2020 Tax Insights
Employer Retention Credit-Check It Out
The Employee Retention Credit is a refundable tax credit against certain employment taxes equal to 50 percent of the qualified wages an eligible employer pays to employees after March 12, 2020, and before January 1, 2021. Eligible employers can get immediate access to the ... (continued)
2020 Medical Expenses for Your Business
All small-business owners with one to 49 employees should have a medical plan in their business. Sure, the tax law does not require you to have a plan, but you should. Most of the tax rules that apply to medical plans are straightforward when you have ... (continued)
Working From Home Under COVID-19-Read This!!
Whether you claim a business office in the home or are simply working at home, say because of COVID-19, you likely have some former personal assets that you now use for business Ah, new tax deductions! Yep. Say you don’t claim a home-office deduction but ... (continued)
Home Office Tax Deduction for Your S Corporation
You likely know that the home-office tax deduction provides tax savings to business owners. It turns otherwise nondeductible personal expenses into valuable business deductions. When you operate your business as a proprietorship, you simply deduct home-office expenses on Schedule C. But when you operate ... (continued)
Tax Smart College Savings Plans
College is expensive. Data for the 2019–2020 academic year indicates that the average cost of tuition, fees, room, and board was $30,500. Tax law has provisions to help you cover the costs, including Coverdell, Section 529 savings, and Section 529 tuition plans. Contribute to ... (continued)
4 Ways to Employ Your Spouse
If you own your own business and operate as a proprietorship or partnership (wherein your spouse is not a partner), one of the smartest tax moves you can make is hiring your spouse to work as your employee. But the tax savings may be ... (continued)
COVID 19-IRS New Temporary Relief on Back Taxes Owed
Are you one of the over 11 million Americans who owe the IRS back taxes? The IRS temporarily suspended most collection efforts during the first wave of the coronavirus pandemic through its “People First Initiative.” This initiative expired July 15, 2020. The IRS is ... (continued)
4 Things to Know When Hiring Your Spouse
If you own your own business and operate as a proprietorship or partnership (wherein your spouse is not a partner), one of the smartest tax moves you can make is hiring your spouse to work as your employee. But the tax savings may be ... (continued)
Year-End Medical Tax Strategies
All small-business owners with one to 49 employees should have a medical plan in their business. Sure, the tax law does not require you to have a plan, but you should. Most of the tax rules that apply to medical plans are straightforward when you ... (continued)
QSEHRA–Qualified Small Employer Health Reimbursement Arrangement-Revisited
Finally, the health insurance rules that apply to small businesses make more sense and allow some benefits. Beginning January 1, 2017, you can install a new qualified small employer health reimbursement arrangement (QSEHRA) and start helping your employees pay for their health insurance and ... (continued)
Year End Vehicle Purchase Strategies
Here’s an easy question: Do you need more 2020 tax deductions? If yes, continue on. Next easy question: Do you need a replacement business vehicle? If yes, you can simultaneously solve or mitigate both the first problem (needing more deductions) and the second problem (needing ... (continued)
Year End Vehicle Tax Strategies
Here’s an easy question: Do you need more 2020 tax deductions? If yes, continue on. Next easy question: Do you need a replacement business vehicle? If yes, you can simultaneously solve or mitigate both the first problem (needing more deductions) and the second problem (needing ... (continued)
7 Year End Business Tax Strategies
The purpose of this Blog is to get the IRS to owe you money. Here are seven powerful business tax deduction strategies that you can easily understand and implement before the end of 2020. Prepay Expenses Using the IRS Safe Harbor You just have to ... (continued)
Vehicle Titled In Your Name-Here’s How to Deduct Costs!
Do you operate your business as an S or a C corporation? Do you drive a vehicle titled in your personal name for corporate business? Beware. The Tax Cuts and Jobs Act (TCJA) changed the rules for tax years 2018-2025. Before the TCJA, you had to ... (continued)
S Corporation Salary Guidelines-Must Read!
You likely formed an S corporation to save on self-employment taxes. If so, is your S corporation salary nonexistent? too low? too high? just right? Getting the S corporation salary right is important. First, if it’s too low and you get caught by the IRS, you will pay not ... (continued)
New Payroll Tax Deferral-Should You Participate?
