2020 introduced a number of unprecedented situations that have required some massive adjustments. And now, with the tax filing season upon us, a raft of brand new challenges await ahead of the April 15 deadline. Chief among them: uncertainty around the economic stimulus given to American taxpayers as part of the Coronavirus Aid, Relief and Economic Security, or CARES Act. … Read More
How to Make Money by Paying Your Kids
As you help clients fill out their 1040 form, you’re always looking for additional write-offs they can take advantage of. Don’t forget parents who employ their children are allowed to deduct these wages. Three previous columns discussed a frequently-overlooked tax break for freelancers and other self-employed persons. The tax code allows parents to deduct wages they pay their sons and … Read More
IRS blesses tax breaks on forgiven PPP loans after law change
The Internal Revenue Service will allow businesses that got their Paycheck Protection Program loans forgiven to write off expenses paid for with that money, shifting policy after Congress passed new legislation last month. IRS guidance issued on Wednesday overrides previous rules that recipients of PPP loans that had been forgiven couldn’t claim deductions for the wages, rent, utilities, and other … Read More
New IRS Stimulus Tax Breaks and Economic Relief
The new economic relief law passed by Congress at the end of 2020 provides a bevy of tax breaks for individuals and businesses. This includes several extensions and modifications of provisions in the Coronavirus Aid, Relief and Economic Security Act (CARES) Act. The changes in the economic relief law are many, so the following is just a brief overview of … Read More
Financial Planning Lessons Learned in 2020
Looking back over a tumultuous year, we learned the value of cool heads and steady hands. After dealing with the ups and downs of the pandemic, the economy, the election, and political and civil unrest, we’ve learned some broader lessons that can be implemented in our financial planning for 2021. Here are the four biggest lessons we’re encouraging you to … Read More
Tax Savings Tips
With COVID incomes down in 2020, there may be an opportunity for good tax planning to help. For example, if you hold an asset for one year and one day it is taxed at 15 percent or 20 percent, depending on adjusted gross income (AGI). Any asset that you sell that has been held less than a year and a … Read More
Planning for Year-End
Review the CARES act changes for 2020 In March 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law and included relief provisions focused on IRAs and qualified retirement plans. These changes impact the processing and tax reporting of certain transactions in these accounts. Consider making a 2020 IRA contribution, and create or refresh your … Read More
Gifting and taxes: The sooner the better
While festivities may be somewhat dampened this year due to the coronavirus, the holiday season seems to foster a spirit of giving. This year might be a good time to indulge the spirit, according to wealth planners. Right now is a very good time to gift. It’s a good idea to get any appreciation out of their potential estate and … Read More
The Importance of Cybersecurity
Ransomware attacks pose as a threat for any business owner, CPA, or EA. If you suffered a data breach from a ransomware cyberattack you will most likely be forced to pay exorbitant fees as the attackers exchange money for you and your client’s personal information. Since 2016 approximately 4,000 of these types of ransomware attacks have been happening every day … Read More
The New Form 1099-NEC
In case you have not heard: The IRS has revived Form 1099-NEC, which was last used in 1982. This form will be used in 2021 to report 2020 non-employee compensation. Corresponding changes were made to the 1099-MISC form. In recent years, non-employee compensation was reported in Box 7 of the 1099-MISC form, that box now goes away. Instead, the 1099-NEC … Read More