Federal Budget Deficit

The Congressional Budget Office has estimated that the federal budget deficit for the first four months of fiscal year 2022 was $259 billion. This number is about one-third of the deficit recorded during the same period in 2021 ($736 billion). Tax revenues totaled $1.5 trillion, an increase of 28% compared to 2021. Individual income and […]

From our friends at the Tax Foundation, take a look at; State Individual Income Tax Rates and Brackets for 2022 https://bit.ly/3BWCL1D

Qualified Opportunity Zone

The qualified opportunity zone (QOZ) program allows investors who recognize capital gains to reinvest those gains in Qualified Opportunity Funds (QOFs) that, in turn, invest in QOZs throughout the United States. The Treasury Inspector General for Tax Administration (TIGTA) has issued a report that, among other things, assesses IRS processes to ensure that taxpayers that […]

Tax News

Spouses who file joint federal tax returns are both generally liable for the tax owed. But joint filers may seek “innocent spouse” relief. One taxpayer requested relief for multiple years of underpaid taxes. A U.S. Court of Appeals found that the U.S. Tax Court properly denied her relief claim. She had tacitly consented to filing […]

Married couples filing separate tax returns: Why would they do it?

If you’re married, you may wonder whether you should file joint or separate tax returns. The answer depends on your individual tax situation. In general, it depends on which filing status results in the lowest tax. But keep in mind that, if you and your spouse file a joint return, each of you is “jointly […]

Tax News

Republican Senators seek tax filing season relief. Ranking Republican on the Senate Finance Committee Mike Crapo (R-ID) and 29 GOP colleagues asked the Treasury Dept. and IRS in a letter for “targeted temporary relief” for taxpayers. “While recognizing the challenges the IRS currently operates under, we find the current situation at the IRS alarming,” the […]

2022 – 02/15

The IRS recently announced the release of its 2022 Household Employer’s Tax Guide, highlighting several changes. You need to withhold and pay Social Security and Medicare taxes if cash wages of $2,400 or more are paid in 2022 to any one household worker (up from $2,300 in 2021). You don’t count wages paid to a […]

Making withdrawals from your closely held corporation that aren’t taxed as dividends

Do you want to withdraw cash from your closely held corporation at a minimum tax cost? The simplest way is to distribute cash as a dividend. However, a dividend distribution isn’t tax-efficient since it’s taxable to you to the extent of your corporation’s “earnings and profits.” It’s also not deductible by the corporation. Five alternatives […]

Contributing the annual maximum amount to your retirement plan is generally a good thing. Exceeding the max? Not so good. If you deferred more than $19,500 (plus $6,500 for individuals 50 and older) of your salary in 2021 to various employer plans, the IRS warns that you must withdraw the excess amount, plus earnings, by […]

Might the now-expired Employee Retention Credit (ERC) receive a new lifeline? Two members of the Senate Finance Committee have introduced bipartisan legislation to help cover costs for small employers that experienced revenue drops and kept workers on their payrolls in the fourth quarter of 2021. The proposed Employee Tax Credit Reimbursement Act would extend the […]