If you have employees, you must withhold their 6.2 percent share of the Social Security tax from their wages up to an annual wage ceiling ($137,700 for 2020). You must pay the money to the IRS along with your matching 6.2 percent employer ... (continued)
The Unpardonable SIN in an IRS Audit
What is the unpardonable sin in an IRS audit? Suppose you just received that lovely letter from the IRS telling you that you are the subject of an IRS audit. What one record receives special attention? What one record can create a nightmare for you? ... (continued)
PPP- 2 New Rules for S and C Corporations
The Payroll Protection Program (PPP) rules—they keep a-changin’. During the past month, the Small Business Administration (SBA) issued a new set of frequently asked questions (FAQs) and a new interim final rule, which in combination create the following good news for the Payroll Protection ... (continued)
Tax Considerations if You are Moving
If you’re considering moving to a different state, taxes in the new state may be the deciding factor—especially if you expect them to be lower Consider All Applicable State and Local Taxes If your objective is to move to a lower-tax state, it may seem ... (continued)
7 Significant Considerations for EIDL Loan
Small Business Administration (SBA) Economic Injury Disaster Loans (EIDLs) can be a great source of low-interest funding for businesses struggling with the economic impact of the COVID-19 pandemic. Unlike Payroll Protection Program (PPP) loans, EIDLs are not forgivable—borrowers have to pay them back. But ... (continued)
PPP- 4 Questions Resolved For S Corporations
Tax law definitions do not apply to much of the Payroll Protection Program (PPP), making it new ground for owners of S corporations. Here are answers to four questions of concern to many S corporation owners. Spouse Owns S Corporation Question. My wife owns ... (continued)
PPP Questions For Sole Proprietors Resolved Here!
If you report your business income and expenses on Schedule C of your Form 1040, your PPP loan forgiveness is straightforward, as you see in the four answers below. Paying Myself Question. I know that I can achieve full forgiveness based solely on my ... (continued)
Legitimate Tax Tip Adding a Potential $14K Deduction!!
This little tax tip I’m about to share will let you write off an extra $14,000/year for your business while putting the money in your pocket tax free. At this time of year, you are probably thinking it’s time to hold your annual board of ... (continued)
4 Insights into the PPP Loan & Its Forgiveness
I receive many questions about the Payroll Protection Program (PPP). Here are two of them with our answers. Good Faith at the Time Question. What are your thoughts on the repercussions for business owners who acted in good faith based on the information available ... (continued)
Legal Liability Company–LLC- What You Need to Know!
Limited liability companies (LLCs) are a popular choice of entity for small businesses and investment activities LLC owners are called members. Single-member LLCs have one owner, although spouses who jointly own an LLC in a community property state can elect treatment as a single member ... (continued)
4 Insights into the PPP & Forgiveness
I receive many questions about the Payroll Protection Program (PPP). Here are two of them with our answers. Good Faith at the Time Question. What are your thoughts on the repercussions for business owners who acted in good faith based on the information available ... (continued)
Working At Home–Don’t Miss These Deductions
Whether you claim a business office in the home or are simply working at home, say because of COVID-19, you likely have some former personal assets that you now use for business. Ah, new tax deductions! Yep. Say you don’t claim a home-office deduction but ... (continued)
Raise Hell- Make the PPP Expenses Deductible
As you read this, it’s likely that your lawmakers are working on the next Payroll Protection Program (PPP) package. And hopefully, in this next package they will include a provision that allows you to deduct business expenses that you pay with your PPP money. Let’s ... (continued)
Sole Proprietorship PPP -How to Pay Yourself
If you report your business income and expenses on Schedule C of your Form 1040, your PPP loan forgiveness is straightforward, as you see in the four answers below. Paying Myself Question. I know that I can achieve full forgiveness based solely on my ... (continued)
COVID-19 Yes!!—Added Tax Benefits for You and Your Children
The COVID-19 pandemic may create tax benefit opportunities for you and your family members. For example, you could hire your under-age-18 children, pay them, say, $10,000 each, and they could pay zero federal income taxes. And you or your corporation, the employer, would deduct ... (continued)
Act Now on New RMD Requirements
With the CARES Act, Congress decided to waive all 2020 required minimum distributions (RMDs). What if you already took out your annual RMD before Congress changed the law? The IRS just granted you brand-new mercy to fix the issue, but you need to take action ... (continued)
Here’s How to Take 100K From Retirement Accounts Without Penalties
New IRS guidance expands the possibilities for what is an adverse COVID-19 impact on you for purposes of taking up to $100,000 out of your retirement accounts and repaying it without penalties. First, let’s look at the rules as they existed before this new ... (continued)
