Posts by Caras & Shulman

Dirty Dozen Tax Scams for 2022

Dirty Dozen Tax Scams for 2022

by | Jul 6, 2022 |

The "Dirty Dozen" is a list of common tax scams that target taxpayers. Compiled and issued annually by the IRS, it includes a number of aggressive and evolving schemes that taxpayers should avoid. Let's take a look at this year's "Dirty Dozen" tax scams: 1. Use of Charitable Remainder Annuity Trust (CRAT) to Eliminate Taxable Gain In this transaction, appreciated property is transferred to a CRAT. Taxpayers improperly claim the transfer of the appreciated assets to the CRAT in and of itself...

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Tax Withholding for Seasonal and Part-Time Employees

Tax Withholding for Seasonal and Part-Time Employees

by | Jun 27, 2022 |

Many businesses hire part-time or full-time workers, especially in the summer. The IRS classifies these employees as seasonal workers, defined as an employee who performs labor or services on a seasonal basis (i.e., six months or less). Examples of this seasonal work include retail workers employed exclusively during the holidays, sports events, or during the harvest or commercial fishing season. Part-time and seasonal employees are subject to the same tax withholding rules that apply to other...

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Tax Tips for Students with a Summer Job

Tax Tips for Students with a Summer Job

by | Jun 20, 2022 |

With teen employment expected to be plentiful this summer, with better pay and more opportunities, chances are good that your high school or college student will have a job this summer. Here's what they should know about summer jobs and taxes: Form W-4 When anyone gets a new job, they need to fill out a Form W-4, Employee's Withholding Allowance Certificate. Employers use this form to calculate how much federal income tax to withhold from the new employee's pay. The Withholding Calculator on...

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Settling Tax Debt With an IRS Offer in Compromise

Settling Tax Debt With an IRS Offer in Compromise

by | Jun 13, 2022 |

An offer in compromise (OIC) is an agreement between a taxpayer and the Internal Revenue Service that settles a taxpayer's tax liabilities for less than the full amount owed. That's the good news. The bad news is that not everyone can use this option to settle tax debt; the IRS rejected nearly 60 percent of taxpayer-requested offers in compromise. If you owe money to the IRS and wonder if an IRS offer in compromise is the answer, here's what you need to know. Who is Eligible? If you can't pay...

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Common Small Business Budgeting Errors to Avoid

Common Small Business Budgeting Errors to Avoid

by | Jun 6, 2022 |

When creating a budget, it's essential to estimate your spending as realistically as possible. Here are five budget-related errors commonly made by small businesses and some tips for avoiding them. Not Setting Goals It's almost impossible to set spending priorities without clear goals for the coming year. It's important to identify, in detail, your business and financial goals and what you want or need to achieve in your business. Underestimating Costs Every business has ancillary or...

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What To Know About Tax-Related Identity Theft

What To Know About Tax-Related Identity Theft

by | May 30, 2022 |

Tax-related identity theft occurs when someone uses a taxpayer's stolen SSN to file a tax return claiming a fraudulent refund. In the vast majority of tax-related identity theft cases, the IRS identifies a suspicious tax return and pulls the suspicious return for review. The IRS then sends a letter to the taxpayer and won't process the tax return until the taxpayer responds. Depending on the situation, the taxpayer will receive one of three letters asking them to verify their identity: Letter...

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Special Tax Benefits for Members of the Military

Special Tax Benefits for Members of the Military

by | May 23, 2022 |

Military personnel and their families face unique life challenges with their duties, expenses, and transitions. As such, military members may qualify for tax benefits not available to civilians. For example, they don’t have to pay taxes on some types of income. Special rules may lower the tax they owe or allow them more time to file and pay their federal taxes.

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Choosing the Correct Business Entity

Choosing the Correct Business Entity

by | May 16, 2022 |

One of the most important decisions you'll make when starting a business is choosing the right business entity. It's a decision that impacts many things--from the amount of taxes you pay to how much paperwork you have to deal with and what type of personal liability you face. Forms of Business The most common forms of business are Sole Proprietorships, Partnerships, Limited Liability Companies (LLC), and Corporations. Federal tax law also recognizes another business form called the...

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Estimated Tax Payments: The Facts

Estimated Tax Payments: The Facts

by | May 9, 2022 |

Estimated tax is the method used to pay tax on income that is not subject to withholding, including income from self-employment, interest, dividends, alimony, rent, and gains from the sale of assets, prizes, and awards. You also may have to pay estimated tax if the amount of income tax being withheld from your salary, pension, or other income is not enough. Filing and Paying Estimated Taxes Both individuals and business owners may need to file and pay estimated taxes, which are paid quarterly....

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