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Tax Preparation vs. Tax Planning

Tax Preparation vs. Tax Planning

by | Nov 6, 2020 |

Many people assume tax planning is the same as tax preparation, but the two are quite different. Let's take a closer look: What is Tax Preparation? Tax preparation is the process of preparing and filing a tax return. Generally, it is a one-time event that culminates in signing your return and finding out whether you owe the IRS money or will be receiving a refund. For most people, tax preparation involves one or two trips to your accountant (CPA), generally around tax time (i.e., between January and April), to hand over any financial documents necessary to prepare your return and then to sign your return. They will also make sure any tax reporting on your return complies with federal and state tax law. Alternately, Individual taxpayers might use an enrolled agent, attorney, or a tax...

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Tax Treatment of Virtual Currency Transactions

Tax Treatment of Virtual Currency Transactions

by | Oct 8, 2020 |

Whether you’ve invested in Bitcoin and sold it at a profit or loss or received it for services performed, you’ll need to report it on your tax return. Prior to 2014, there was no IRS guidance and many people did not understand that selling virtual currency was a reportable transaction. They may have found themselves with a hefty tax bill — money they were hard-pressed to come up with at tax time. Others were unaware that they needed to report their transactions at all or failed to do so because it seemed too complicated.

Click the “Read More” button to find out more of what you should know…

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Tax Tips for October 2020

Tax Tips for October 2020

by | Oct 6, 2020 |

Under the Affordable Care Act, certain employers – known as applicable large employers – are subject to the employer shared responsibility provisions. You might be thinking about these topics as you make plans about 2021 health coverage for your employees.

If you are an employer that is subject to the employer shared responsibility provisions, you may choose either to offer affordable minimum essential coverage that provides minimum value to your full-time employees and their dependents or to potentially owe an employer shared responsibility payment to the IRS.

Click the “Read More” button for additional Tax Tips…

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Six Tips for Starting Your Own Business

Six Tips for Starting Your Own Business

by | Oct 5, 2020 |

Starting your own business can be an exciting prospect, but there is more to it than simply writing a business plan. Also, if you expect to have employees, there are a variety of federal and state forms and applications that you need to complete to get your business up and running. That's where a tax professional can help. With this in mind, let's take a look at what you need to know before you start a new business. 1. Business Entity The first decision you need to make is determining which business entity you will use because the type of business structure you choose determines what taxes you need to pay and how to pay them, as well as which income tax return you file. The most common types of business entities are: Sole proprietorship - An unincorporated business owned by an...

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Tax Tips September 2020

Tax Tips September 2020

by | Sep 9, 2020 | ,

Form 1040-X has been one of the last major individual tax forms that still needed to be paper-filed, but now taxpayers can quickly correct previously filed tax returns by submitting Form 1040-X, Amended U.S. Individual Income Tax Return electronically using commercial tax-filing software.

Approximately 3 million Forms 1040-X are filed by taxpayers each year and taxpayers must mail a completed Form 1040-X to the IRS for processing. The new electronic option, however, allows the IRS to receive amended returns faster while minimizing errors normally associated with manually completing the form. The process is also simplified because the tax-filing software allows users to input their data in a question-answer format. The new form also makes it easier for IRS employees to answer taxpayer questions since the data is entered electronically and submitted to the agency almost simultaneously.

Click the “Read More” button for additional Tax Tips…

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Featured Articles September 2020

Featured Articles September 2020

by | Sep 9, 2020 | ,

On August 8, 2020, the President issued a Memorandum allowing employers to defer withholding and payment of an employee’s portion of the Social Security tax (i.e., the 6.2% FICA portion of the federal payroll tax on employees). Medicare taxes, however, are not covered. The payroll tax deferral is effective starting September 1, 2020, and also applies to the employee portion of the Railroad Retirement Act Tier 1 tax. While employers are allowed to defer the withholding and payment of the payroll taxes on employees’ applicable wages, they are not required to do so.

To take a look at how this affects employers and employees, click the “Read More” button below…

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Tax Tips August 2020

Tax Tips August 2020

by | Aug 10, 2020 | ,

Starting in tax year 2020, payers must complete Form 1099-NEC, Nonemployee Compensation to report any payment of $600 or more to a payee. There is a new form that only applies to business taxpayers who pay or receive nonemployee compensation.

Generally, payers must file Form 1099-NEC by January 31. For 2020 tax returns, however, the due date is February 1, 2021. Be advised that there is no automatic 30-day extension to file Form 1099-NEC although an extension to file may be available under certain hardship conditions.

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Featured Articles August 2020

Featured Articles August 2020

by | Aug 4, 2020 | ,

There is a “Dirty Dozen” is a list of common tax scams that target taxpayers. Compiled and issued annually every year by the IRS, this year it includes many aggressive and evolving schemes related to coronavirus tax relief, including Economic Impact Payments. The criminals behind these bogus schemes view everyone as potentially easy prey and everyone should be on guard, especially vulnerable populations such as the elderly.

While tax-related scams usually increase at tax time, this year, scam artists are using pandemic to try stealing money and information from honest taxpayers. As such, taxpayers should refrain from engaging potential scammers online or on the phone.

To read more about these tax scams, and other featured articles for the month click the “Read More” link below…

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