General health care is not medical care

Do you have a health flexible spending account, health savings account or similar plan through your employer? The IRS is warning about misinformation that could lead to serious mistakes. Non-medical nutrition, wellness and exercise expenses that aren’t explicitly related to a medical diagnosis or treatment aren’t deductible or reimbursable under these plans. That hasn’t stopped […]

Proposal for new homebuyer credit

One proposal in President Biden’s State of the Union address was to help potential homebuyers and current homeowners. Biden proposed a $10,000 mortgage relief tax credit for first-time homebuyers. It would provide a $5,000 credit for two years. He also proposed a one-year credit of up to $10,000 to middle-class families who sell their starter […]

Tax-wise ways to take cash from your corporation while avoiding dividend treatment

If you want to withdraw cash from your closely held corporation at a low tax cost, the easiest 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,” but it’s not deductible by the corporation. 5 […]

Tax Proposals in the State of the Union address

In the State of the Union address, President Biden announced several tax-related proposals. In a nutshell, he vowed to raise taxes on the wealthiest Americans, increase the corporate minimum tax, cut executive pay tax deductions and curb corporate jet tax breaks. Specifically, Biden renewed his call for a “billionaire” tax. It would impose a 25% […]

TIGTA reports on IRS protection of taxpayer data

Is the IRS properly protecting sensitive taxpayer data? That’s the subject of a recent report by the Treasury Inspector General for Tax Administration (TIGTA), based on a request from Congress. The report looked at a “massive leak” of data in June 2021 that allowed a media outlet to obtain a “vast trove” of more than […]

Cash vs. accrual accounting: What’s the difference?

Financial statements are critical to monitoring your business’s financial health. In addition to helping management make informed business decisions, year-end and interim financial statements may be required by lenders, investors and franchisors. Here’s an overview of two common accounting methods, along with the pros and cons of each method. 1. Cash basis Under the cash-basis […]

What’s my status?

When it comes to tax filing, the correct status to claim isn’t always obvious. Suppose the parents of a young child live together but were never married. Both contribute to the cost of maintaining a household and caring for the child. Are both able to claim the favorable head of household (HOH) status? The answer […]

House advances resolution rejecting SEC Bulletin

The U.S. House Financial Services Committee has advanced a resolution that rejects SEC Staff Accounting Bulletin (SAB) 121, which was issued to help account for crypto assets in SEC custody. The guidance instructs registered entities responsible for safeguarding crypto assets to include a liability and corresponding asset on their balance sheets. But many legislators and […]

Is “tipping culture” out of control?

IRS has issued final regulations for manufacturing investment tax credit

The IRS has issued final regulations for manufacturers eligible to make the elective payment election of the advanced manufacturing investment tax credit. This credit was created in 2022 by the CHIPS Act and is intended to incentivize companies to make semiconductors and semiconductor equipment in the United States. The final regulations describe procedures for making […]