To gift or not to gift? It’s a deceptively complex question. The temporary doubling of the federal gift and estate tax exemption — to an inflation-adjusted $11.7 million in 2021 — is viewed by some people as a “use it or lose it” proposition. In other words, you should make gifts now to take advantage … Read More
One result of the COVID-19 pandemic is the rise of the gig economy, sometimes called the on-demand economy. The IRS reminds taxpayers that all gig income must be reported on their tax returns. Here are some points to remember: Income is generally taxable even if you are paid in cash, and even if you don’t … Read More
The events of the past year have taught business owners many important lessons. One of them is that, when a crisis hits, customers turn on their computers and look to their phones. According to one analysis of U.S. Department of Commerce data, consumers spent $347.26 billion online with U.S. retailers in the first half of 2020 … Read More
Flexible Spending Account (FSA) rules just got more flexible. FSAs allow employees to use tax-free dollars to pay qualified expenses, subject to limits. Due to the pandemic, the Consolidated Appropriations Act (CAA) temporarily loosens some limits for health FSAs and dependent care FSAs. One such change is a longer grace period after the end of … Read More
Your company’s financial statements should be transparent about any restrictions on cash. Are your reporting practices in compliance with the current accounting guidance? The basics Restricted cash is a separate category of “cash and cash equivalents” that isn’t available for general business operations or investments. There are many types of restricted cash. For example, companies … Read More
Do you know lower-income taxpayers who need a tax break? They may be able to claim an Earned Income Tax Credit (EITC). And if their earned income was higher in 2019 than in 2020, they can use the 2019 amount to calculate the EITC on 2020 returns. The result is a bigger credit. The temporary … Read More
Many businesses have experienced severe cash flow problems during the COVID-19 pandemic. As a result, some may have delayed or missed loan payments. Instead of filing for bankruptcy in court, delinquent debtors may reach out to lenders about restructuring their loans. Restructuring vs. Chapter 11 Out-of-court debt restructuring is a process by which a public … Read More
Have you participated in your employer’s qualified transportation fringe benefit plan and have a balance remaining on your transit pass because you no longer use it to commute to work due to the COVID-19 pandemic? Unfortunately, the IRS says you can’t receive a cash refund. In Information Letter 2020-0031, the IRS stated that if an … Read More
A number of tax-related limits that affect businesses are annually indexed for inflation, and many have increased for 2021. Some stayed the same due to low inflation. And the deduction for business meals has doubled for this year after a new law was enacted at the end of 2020. Here’s a rundown of those that … Read More
It’s full speed ahead for the 2020 tax season now that the IRS is accepting returns. Here are some IRS tips to help you avoid common errors that will slow the filing process and delay a refund if you’re due one. Bring all required Social Security (SS) numbers to your tax appointment and check them … Read More