Recent Feature Headlines

April 2021

PPP Extended—Act Fast or Miss Out

This is likely it—your last chance to obtain first- and second-draw Paycheck Protection Program (PPP) monies. A new law, the PPP Extension Act of 2021, extends the expiration date to the later of May 31 or when the money runs out. Note the phrase “when the money runs out,” and be forewarned that this can happen within weeks. So, don’t procrastinate—not even for one day.

Can You Claim the ERC for the Owner of a C or S Corporation?

Can your corporation claim the employee retention credit on the W-2 wages it pays to a shareholder-employee who owns more than 50 percent of the corporation? There’s disagreement about this within the tax community. What should you do? Read this article.

Double Benefits: Claiming Both the ERC and Tax-Free PPP

When Congress passed the CARES Act, it gave small-business owners like you two choices: get tax-free Paycheck Protection Program (PPP) monies or take the employee retention credit (ERC). Fast-forward to the new law enacted on December, 27, 2020, and you will find that you can now benefit from both programs, retroactive to March 13, 2020, as you see in this article.

Starting a New Business? Get Up to $100,000 in Tax-Free Money

Congress created the employee retention credit (ERC) to help your business that continued to pay employees even though it was impacted by COVID-19. Fast-forward to the new American Rescue Plan Act of 2021, and now you can potentially take an ERC of up to $100,000 during the last six months of 2021 if you start a new business during the pandemic. In this article, we’ll explain how this valuable provision works and the net amount it can put in your pocket.

Employee Retention Credit: Step-by-Step Example

Congress created the COVID-19 employee retention credit to help employers continue to pay employees while affected by the COVID-19 pandemic. The Consolidated Appropriations Act, 2021, and the American Rescue Plan Act expanded access to this tax credit in both tax years 2020 and 2021. In this article, you see how a small-business owner calculates and claims this most beneficial tax credit.

ARPA Ends Dreaded Cliff for Health Insurance Premium Tax Credit

With the passage of the American Rescue Plan Act of 2021, Congress has temporarily abolished the health insurance premium tax credit “subsidy cliff.” For 2021 and 2022, self-employed and small-business owners and other individuals who must purchase individual health insurance may qualify for premium tax credit health insurance subsidies even if their income far exceeds the old limit of 400 percent of the federal poverty level.

Wow! Married, Filing Separately, May Be the Tax Year 2020 Strategy

In most circumstances, you save federal tax when you’re married by filing a joint return versus two separate returns. But for tax year 2020, due to how Congress wrote some of the temporary COVID-19 tax benefit provisions, you may end up pocketing more money by filing separate returns. We’ll show you why this is the case and how to determine which filing status you should use.

ARPA Adds Cash to the Child Tax Credit (2021 Only)

In the newly enacted American Rescue Plan Act of 2021, lawmakers enhanced the child tax credit with additional monies, some of which are refundable beginning in July 2021. The newly enhanced tax credits are available for the 2021 tax year only.

ARPA Adds Dollars to the Child and Dependent Care Tax Credit

The new American Rescue Plan Act makes major—but temporary, for tax year 2021 only—changes to the federal income tax child and dependent care credit. This is the tax credit you can earn if you spend money taking care of your children and other qualifying dependents.

Tax Bonanza: Expanded Individual Tax Credits in New Law

The American Rescue Plan Act of 2021 provided billions of dollars in new expanded tax credits for individuals like you for tax years 2021 and/or 2022. The three main tax credits Congress increased are the child tax credit, the dependent care credit, and the premium tax credit for health insurance. Learn how you can get thousands more in your pocket for tax year 2021 due to these changes.

ARPA Liberalizes the Earned Income Tax Credit Rules

The newly enacted American Rescue Plan Act of 2021 liberalizes the earned income tax credit, making it more valuable for some of those who claim it. In this article, we walk you through the credit as it currently exists and explain how it’s more available and enhanced for 2021.

March 2021

Breaking News: New PPP for the Self-Employed and Small Businesses

If you have fewer than 20 employees (including none because you are self-employed), the SBA is in the process of trying to help you. Two things are going on. First, you have an exclusive window to obtain your Paycheck Protection Program (PPP) money without competition from the big guys. Second, if you are self-employed, the SBA is creating a mechanism for more PPP money for you.

