Courtesy of the Wall Street Journal, the following is a detailed explanation of the new rules for electric vehicle tax credits that became effective this August when President Biden signed the Inflation Reduction Act into law: What are the credits? The maximum tax credit in the new law is the same as the old law. [...]
If you hire someone for a long-term, full-time project or a series of projects that are likely to last for an extended period, you must pay special attention to the difference between independent contractors and employees. WHY IT MATTERS The Internal Revenue Service and state regulators scrutinize the distinction between employees and independent contractors [...]
Here is a tax-planning opportunity for employers: offer your employees a reimbursement of Covid-related costs. The reimbursement will be fully deductible by you and tax-free to the employee. IRC Section 139 allows employers to reimburse employees for necessary personal, family, living or funeral expenses incurred as a result of a qualified disaster. Why is [...]
Update 8/20/21: In addition to the refund processing delays described below, the IRS is also experiencing delays in processing payments that has led to clients receiving erroneous balance due statements. It seems that IRS is quickly cashing payment checks, but it can take several weeks before IRS credits the payment to the taxpayer's account. [...]
The Consolidated Appropriations Act, 2021, H.R. 133 included funding for the government, extensions for expiring tax extenders, tax relief under the COVID-related Tax Relief Act of 2020, and many more items. Passed by both the House and Senate, it was signed into law by President Trump on December 27, 2020. Here are a few [...]
The U.S. Senate and House of Representatives overwhelmingly passed a $900 billion COVID-19 relief bill Monday night that provides $600 stimulus payments to individuals, adds $300 to extended weekly unemployment benefits, and provides more than $300 billion in aid for small businesses. One of the bill's key provisions is an expansion of the employee retention credit (ERC), [...]
The U.S. Senate and House of Representatives overwhelmingly passed a $900 billion COVID-19 relief bill Monday night that provides $600 stimulus payments to individuals, adds $300 to extended weekly unemployment benefits, and provides more than $300 billion in aid for small businesses. The legislation, the Consolidated Appropriations Act, 2021, also ensures tax deductibility for business expenses paid [...]
U.S. tax law provides a valuable benefit — in the form of a nonrefundable tax credit — for businesses that engage in qualified research and development activities (see a list below). The Sec. 41 credit, which amounts to as much as 20% of the excess of qualified research expenditures for the tax year over [...]
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 [...]
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 [...]