PPP Loan Forgiveness Rules for Corporations & Partnerships
If you operate your business as a partnership or an S or C corporation, you face entity-specific Payroll Protection Program (PPP) loan forgiveness rules that apply to you as an owner-worker in the business. The rules that apply to you do not apply to ... (continued)
Government Clarifies PPP Loan Forgiveness Rules
How much is clarity worth? A lot, a whole lot. And how much is making things easier worth? Of course, it’s a lot, a whole lot, too. We now have both the new (a) clarity and (b) easy road to Paycheck Protection Program (PPP) loan forgiveness ... (continued)
COVID-19 Tax Relief for Non-Residents And US Residents Working Abroad
If the federal tax you pay is dependent on where you are physically located, then COVID-19 likely has thrown a wrench in your physical tax location (and tax situation). If you were living abroad and had to return to the U.S. because of COVID-19, ... (continued)
2 New Retirement Strategies Due to COVID-19
Due to the COVID-19 pandemic, Congress made changes to the tax law related to retirement account distributions. The changes open up new, time-limited ways for you to save tax dollars. Congress waived all 2020 RMDs. But if you took your RMD before Congress made ... (continued)
9 Insights Into PPP Potential Tax Implications
Uncategorized by MF ... (continued)
Let’s Visit Partnership Special Allocations for Your Business
One of the advantages to operating your business as a partnership is the special allocations of tax items among the partners. You have the same opportunity if you run your business as an LLC that’s treated as a partnership for federal tax purposes. What ... (continued)
COVID-19– 2 New Retirement Strategies To Consider
Due to the COVID-19 pandemic, Congress made changes to the tax law related to retirement account distributions. The changes open up new, time-limited ways for you to save tax dollars. Congress waived all 2020 RMDs. But if you took your RMD before Congress made ... (continued)
More Details on the PPP Program
When you are self-employed with no employees, the payroll protection program (PPP) program is a COVID-19 gift designed to help you get through this pandemic. If you now have your PPP funds, we identified nine insights for you. Do I Have to Spend the ... (continued)
COVID-19 Self-Employed Tax Relief
If you are in business for yourself—say, as a corporation or self-employed—payroll taxes and self-employment taxes are likely two of your biggest tax burdens. Here’s some possible good news: Congress decided to give you significant relief from these taxes due to the COVID-19 pandemic. ... (continued)
CARES Act Correction to QIP Property
Congress made an error in the Tax Cuts and Jobs Act (TCJA) that limited your ability to fully expense your qualified improvement property (QIP). The CARES Act fixed the issue retroactively to tax year 2018. If you have such property in your prior filed 2018 ... (continued)
COVID-19– S Corporation Benefits
To help your small business, Congress created a lot of new tax-saving provisions due to the COVID-19 pandemic. Many of my clients own and operate S corporations and expect the tax law to treat them differently, as it does with their health insurance deduction. Perhaps ... (continued)
Self Employed & Filed 1040 Schedule C-Please Read About These Gov’t Potential Benefits
Get ready for this: “I’m from the government, and I’m here to help.” Here’s the deal: “I’m going to give you $20,833 today. I want you to give me $5,448 no later than two years from now. You can keep the $15,385 difference, tax-free—no ... (continued)
Roth IRA Conversion-Now’s a Once-In-A-Life Opportunity
For years, financial and tax advisors have lectured about the wonderfulness of Roth IRAs and why you should convert traditional IRAs into Roth accounts. But, of course, you didn’t get around to it. In hindsight, maybe that was a good thing. For many, the financial ... (continued)
Payroll Tax Relief Under New Tax Laws—-Must Read
If you are in business for yourself—say, as a corporation or self-employed—payroll taxes and self-employment taxes are likely two of your biggest tax burdens. Here’s some possible good news: Congress decided to give you significant relief from these taxes due to the COVID-19 pandemic. ... (continued)
New Update COVID-19
The COVID-19 pandemic has upended all aspects of life around the world, including the world of business here in the U.S. If your business is struggling, you may be able to get some help from the federal Small Business Administration (SBA), which is authorized ... (continued)
COVID-19-New Tax-Free Provisions for Employees
After the terrorist attacks on September 11, 2001, Congress added a little-known tax provision to the tax law This little-known tax code provision exempts certain payments from taxation during a disaster or terrorist attack. President Donald Trump’s national emergency declaration triggered the disaster provisions of ... (continued)
Here are SBA Disaster Relief Loans Available for Your Business
The COVID-19 pandemic has upended all aspects of life around the world, including the world of business here in the U.S. If your business is struggling, you may be able to get some help from the federal Small Business Administration (SBA), which is authorized ... (continued)
COVID-19-Distributions From IRA’s-Good News!!