Deducting Disaster Losses for Individuals

If personal non-business property such as your home, personal belongings, or personal car is damaged or destroyed in a disaster, you may qualify for a tax deduction for casualty losses. But during 2018-2025, you may deduct only personal casualty losses caused by federal disasters. And your deduction is whittled down by insurance recoveries and particular casualty loss limitations.

Update: COVID-19 Tax Relief Measures after the New Law

The CARES Act made many temporary changes in the tax law. The new Consolidated Appropriations Act adjusted some of these and left others to die on December 31, 2020. With all the changes that took place in 2020, you need to know what’s left, enhanced, and over with, as we explain in this article.

Business Tax Breaks Thanks to the Recently Enacted CAA

When you operate a business, you have a variety of tax breaks available. The recently enacted Consolidated Appropriations Act extends and expands some of the breaks. We bring them to your attention as a tax-strategy buffet. You will find tax breaks you can use right away and others that can be used perhaps retroactively.

Deducting Business Casualty Losses: You Don’t Need a Disaster

There’s much to know when it comes to business disaster losses. If business property such as an office building or rental property, a business vehicle, or business furniture or equipment is damaged or destroyed, you may qualify for a casualty loss deduction. And unlike personal casualty loss deductions, you don’t need a federally declared disaster for a business deduction. You may even be able to deduct the casualty loss on the prior year’s tax return and get a quick tax refund. But your deduction is limited to the property’s adjusted basis and is reduced by insurance recoveries

FREE PDF Download: The Practical Guide to S Corporation Taxes

Do you operate your business as an S corporation? It’s a popular choice due to the tax savings you benefit from. But if you don’t avoid the pitfalls, you risk losing those valuable tax benefits. Download this guide to maximize your S corporation tax savings and avoid common missteps.

QBI Update: Impact of Negative QBI and Previously Suspended Losses

As you likely know, the Section 199A 20 percent QBI deduction is a delightful tax benefit. But it is not without its nuances. For example, if you have multiple business and/or rental properties, you need to consider the aggregation issues—both forced by the law and optionally incurred by you.

Boost QBI: Pay Partners and LLC Members Preferred Returns

With all that’s been going on, it’s easy to forget that it’s Section 199A season again. Yes, we’re talking about that lovely 20 percent deduction. Here’s a planning article that can help partners in partnerships and members in LLCs find a larger tax benefit.

Congress Passes Corporate Transparency Act: What It Means for You

Today, you can form an LLC or a corporation in most states without revealing your identity to any government agency. But this pro-secrecy era is coming to an end because Congress passed the Corporate Transparency Act. Starting in 2022, the names and addresses of many LLCs’ and corporations’ beneficial owners will have to be provided to the U.S. Department of the Treasury. The information won’t be made public, but law enforcement will use it. The law impacts both new and existing LLCs and corporations which will have a new federal filing requirement.

February 2021

Who Qualifies for First Draw PPP Money Today?

Two things to know about the Paycheck Protection Program (PPP) first draw: (1) The first draw is for those who missed getting in on the original PPP, which expired on August 8, 2020. (2) Don’t think of a PPP draw as a loan. It’s not a loan. It’s a cash infusion. You have to repay a loan. You don’t have to repay the PPP funds.

COVID-19 Relief Law Turbocharged Employee Retention Credit

As part of the March 2020 CARES Act, Congress created a COVID-19 employee retention credit to provide financial support to businesses to maintain payroll. But this credit was not available if you took a PPP loan. Now, thanks to the new COVID-19 relief law enacted December 27, 2020, a business with a PPP loan can retroactively claim employee retention tax credits.

If the SBA Makes Loan Payments on Your Behalf, Are You Taxed?

The CARES Act, as modified by the new December 27 law, requires the SBA to make anywhere from six to 14 months’ worth of payments for non-disaster loans, including 7(a) loans, 504 loans, and microloans. If the SBA made or is making these payments on your loans, do you have to pay tax on these payments?

COVID-19 Relief Law Boosts Temporary Tax Deductions and Credits

Lawmakers passed significant COVID-19 relief legislation in December 2020. As part of this relief package, there are many tax changes that impact tax years 2020 and 2021. The changes put cash in your pocket. You will want to learn about them so you can use them to your advantage.

Lawmakers Extend the Tax Extenders with the COVID-19 Relief Law

The Taxpayer Certainty and Disaster Tax Relief Act of 2020 deals with the annual tax extenders. Congress made some of them permanent, while others got short- or long-term extensions. We’ll go through each and tell you how it fared in the legislation.

