$80 Billion to the IRS: What It Means for You
For the business owner and tax practitioner, the most important part of the Inflation Reduction Act of 2022 was not the tax credit for flashy new electric cars. It was something much more basic: a long-term budget commitment to help the struggling, failing IRS. The Inflation Reduction Act invests an additional $80 billion in the […]
Update 105-HRAs, MSAs, and FSAs to Allow Over-the- Counter Drugs
Here’s good news. The CARES Act reinstated the ability of health reimbursement arrangements (HRAs) to reimburse and deduct the cost of over-the-counter drugs and added a new deduction for menstrual care products. The changes apply retroactively (yes, retroactively) to amounts paid after December 31, 2019. Business Wins As you likely know, individual taxpayers who itemize […]
Answers to 12 Employee Retention Credit (ERC) Questions
October, 2022 As you likely know, it’s not too late to file for the ERC. And now is a good time to get this done. You can qualify for 2020 credits of up to $5,000 per employee and 2021 credits of up to $7,000 per employee for each of the first three quarters. That’s a […]
More on Earning 9.62 Percent Tax-Deferred
You may remember from last month’s article that you can buy from now through October 31, 2022, Series I bonds from the U.S Treasury that pay 9.62 percent tax-deferred interest. If you buy now, you earn that 9.62 percent for six months, guaranteed. At the end of six months, the Treasury Department adds the interest […]
Act Now: Claim Your 2020 and 2021 Employee Retention Credit (ERC)
During much of 2020 and 2021, you may have qualified for the Employee Retention Credit (ERC). With the ERC, you found (or could find) tax credits of up to $26,000 per employee. That’s a lot. With 10 employees, that’s $260,000. Key point. If you have not claimed the ERC, you can amend your 2020 and […]
Self-Employment: Quick and Dirty Guide to Tax Issues and Savings
Are you considering joining the Great Resignation and becoming self-employed to be in charge of yourself? Yes? Okay, but before leaping, consider the tax implications. This self-employment thing may not be as rosy as it appears. Here’s the big picture. Don’t Believe the Hype Despite what some may believe, becoming self-employed won’t allow you to […]
When Your Income Is Subject to Self-Employment Taxes
Self-employment taxes are to individual business owners what payroll taxesare to employers and employees. They fund Social Security and Medicare. All individuals with self-employment income must pay self-employmenttaxes, regardless of their age. When business owners reach retirement age,they’ll be able to collect Social Security and Medicare A (hospital insurance)benefits if they paid self-employment taxes for […]
Home-Office Deduction If You Operate as a Corporation
Question What does the IRS audit manual say about the home office for an individual who operates his or her business as a corporation? Answer You will be interested in two boilerplate explanations from the Internal Revenue Manual that examiners use to explain why the IRS is denying the home-office deduction:1 We [the IRS] have […]
Health Savings Accounts: The Ultimate Retirement Account
Looking to save for retirement? The first account you should open and fund is not an IRA (regular or Roth) or 401(k). If you qualify, your first retirement account should be a Health Savings Account (HSA). Don’t let the name fool you.The HSA may be the ultimate retirement account. Not looking to save for retirement? […]
New Hope for Restoring and Fixing the Employee Retention Credit
As you may remember, two bad things happened to the Employee Retention Credit (ERC): On November 15, 2021, Congress retroactively repealed the ERC for the fourth quarter of 2021(except for start-up businesses). On August 4, 2021, the IRS issued the clearly irrational Notice 2021-49 stating that a corporateowner with certain living relatives does not qualify […]