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Investing in Opportunity Zones: The Facts

Investing in Opportunity Zones: The Facts

by | Nov 19, 2020 |

The Tax Cuts and Jobs Act included numerous changes for businesses and individuals. One of these was the creation of the Opportunity Zones tax incentive, the purpose of which is to spur economic development and job creation in distressed communities by providing tax benefits to investors. Which Communities Qualify as Opportunity Zones? Low-income communities and certain contiguous communities qualify as Opportunity Zones if a state, the District of Columbia, or a U.S. territory nominated them for that designation and the U.S. Treasury certified that nomination. Using this nomination process, 8,764 communities in all 50 states, the District of Columbia, and five U.S. territories were certified as Qualified Opportunity Zones (QOZs). Congress later designated each low-income community in...

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Year-End Tax Planning Strategies for Business Owners

Year-End Tax Planning Strategies for Business Owners

by | Nov 17, 2020 |

Several end-of-year tax planning strategies are available to business owners that can be used to reduce their tax liability. Let's take a look: Deferring Income Businesses using the cash method of accounting can defer income into 2021 by delaying end-of-year invoices so that payment is not received until 2021. Businesses using the accrual method can defer income by postponing the delivery of goods or services until January 2021. Purchase New Business Equipment Bonus Depreciation. Businesses are allowed to immediately deduct 100% of the cost of eligible property placed in service after September 27, 2017, and before January 1, 2023, after which it will be phased downward over a four-year period: 80% in 2023, 60% in 2024, 40% in 2025, and 20% in 2026. Section 179 Expensing. Businesses...

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Individual Taxpayers: Year-End Tax Planning Strategies

by | Nov 10, 2020 |

With the end of the year fast approaching, now is the time to take a closer look at tax planning strategies you can use to minimize your tax burden for 2020. General Tax Planning Strategies General tax planning strategies for individuals include accelerating or deferring income and deductions, as well as careful consideration of timing-related tax planning strategies concerning investments, charitable gifts, and retirement planning. For example, taxpayers might consider using one or more of the following strategies: Investments. Selling any investments on which you have a gain (or loss) this year. For more on this, see Investment Gains and Losses, below. Year-end bonus. If you anticipate an increase in taxable income this year, in 2020, and are expecting a bonus at year-end, try to get...

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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.

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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.

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