Secrets to IRS Penalty Forgiveness Using Reasonable Cause

The reasonable cause defense offers an opportunity to waive tax penalties, but only if you supply sufficient explanations and documentation. To assert a successful reasonable cause defense, you must demonstrate that you used ordinary business care and prudence regarding your tax obligations and that despite your best efforts, you were unable to comply with the law.

Handling Key Non-Tax Financial Issues When a Loved One Passes Away, Part 3

In this part 3 of this three-part series, learn how to handle key non-tax issues when a loved one passes away. There is much to know and to consider, from a simple matter such as how many “original” death certificates you should obtain to how you deal with the revocable trust that’s now irrevocable because of the death.

SEP IRA vs Solo 401(k): Which Should You Choose?

A small business retirement plan can be a great way to defer income taxes and build net worth. But knowing the right plan for your small business and which plan will allow you to save the most requires some understanding of the tax laws. Choosing the wrong plan can cost you more than just taxes—it can cost you an opportunity to retire early.

FREE PDF Download: Slash Business Taxes with the Help of Relatives

Do you own your own business? Do you have close relatives? If you responded yes to both, you have a golden opportunity to slash your business taxes. With the help of family members, you can utilize several tax-saving strategies to reap some nice financial benefits for both you and your relatives.

January 2021

PPP Alert: New Shot for Your Tax-Free Cash

The new COVID-19 stimulus adds new money to the Paycheck Protection Program (PPP) for those who missed out on the first round. If you missed out, don’t do that again. The PPP money is a tax-free gift with no downside and all upside.

New PPP Forgiveness Rules for Past, Current, and New PPP Money

A new law makes the already terrific Paycheck Protection Program (PPP) better for everyone. It clarifies that the PPP money is tax-free and that expenses paid with the money are deductible. This applies retroactively to the inception of the CARES Act on March 27, 2020, so it benefits past PPP loans, current PPP loans that are outstanding, and new loans.

Round 2: Additional Tax-Free PPP Money for You?

If you have or had a Paycheck Protection Program (PPP) loan, you might qualify for a new, second round of PPP monies. To get a second-draw PPP infusion of money, you have to have 300 or fewer employees; suffered a 25 percent or greater loss in revenue during at least one quarter of 2020 when compared to 2019; and already used or plan to use your original PPP monies.

Home-Office Deduction—Show Me the Proof!

“Show me the proof!” Have you ever wanted proof that you can have an office in your home when you also have an office downtown? This article gives you the law, legislative history, and IRS authorization for the office-in-the-home deduction.

New Laws—COVID-19-Related Government Grants: Taxable or Not?

Billions of dollars in grants have been doled out to individuals and businesses in the wake of the COVID-19 pandemic. COVID-19-related grants to individuals are ordinarily not taxable, but grants to business are taxed unless Congress makes an exception. Congress has made some exceptions for businesses, as you will see in this article.

Download Your New 2021 Desktop Reference Guide Now

Download this two-page guide so that you have a handy desktop reference with the 2021 corporate and individual tax rates, estate tax rates, self-employed tax rates, Social Security and Medicare tax rates, capital gain rates, standard mileage rates, standard deductions, luxury auto depreciation limits, and select retirement and IRA limits.

ABLE Accounts: A Great Deal for the Disabled and Their Families

ABLE accounts allow disabled individuals and their family members to save a substantial amount of money without losing government benefits. The money grows tax-free and can be withdrawn tax-free to use for a wide variety of expenses. But only people who became disabled or blind before age 26 qualify for these tax-advantaged accounts.

Tax Considerations When a Loved One Passes Away (Part 2)

If you become an executor of your loved one’s estate, you may have some important tax decisions to make, as we describe in this article. For example, on the decedent’s final Form 1040, should you elect to deduct medical expenses that are unpaid at the date of death? Should you file Form 706 when not required by law to do so?

New Stimulus Law Grants Eight Tax Breaks for 1040 Filers

The massive new stimulus law contains eight new tax breaks that help the average non-business taxpayer. These include something for everyone, both rich and poor. Wealthy taxpayers can contribute more to charity and still get a deduction; average people get an extension of the universal charitable deduction; and low-income taxpayers can get a larger earned income tax credit. Popular programs such as the lifetime learning credit are expanded to help more people. The bill also extends some favorable tax rules, such as the 7.5 percent adjusted gross income floor for the medical deduction.