In this letter, we explain how you may be able to take money from your IRA and other retirement accounts, avoid early withdrawal penalties, and have generous options on repayment (or not). We also explain when you don’t have to take the required minimum ... (continued)
Yes–How to Deduct Medicare Through Your Business!
Premiums for Medicare health insurance can add up to a substantial sum. That’s especially true if you have high income, and you’re married and both you and your spouse are paying premiums. Fortunately, the premiums can potentially help your tax situation. The dollar benefit of Medicare ... (continued)
Yes–You Must Elect OUT of Bonus Depreciation
As you likely know, the Tax Cuts and Jobs Act increased bonus depreciation to 100 percent. Unlike most tax provisions that involve a tax election, this one requires you to elect out if you don’t want it. For example, you (or your corporation) buy two ... (continued)
Possible Way to Beat the $10,000 Limit on Personal Tax Deduction
C corporations cause double taxation for business owners, so you probably think you want to avoid them at all costs. And for many of you, this is true, as the S corporation often provides the lower overall tax outcome. But for some of you, the ... (continued)
Some Ideas to Reduce Gift Tax
If you or a well-off relative are facing the gift and estate tax, here’s a planning opportunity often overlooked: pay tuition and medical expenses for loved ones. Such payments, structured correctly, do not represent gifts. The monies spent by you on the qualified medical and ... (continued)
8 Reminders About the SECURE Act
The Setting Every Community Up for Retirement Enhancement (SECURE) Act changed the landscape for retirement and savings planning. Here are eight important reminders about this new law: You can’t use contributions made in 2020 but applied to 2019 for any SECURE Act provisions that apply ... (continued)
Charitable Contributions -Try to Use Your Business
Giving to your church, school, or other 501(c)(3) charity is a noble act no matter how you choose to give. But for the purposes of tax savings, some forms of giving are much more beneficial to you than others. As a business owner, you ... (continued)
Incentive Stock Options (ISOs) -Tax Implications
With incentive stock options (ISOs), you could be on your way to a very nice payout But you must consider both the regular federal income tax results and the alternative minimum tax (AMT) results. In addition, you must pay attention to special rules that apply ... (continued)
Education Tax Credits-What You Need to Know!
The American Opportunity Tax Credit (AOTC) and the more familiar Lifetime Learning Credit (LLC) can make higher education costs more affordable. The AOTC equals 100% of the 1st $2000 of a student’s qualified education expenses plus 25% of the next $2000; maximum annual credit ... (continued)
Accountable Plans for Reimbursing Employees-Update!
Failure to use an accountable plan for your employee expense reimbursements (including yourself if you operate as a corporation) turns those improperly reimbursed expenses into taxable wages. In other words, by failing to comply with the accountable plan rules, you turn the tax-free reimbursement ... (continued)
Simple IRA-Facts
Talk to a business owner who has been in business for a while and he or she will tell you to make sure that you put a retirement plan in place. When you are starting out and have modest income, the Savings Incentive Match Plan for Employees ... (continued)
529 Plan Facts
529 Plans — Income Tax Breaks–although contributions are NOT deductible, earnings in the 529 plan grow federal tax-free and are not taxed when the funds are distributed for college education. In addition, as of January 1, 2018, tax-free withdrawals may include up to ... (continued)
New Kiddie Tax Provisions
In December 2017, Congress enacted the Tax Cuts and Jobs Act (TCJA) and changed how your children calculate their tax on their investment-type income. The TCJA changes led to much higher tax bills for many children. On December 19, 2019, Congress passed a bill that the president signed ... (continued)
LLC or Corporation?
Changes included in the Tax Cuts and Jobs Act (TCJA) force you and other small-business owners to reconsider whether a new venture should be conducted as a pass-through entity or as a C corporation. Pass-through entities include partnerships and multi-member LLCs that are treated as partnerships for tax purposes. ... (continued)
Home Office deduction for Rental Properties? Yes!
With the start of a new tax year, you’re probably looking for new tax savings opportunities. As you probably know, establishing a home office for your Schedule C or corporate business creates valuable tax deductions. But it’s not available only for your proprietorship, partnership, or corporate business. If ... (continued)
Just Passed New Tax Law Changes
As has become usual practice, Congress passed some meaningful tax legislation as it recessed for the holidays. In one of the new meaningful laws, passed on December 19, you will find the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act). The SECURE Act made ... (continued)
Solo 401(k) Best Retirement Solution ?
Have you procrastinated about setting up a tax-advantaged retirement plan for your small business? If the answer is yes, you are not alone. Still, this is not a good situation. You are paying income taxes that could easily be avoided. So consider setting up a plan to position ... (continued)