement plan can be tricky— with so many considerations it’s hard to know where to start. That’s why we’ve put together The 15-Minute Retirement Plan to help investors with $1 million+ create a path forward and navigate important financial decisions in retirement.

Get your free guide today.

Wild Tax Tales

📉 Martha Stewart’s Market Mistake

Martha Stewart built an empire on good taste, flawless hosting, and immaculate centerpieces. So when she ended up in federal prison, the public assumed it was for insider trading or some complex tax scheme. The truth was simpler. She didn’t go to prison for the stock trade itself. She went for lying about it.

In December 2001, Stewart sold all 3,928 of her shares in ImClone Systems, a biopharmaceutical company known for its cancer treatments. The timing saved her about $45,000 as the stock plunged soon after. Federal investigators believed she sold because her broker allegedly tipped her off that ImClone’s CEO was dumping his own shares. That raised every red flag imaginable. But here’s the key: Martha Stewart was never charged with insider trading.

Instead, she was convicted of conspiracy, obstruction of justice, and making false statements to investigators. Those lies, not the trade, sent her to prison for five months.

So where’s the tax angle? It’s in the scrutiny. The IRS and the U.S. Securities and Exchange Commission both pay close attention to trades that happen right before bad news. Sudden, well-timed sales look suspicious and often trigger audits. That’s why rules like the wash sale rule exist. They’re designed to stop people from manipulating losses while pretending it’s all legitimate trading.

For everyday investors, the lesson is straightforward. Keep clear records. Know how long you’ve held each investment. Avoid triggering wash sales when harvesting losses. And report everything exactly as your broker reports it to the IRS.

Martha’s story proves one thing above all: when the government asks questions, honesty is the cheapest strategy you’ve got.

The quick (and slightly prickly) stories we didn’t have time to get to:

• 🚨 Sacramento woman pleads guilty to fake W-2 tax fraud.

• 🎰 IRS raises casino jackpot reporting to $2,000 in 2026.

• 🌱 Environmental groups sue IRS over renewable tax credit rules.

• 🤖 House Democrats question IRS AI use on taxpayer systems.

If you made it this far, you’re our kind of nerd. Hit reply and tell us which story you want us to dive deeper into next week.

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