Owners of incorporated businesses know that there’s a tax advantage to taking money out of a C corporation as compensation rather than as dividends. The reason: A corporation can deduct the salaries and bonuses that it pays executives, but not dividend payments. Thus, if funds are paid as dividends, they’re taxed twice, once to the … Read More
Year after year, the tax myths keep coming, causing the IRS to combat misinformation. Many tax myths relate to refunds. The most common myth is that receiving a refund on your 2020 return means you don’t need to adjust your 2021 withholding. That’s not always true. Fortunately, the IRS.gov website provides an easy-to-use estimating tool. … Read More
Are you thinking about setting up a retirement plan for yourself and your employees, but you’re worried about the financial commitment and administrative burdens involved in providing a traditional pension plan? Two options to consider are a “simplified employee pension” (SEP) or a “savings incentive match plan for employees” (SIMPLE). SEPs are intended as an … Read More
In recent months, there have been a number of tax changes that may affect your individual tax bill. Many of these changes were enacted to help mitigate the financial damage caused by COVID-19. Here are two changes that may result in tax savings for you on your 2020 or 2021 tax returns. The 2020 return … Read More
More than $1.3 billion in unclaimed tax refunds from 2017 are waiting at the IRS, but they won’t be available much longer. Taxpayers generally have a three-year window to claim tax refunds, and for 2017 that window slams shut on May 17th. The IRS estimates that 1.3 million taxpayers are owed refunds, but they haven’t … Read More
The housing market in many parts of the country is strong this spring. If you’re buying or selling a home, you should know how to determine your “basis.” How it works You can claim an itemized deduction on your tax return for real estate taxes and home mortgage interest. Most other home ownership costs can’t … Read More
A recent tax law provides a 100% business deduction (up from 50%) for food and beverage expenses in 2021 and 2022 as long as they’re “provided by a restaurant.” The IRS has now defined the term “restaurant” for purposes of the deduction. According to the IRS, the term “restaurant” means a business that prepares and … Read More
Now that the federal gift and estate tax exemption has reached an inflation-adjusted $11.7 million for 2021, fewer estates are subject to the federal tax. And even though President Biden has proposed reducing the exemption to $3.5 million, it’s uncertain whether that proposal will pass Congress. If nothing happens, the exemption is scheduled to revert … Read More
On its website, the IRS states that the extended May 17, 2021, tax filing deadline includes individual taxpayers’ deferred foreign income installment payments (also known as Sec. 965(h) installment payments). Generally, the tax code requires U.S. shareholders to pay a “transition tax” on the untaxed foreign earnings of specified foreign corporations as if those earnings … Read More
The IRS recently suspended a requirement to repay excess advance payments of the 2020 Premium Tax Credit (PTC). The action is a result of the American Rescue Plan Act, which was enacted on March 11. The PTC is a refundable credit that helps eligible individuals and families pay for health care coverage through the Marketplace … Read More