Sources of Personal Income, Tax Year 2019

From the Tax Foundation; Sources of Personal Income, Tax Year 2019 https://bit.ly/3BpoQmjhe

CBO reports on the monthly budget

The Congressional Budget Office (CBO) is reporting that the fiscal year 2022 federal budget deficit will be lower than its $1 trillion projection made a few months ago. For the first nine months of fiscal year 2022, the deficit was $514 billion. The deficit recorded during the same period last year was $2.2 trillion, larger […]

Businesses: Act now to make the most out of bonus depreciation

The Tax Cuts and Jobs Act (TCJA) significantly boosted the potential value of bonus depreciation for taxpayers — but only for a limited duration. The amount of first-year depreciation available as a so-called bonus will begin to drop from 100% after 2022, and businesses should plan accordingly. Bonus depreciation in a nutshell Bonus depreciation has […]

Offer in Compromise

Taxpayers who owe more taxes than they can pay may seek an Offer in Compromise (OIC) from the IRS to settle the debt for less. If the IRS finds that a taxpayer is able to pay in full, the OIC will likely be rejected. In one case, a warehouse worker who was estranged from his […]

The kiddie tax: Does it affect your family?

Many people wonder how they can save taxes by transferring assets into their children’s names. This tax strategy is called income shifting. It seeks to take income out of your higher tax bracket and place it in the lower tax brackets of your children. While some tax savings are available through this approach, the “kiddie […]

IRS audits questioned by House Ways and Means Committee

Does the IRS unfairly target some taxpayers for audits? Some members of the House Ways and Means Committee believe former FBI director, James Comey, and his onetime deputy, Andrew McCabe, were victims of politically motivated tax audits. Both men were chosen for random audits under the National Research Program. The IRS has called the accusations […]

Important considerations when engaging in a like-kind exchange

A business or individual might be able to dispose of appreciated real property without being taxed on the gain by exchanging it rather than selling it. You can defer tax on your gain through a “like-kind” or Section 1031 exchange. A like-kind exchange is a swap of real property held for investment or for productive […]

What are the tax obligations of a “gig worker”?

If you’re a “gig worker” or freelancer, your tax obligations are different from an employee’s. You’re considered self-employed, so clients don’t withhold taxes from your payments. But even if they don’t send you information returns (such as Form 1099-K), you owe tax on that income. Gig workers may have to pay quarterly estimated taxes. Or, […]

Remote auditing: A brave new world

The pandemic has presented numerous challenges for businesses, but it also taught us how to be resilient, cost-conscious and adaptable. Over the last few years, we’ve learned that remote working arrangements offer many benefits, including reducing the time and cost of performing many tasks. Here’s how these lessons translate to the work auditors do to […]

Taxpayer loses deduction because of recordkeeping

To help defray the sky-high cost of gas, taxpayers who use their vehicles for business saw the standard mileage rate rise on July 1, from 58.5 cents to 62.5 cents. But you could lose that tax benefit if you neglect to keep good records as you go. In one case, a consultant and his wife’s […]