The IRS Releases this Year’s Dirty Dozen Tax Scams
Each year, the IRS compiles a list of 12 common tax scams that taxpayers may encounter during the year. This year, the “dirty dozen” list focuses on scams that target individual taxpayers, with special emphasis on aggressive and evolving schemes related to COVID-19 tax relief. Included on the list are scams related to Economic Impact Payments…
Back to the Future: Prior-Law Kiddie Tax Rates Retroactively Reinstated
Do your children or grandchildren receive unearned income from investments? Federal tax law contains provisions that are designed to prevent high-net-worth individuals from shifting investment income to children and young adults in lower tax brackets to minimize the family’s overall tax bill. These so-called “kiddie tax” rules have gone through several changes in recent years. Here’s…
How to Avoid Penalties on Early Retirement Account Withdrawals
Economic fallout from the COVID-19 crisis may cause some cash-strapped individuals to default on loans they’ve taken out from company qualified retirement plans, including 401(k) and profit-sharing plans. Defaulting on a plan loan will cause adverse tax and retirement-saving consequences. Here are the details. Retirement Plan Loan Basics A participant in an employer-sponsored qualified retirement plan…
Midyear Tax Planning Ideas for Individuals
The extended July 15 deadline for filing your 2019 federal income tax return is behind us. Now it’s time to think about your current federal tax situation. Tax planning is especially complicated for 2020. There are a lot of moving pieces: The COVID-19 pandemic has caused some people to lose their jobs or take pay cuts. Many investors…
Business Vehicle Purchases: What Is Deductible for 2020?
Purchases of new and used business vehicles may qualify for tax breaks under current tax law. If you need a new vehicle to use for business purposes, review these details before you go shopping. Some vehicles may qualify for bigger deductions than others. First-Year Depreciation Breaks The Tax Cuts and Jobs Act (TCJA) allows unlimited…
5 Mid-Year Tax Planning Ideas for Small Business Owners
The second half of 2020 has begun. What steps can small business owners take today to lower taxes for the current tax year? Alternatively, would it make more sense to maximize taxable income this year if you expect higher income and/or unfavorable changes to the tax law starting in 2021? Uncertain Times These are tough…
Hobby or Business? How to Treat COVID-19 Sideline Activities for Taxes
Today, many people sell homemade products online or work on some unincorporated sideline venture outside of their regular day jobs. Such activities can generate extra spending money. This can be especially helpful for retired people and stay-at-home parents — or for those who been laid off or taken a pay cut, during the COVID-19 crisis. For…
FASB Offers Reprieve from Updated Lease and Revenue Recognition Rules
If you’re feeling burned out from coping with extreme circumstances brought on by the COVID-19 pandemic, you’re not alone. Fortunately, the Financial Accounting Standards Board (FASB) and Congress are offering some compliance-related relief for certain entities. Deferral of Revenue Recognition Rules Let’s start with Accounting Standards Update (ASU) No. 2020-05, Revenue from Contracts with Customers (Topic 606)…
Third-Party Risk in a Post-Pandemic World
By Melissa Musser, CPA, CITP, CISA, Principal, Risk & Advisory Services While the COVID-19 pandemic has resulted in unprecedented job loss and economic uncertainty around the world, third-party risk is becoming another important headline for businesses and nonprofits. The economic crisis resulting from the pandemic has exposed a number of issues for historically stable and…
COVID-19 Crisis May Affect Tax Angles for Rental Property Losses
Economic fallout from the COVID-19 crisis will cause many rental real estate properties to run up tax losses in 2020 — and possibly beyond. Here’s a summary of important federal income tax rules for such losses. What You Can Write Off Rental property owners can deduct mortgage interest and real estate taxes. They can also write…